THE GIST of Editorial for UPSC Exams : 15 June 2020 (New agri-markets: A game-changer? (Indian Express))

New agri-markets: A game-changer? (Indian Express)

Mains Paper 3: Economy
Prelims level: Agriculture Produce Market Committees
Mains level: Role of Agriculture Produce Market Committees and its challenges

Context:

  • The ordinance titled The Farmers’ Produce Trade and Commerce (promotion and facilitation) Ordinance 2020 has been hailed as a game-changer, creating new opportunities for farmers to sell their produce wherever and to whomsoever they like.
  • The virtual monopoly of Agriculture Produce Market Committees (APMCs) is expected to end sooner rather than later. Will this mean a death knell for APMCs, an institution created to do exactly the same, i.e., price discovery through a competitive auction process, proper weighing, payment on time, quality grading, etc? Will farmers benefit?

Pre-APMCs era:

  • The pre-APMCs days were dominated by misinformation and price arbitrage.
  • Traders with better communications between themselves—those were the days when telephones were a luxury, and long distance calls rarely materialised—got a sense of prevailing prices and used this information to their advantage.
  • APMCs were thought to be the answer to these problems. Institutional and physical infrastructure were set up to ensure that all farm produce was brought to the designated markets, traders with licences were allowed to participate in auctions of graded produce and timely payments were made. Market yards and market committees were set up at the district and sub-district levels.
  • These changed the market dynamics (at least, partially) in favour of the farmers in the early days.

APMCs regulation:

  • APMCs were democratic institutions managed by a board/committee of mostly elected members from among the farmers and traders.
  • The state governments, obsessed with revenue collection, found it convenient to supersede these boards and appoint administrators for long periods of time.
  • Over time, they ceased to represent farmers’ interests. Set up with good intentions, like democratically managed committees, good infrastructure for auctions and storage, price discovery and communication, the system somehow deteriorated into a cartelised operation (licensing becoming the tool); cess collection became an obsession, and price discovery and transparency were put in the cold store.

Role of APMCs:

  • APMCs created market infrastructure, and used the cess collections to improve agrarian infrastructure.
  • Now, they will have no interest in investing beyond their market yards.
  • Multiple efforts to reform APMCs failed,.........................

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Decentralisation of power under APMC:

  • The central government has retained with itself the power to give licences to traders who can operate in this new area, ostensibly to protect the farmers.
  • It has the powers to prescribe the modalities of the transaction to ensure payment to farmers on time.
  • Enforcement of this could see the birth of a new set of inspectors! There is a dispute settlement mechanism for disputes with farmers under the SDO, and an appeal mechanism under the district collector.
  • While these provisions are useful, farmers will be loth to use them since most of them would rather settle than litigate.
  • New electronic trading platforms are also allowed to be set up in these areas by private individuals, FPOs and co-ops.

Way forward:

  • A centralised system of information dissemination, helping farmers take day-to-day decisions to sell looks very ‘imaginative’!
  • In a digitally connected world, farmers will rely on other channels for market information, and will decide which market to choose.
  • This is typical of the ordinance, which tries to replace a local, democratic in design—though badly managed—structure with a highly centralised, Delhi-driven one, giving extra powers to the..........................................................................................................

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Conclusion:

Prelims Questions:

Q1.  With reference to the BS-VI emission standards, consider the following statements:
1. It provide for stricter and cleaner emission norms and are at par with the emission standards being followed across the world.
2. Ministry of Road Transport and Highways has recently issued an order mandating distinct colour band for number plate sticker for BS-6 four-wheel vehicles.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer:......................................

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Mains Questions:
Q1.  What are the major changes ......................................?

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