Objectives and Background

Why was it introduced?

Farmers in India faced various restrictions under the APMC Acts of respective states:

  • Restricted Trade Area: Farmers were forced to sell only in notified APMC market yards.
  • Intermediaries: They could sell only to registered licensees (Commission Agents/Arhatiyas).
  • State Barriers: Restrictions on the free flow of produce between states due to different state laws.

Goal: To create "One India, One Agriculture Market" by removing these barriers.

Key Highlights of the Bill

1. Trade Outside APMC (Trade Area)

Section 3 & 4

The Bill allowed barrier-free inter-state and intra-state trade of farmers' produce outside the physical premises of markets notified under State APMC legislations.

Implication:

  • Trade Area: Defined as any place of production, collection, and aggregation (farm gates, factory premises, warehouses, silos, cold storages) outside the APMC yards.
  • Freedom: Farmers can sell to anyone—processors, aggregators, wholesalers, or exporters—at a place of their choice.

2. Electronic Trading Platform

Section 5

It proposed the setting up of an electronic trading and transaction platform to facilitate seamless electronic trade of scheduled farmers' produce.

Key Features:

  • Allows direct online trading.
  • Eliminates intermediaries resulting in full realization of price.
  • Can be established by companies, partnership firms, or societies.

3. Abolition of Market Fees

Section 6

The Bill prohibited State Governments and APMCs from levying any market fee, cess, or levy on farmers, traders, or electronic platforms for trade conducted in the "trade area" (outside APMC).

Conflict Point:

This provision was a major bone of contention as it caused a loss of revenue for State Governments (who collect mandi tax) and created a non-level playing field between APMC mandis (taxed) and private markets (tax-free).

4. Dispute Resolution Mechanism

Section 8

The Bill provided for a separate dispute resolution mechanism for farmers.

Structure:

  • Conciliation Board: Appointed by the Sub-Divisional Magistrate (SDM).
  • Authority: If conciliation fails, the SDM acts as the dispute resolution authority.
  • Appeal: Appeal against the SDM's order lies with the Collector/Additional Collector.

Benefits vs. Concerns (UPSC Analysis)

Intended Benefits (Govt Perspective)

  • More Options: Freedom to sell at farmgate, cold storage, etc.
  • Better Prices: Competition among buyers would lead to better price discovery.
  • No Cess: Reduced marketing costs due to zero fees outside mandis.
  • Surplus Management: Farmers in surplus regions could sell to deficit regions easily.

Critical Issues & Concerns (Why it was opposed?)

  • Federalism Issue: Agriculture is a State Subject (Entry 14, List II). States argued the Centre encroached on their powers by legislating under Entry 33 of the Concurrent List (Trade and Commerce).
  • Fear of MSP Loss: Farmers feared that if private markets (with no tax) flourished, APMC mandis would collapse, eventually leading to the end of the Minimum Support Price (MSP) system.
  • Lack of Regulation: Non-APMC markets had no regulatory oversight to ensure traders honored contracts.
  • Civil Courts Barred: The Bill barred the jurisdiction of civil courts, leaving farmers at the mercy of bureaucrats (SDM/Collector) who might lack legal expertise.