Decontrol of Fruits and Vegetables: Reforms in Marketing or Protracted Corrections in Act

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griculture markets in the state of Maharashtra are in conundrum due to ordinance issued by governor to bring changes in APMC Act. Demand and supply cycle is paralysed due to alternate strikes of commission agents, traders, retailers. Farmers in villages are turbulent and consumers in cities are under inflationary pressure. Government has prepared on war footing to tackle this disaster created by their own decisions by providing police protection to the farmers and their commodities. Media is supporting the move because they envisaged ordinance as a game changing reform. 

State government has obligations to push the amendments in the APMC act to support the reforms launched by their own party at National level. Previous UPA government have tried to push similar reforms through Model APMC act but states failed to follow the same suit. Even in Maharashtra, Congress- NCP led government tried three years back to promulgate decontrol move but pressure of alliance partner blocked process. Nothing has changed today. Traders from Nashik returned their licenses to APMC have halted entire trade. In Pune retailers are on strike, Mumbai is resilient; these are consequences of market forces and political forces. Mumbai market is in the hands of capitalist traders and Nashik is with politician turned farmer traders. Recent move of Nashik is to create pressure on both state and central government by disturbing politically sensitive onion commodity. Mumbai’s solicitous traders abstained from strikes since they have fear that such strikes will have long term percussions on their trade. North and south have started to take benefit of this increased demand and tried to occupy the space. Even farmers and their organisations catch this opportunity to enter into Mumbai.

Government has elicited of their own and unveiled decision to all stakeholders which created disaster. This is contradictory to the principle of democracy. Just a week away from assemble session; government’s ordinance route to bring reforms is under pressure. This is again new experiment by BJP government to bring pre-session ordinance  amid maligned image of government to bring reforms which were tabled in parliament  failed to pass Litmus test and were routed through channel of post-session  ordinances.

Even reverberations of this decontrol inflicted anti-peasantry image of government among farming community. In the monsoon season already supply chain is disturbed. Again rates of onion and other vegetables are fall down due to closed markets. Immediately there is not alternate marketing channel to sale these perishable commodities. Though this ordinance stopped commission fee from the farmers; winners have not rejoiced over it.  Commission fee from farmer or traders is contentious issue. Market forces opined that rather legal compulsions it is decided by the supply chain and value addition of commodity. Also it is trade mechanism. It is not question of direct suffering of someone, it is cost of value chain and transferred and shared among all players involved in the trade operations.

Before this ordinance, direct marketing was practised by the horticultural farmers. Due to their perishable nature, horticulture commodities are not preferred for multiple handling henceforth farmers are selling their orchards directly on their farms. And traders preferred such commodity for distant markets since it has mere post harvest losses. As per previous act, it was illegal activity. But neither APMC nor farmers complained single case. Even APMC has not tried to legalise this trade to strengthen their income by collecting cess on this direct farm level trade. Also board of directors of such APMC was from the farmers, they never insisted for it because they know the fact that farmers are getting more than coming down to APMC.  

In the history, farmers struggled for bringing reforms in the system. They insisted for transparency through weighing mechanism, improvement in open auction, payment mechanism, and good storage facilities. Government supported the farmers demand and brought changes. Now Farmer Common Facility centres and decentralised markets run by the farmers and their institutions is need of the hours. Agriculture marketing scenario is changing rapidly. E- Markets and online shopping are buzzwords. Decontrol decision is not everything. It just created the awareness among the farmers. Now ball of the game is in farmers’ field. It is upto them how to survive in competitive markets.

The slogan of ‘Co-operative federalism’ is the driving force to engender the idea of National Agriculture Market envisioned by Modi Government rather than demands from Farming communities. It is more likely correcting the APMC Act by aligning to present trade practises in the market. Unless and until government succeed in attracting private players in the business of fruit and vegetable by investing in supply chain infrastructure, it will be nebulous reform.

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