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LATEST NEWS UPDATES | Deregulation of Agricultural Marketing: How has it Affected the APMC System in Karnataka? -Ayush Kumar

Deregulation of Agricultural Marketing: How has it Affected the APMC System in Karnataka? -Ayush Kumar

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published Published on Sep 7, 2022   modified Modified on Sep 14, 2022

-Foundation for Agrarian Studies

In December 2020, in line with the Central Farm Laws, the Government of Karnataka passed an amendment to the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966. This amendment reduced the scope of the Agricultural Produce Marketing Committees (APMC) by effectively ending their status as the only place (with some exceptions) where wholesale agricultural trade was permitted by law. Despite the three Central Farm Laws being repealed after the year-long farmers’ struggle, the Government of Karnataka has not yet repealed its amendment to the APMC system.

State Law Minister J. C. Madhuswamy had stated at the time of introducing this amendment that farmers would be free of exploitative intermediaries with these reforms. He claimed that the private companies involved in food processing can go right up to the doorstep of the farmers’ houses and directly purchase the product from them. To quote him, “Farmers are free to sell their produce at APMC yards or private markets. The choice is up to the farmer.” So, has the reform benefited the farmers? While the question is complex, given the heterogeneity of Indian agriculture and the short period since the amendments have been introduced, I attempt to provide some insights from information obtained on market arrivals and prices, and interviews conducted at the Bangalore APMC.

APMC System and the Reforms

One of the key functions performed by the APMC markets is to act as a platform for price discovery. The transactions inside APMC market are a result of interactions between various economic agents. The farmer brings produce to the market, which is then arranged for sale by commission agents, who markets the product as a representative of the farmer. The commodity is then displayed to the traders who determine the prices through a regulated (including auction) mechanism. The whole system is supervised by the elected committees. The revenues earned from these transactions help APMCs in meeting their expenditure and for investment in market infrastructure.

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Foundation for Agrarian Studies, 7 September, 2022, https://fas.org.in/deregulation-of-agricultural-marketing-how-has-it-affected-the-apmc-system-in-karnataka/?fbclid=IwAR2-HzCXK1lE8ihMv5eQao_x3KRrWpp8DCk4mdtdVSCvC2Z_xLWgVkazWFU


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