Press Information Bureau

Government of India

Ministry of Commerce & Industry

21-December-2011 12:31 IST

Adverse Effect of Agricultural Produce Marketing Act on Retail Market

As Agriculture marketing is a State subject, a number of State Governments and Union Territories have enacted legislations (APMC) Acts) to provide for regulation of agricultural produce markets. In order to promote, interalia direct marketing/procurement of agricultural produce directly from farmers by bulk buyers, exporters/processors etc. The Ministry of Agriculture, in consultation with States/Union Territories, framed a Model APMC Act and circulated the same to States/Union Territories, in 2003, for making necessary amendments in their existing APMC Acts. Nineteen States/Union Territories have made such amendments in their APMC Act for direct marketing.

The Government has since approved a proposal to permit FDI, up to 51% under the Government route, in multi brand retail trading , subject to specified conditions. Amending the APMC Act is not one of the conditions. However, the decision has been suspended in order to evolve a broader consensus among various stakeholders.

Farmers are expected to benefit from the reduction in post-harvest losses, likely to result from the strengthening of the backend infrastructure and direct purchases by the retailers, thereby obtaining remunerative prices for their produce.

This information was given by Shri Jyotiraditya M. Scindia, Minister of State for Commerce and Industry in written reply to a question in the Rajya Sabha today.

DS/GK

Agricultural produce market regulation shapes FDI in multi brand retail, with central approval suspended pending broader consensus. The document addresses State regulation under APMC Acts and the Model APMC Act promoting direct marketing; nineteen jurisdictions amended laws to allow direct procurement from farmers. The Centre had approved permitting foreign direct investment in multi brand retail subject to conditions but did not require APMC amendment and has since suspended the decision to seek broader stakeholder consensus. The policy is said to aim at reducing post harvest losses and improving prices through strengthened infrastructure and direct retail purchases.