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Unreasonable reform

Aritra Bhattacharya |

In the 1960s when traders and agents were looting farmers — paying them a pittance for their produce while selling the same at steep prices in cities — the government of Maharashtra introduced the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act 1963. The law, and the markets set up under it, were supposed to enable better price realisation for farmers in the state. Thanks to market committees being entrusted with the regulating rates for different kinds of produce, farmers also received a guaranteed price for their produce under the Agricultural Produce Market Committee system.

But traders and commission agents still remained the boss. They earned several times the money they paid farmers by selling the produce in the open market. Every so often, they allegedly formed cartels and withheld stock to inflate retail prices — onions in Maharashtra being a case in point. 

Since the farmer was getting a raw deal despite APMCs, farmer organisations in the state had long demanded an overhaul of the system. 

The BJP-led government in Maharashtra recently brought in an ordinance paying heed to this long standing demand. While farmers earlier had to compulsorily sell vegetables and fruits to APMC-licensed traders, following the 28 June order, they were allowed to sell their produce in the open market, directly to consumers. The government argued this would enable better price realisation for farmers.  

Almost three months since the order, the government&’s argument stands exposed. Despite the promise of an open field and a free market, farmers in Nashik and Pune districts were getting five paise for a kilogram of onions during the last week of August. These farmers are still carting in their produce to APMCs, as there is no alternative sales channel — just voluble promises and sundry targets from government departments. 

Maharashtra has 305 main APMC markets and 603 APMC sub-markets that cover the entire area of the state. Each market committee, comprising elected members among who are farmers, traders and hamals (coolies), regulates trade in agricultural commodities in its respective market area. In most parts of the state, Sharad Pawar&’s Nationalist Congress Party controls these bodies. 

Before the APMC reform, farmers in a market area had to compulsorily sell their produce to an aadta (trader/ commission agent) licensed by the respective market committee. The aadta took care of cleaning, sorting and packing the produce, for which they charged the farmer a market committee-determined commission (four to eight per cent). Apart from that, the farmer also had to pay for transport, loading and unloading, and weighing. The aadta then sold the produce to end buyers like hotels and restaurants, apart from middlemen who went all the way down to the neighbourhood store. Though the aadta paid the farmer a fixed rate for his produce as determined by the market committee, there was no bar on the rate at which the former could sell the same to buyers — the latter is always determined by “market conditions”.

Following the amendment introduced by the state government, farmers can now, in principle, reap benefits of inflated retail prices via direct selling, bypassing the APMCs. But that is easier said than done. 

Fruits and vegetables are (highly) perishable, but are harvested periodically in limited quantities. That quantity is not enough to fill an entire truck/pick-up van, but neither can farmers wait till the next plucking before taking the produce to the market. Hence, in most cases, several farmers get together to hire one vehicle. Farmers one spoke to during recent travel in Marathwada and rural Pune said that in most cases, they never travel to the APMCs themselves. Instead, they rely on agents with whom they have been doing business for decades. “I generally sell my produce to a specific aadta,” says Suresh Pimpale from Narayangaon, “as do most other farmers in my village…The aadta&’s employee visits the village to lift our produce. Since he&’s been lifting our produce for years, he knows when to come.”

“All big aadtas have several employees who travel around the hinterland lifting produce. Some of them even have connections in the transport business. All in all, they play a crucial role in ensuring the commodities reach the market in a good condition,” says Vitthal Shinde, a farmer in Wagholi, on the outskirts of Pune. For several decades, Shinde was also an aadta at the Market Yard wholesale mandi in Pune.

Although the government has allowed farmers to sell fruits and vegetables in the open market, it has done nothing to enable collection and transport from far flung areas of the state. A key functionary of Swabhimani Shetkari Sangathana says the government could have at least looked at setting up cooperatives and collection centres along the lines of Amul&’s milk cooperatives in Gujarat. 

“Cooperatives are the only viable option if farmers are to receive any of the benefits the government speaks of,” a person says requesting anonymity as his party is part of the ruling alliance in the state. “Sadly, the government is not even considering the option.” Instead, the government&’s emphasis on farmers’ markets after the APMC overhaul suggests it expects farmers to morph into marketeers overnight.

Equipping the farmer, providing him with the knowledge and tools to negotiate the market is a long and ardous process, and one that has not even begun, says a source in the Maharashtra State Agricultural Marketing Board. “If we begin outreach programmes in all earnest at the village level, it will take a few years at least to educate them about the market. Only after they acquire a new skill set can they compete on the market,” he says, requesting anonymity. 

Numbers from MSAMB also show how difficult the proposition is. Following the ordinance, the government decided to waive the Rs 15 lakh direct marketing licence fee for farmer-producer companies. It had hoped farmers would come together to form groups and apply for a marketing licence with MSAMB in droves. But even though a long time has passed, the number of such applications is still a single digit figure. Whereas the total number of direct marketing licence applications including those from established traders has crossed 50. 

“We are searching for farmer groups in the major vegetable producing areas,” says the MSAMB source. “We are trying to guide farmers, help them set up companies,” he says, stressing on the need for sensitisation and training of farmers.

Milind Akare, managing director at MSAMB, says the government is making all efforts to extend benefits to farmers. “We are focussing afresh on direct marketing licenses, holding seminars and outreach programmes for the same,” he says. 

The agri-marketing board is gung ho about farmers’ markets, the first of which was inaugurated by chief minister Devendra Fadnavis in Mantralaya on 14 August.  “We are working with municipal corporations to find space where farmers can sell their produce,” says Akare. The board&’s target for farmers’ markets in urban areas in collaboration with municipal corporations is 100 by this December. “We are in advanced talks for 35 outlets in Mumbai, Pune and Nagpur,” mentions Akare, “We are also trying to rope in some NGOs for local area publicity and sales.”

These efforts, however, are alarmingly inadequate. Even if all farmers’ markets come up in time, they will be a pittance compared to the 900 plus APMC markets. In addition, while the focus is on wholesale trade, in case of farmers’ markets, the onus clearly is on retail. 

In other words, even if all government targets are met, only a miniscule part of the total volume of trade in vegetables and fruits will happen via these markets. As such, these markets themselves cannot constitute an alternative to the APMC network. 

 There&’s also the question of consumers’ needs for variety as opposed to farmers’ practice of mono culture — something that the government does not seem to be bothered about. “A farmer generally grows one vegetable. But if he sells only that vegetable in a retail stall, he will hardly get any customers,” says a senior functionary of the Swabhimani Shetkari Sangathna, which is part of the ruling alliance in the state.  

Arrivals at APMCs also bear out how mere change in law means close to nothing. The Vashi APMC in Mumbai, the country&’s largest market for vegetables and fruits, has seen “a small, eight to 10 per cent dip in arrival volumes since June,” says joint secretary Avinash Deshpande.

The Maharashtra government is seeking to milk this “reform” to join the National Agriculture Mission for “free and fair agriculture trade”. But the deal for its farmers is neither free nor fair as despite the overhaul, they’re dumping their produce for want of better prices.

The writer is principal correspondent of The Statesman in Mumbai and a Phd scholar at the Centre for Studies in Social Sciences, Calcutta.