Centre’s plans for farm reforms may not cut ice with TN farmers

The central government’s push for reforms in Agriculture Produce Marketing Committee (APMC) to empower farmers and enable them to fix their own prices may sound enticing but could be of little help when applied in real situations.

Farmers’ representatives in Tamil Nadu say that instead of introducing reforms in the act and eliminating the middleman, the Centre should regularise the whole process including fixing of a minimum support price (MSP) for produce. Economists suggest introducing farmers to e-platforms to save them from exploitation.

The model APMC Act was introduced in 2003, and many reforms have been proposed in 2007, 2013, and 2017. As of now, 17 states have amended the Act according to their convenience. The Act isn’t implemented in Kerala while Bihar repealed it in 2006. Each state has its own regulation and functioning of mandis under APMC.

The Tamil Nadu model

In Tamil Nadu, the APMC known as the Tamil Nadu State Agricultural Marketing Board, was established in 1977. At least 21 market committees functioning under it oversee 277 regulated markets. Earlier a per cent of the value of the produce was collected as market fees from traders, who procure the produce from farmers.

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As per APMC norms, farmers from other states such as Maharashtra, Karnataka and Andhra Pradesh can sell their produce in Tamil Nadu, but only through regulated markets. According to the board, the regulated markets provide necessary infrastructure for both farmers and traders, to enable the former to bring their agricultural produce to regulated markets. It also claims of ensuring that farmers get maximum price benefit for their agricultural products without the intervention of middlemen and commission.

The board says, these services are provided free of cost to farmers and that now the state has also done away with the marketing fee.

Claims far from reality, say farmers

The version of the agricultural marketing board, however, is disputable as farmers’ representatives allege of gross irregularities in the entire process wherein the traders have the upper hand in fixing the price instead of the farmer and there is no restriction on the role of the middleman.

“In reality it is different. There are no proper godowns or restrooms. The farmers bring their produce to mandis by themselves. There is no license issued to traders. Whoever likes to purchase is free to come. In fact, the traders form a syndicate and fix the price. An outsider can come to the mandi, but he can purchase the products only at the price fixed by the syndicate. The traders pay the committee officials commission to ensure their silence,” said P Shanmugham, general secretary of Tamil Nadu Farmers Association.

“The mandi officials in connivance with the traders fix the price in the first place. There are no auctions. So either the farmer should sell his produce to them or is forced to sell it outside the mandi,” says Swamimalai Sundara Vimalanathan, secretary of Cauvery Farmers Protection Association

In most of the mandis, it is politicians who dictate monopoly over the procurement under the garb of traders, Vimalanathan says.

The free entry of anyone to mandis makes them accessible to middlemen, who sell the farmers’ produce in the market at inflated rates.

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“Take banana leaf for example. The middlemen purchases it for ₹1. The transportation charges will cost another ₹1. He sells the leaf in Chennai at ₹7, while it should have cost around ₹4. The remaining amount goes to his pocket. This example can be applied to all agricultural products” he said.

‘Regularise markets, fix MSP’

Farmer’s representatives say the government’s claim that reforms in APMC will enable farmers to fix their own prices is a myth, as in reality the farmer cannot do without a mediator to sell his produce.  They instead have demanded the government to fix a minimum support price and regulate the market.

“What we need is a minimum support price. But the government says that farmers can fix the price on their own. Farmers were never in the position of fixing the price. They need to depend on intermediaries. It is the traders who fix the price. So, instead of trying to eliminate the middlemen, the government should regularise them,” says V Rajaram, vice-president, Cauvery Delta Farmers Welfare Association.

Citing an example, he relates how banana farmers in Karur district were exploited by unregulated traders.

“It takes Rs.1 lakh to cultivate banana in an acre. The co-operative society gives a farming loan of up to₹40,000. Farmers usually borrow the rest of the amount from local traders. This makes them indebted to sell their yield only to the traders who lent them money, often at low prices. They sell a bunch of banana which otherwise would have cost ₹100 at ₹75,” Rajaram says.

Shanmugham says there is nothing original about the Centre’s move to allow farmers to sell their products as farmers for long have been selling their products including in other states with the help of traders.

It is to be noted that Tamil Nadu is the first state which introduced contract farming. Here it is mandatory for a buyer to hold a government-issued license to purchase the produce from farmers. It is only recently that the district marketing committees started issuing licenses to buy produce like banana, tomato, etc.

“Some traders come to mandis only during peak seasons such as festivals and marriage. Such traders must be eliminated. In railway stations, the porters are given licenses. Likewise, the government should allow only licensed traders inside the mandi,” Rajaram adds.

eNAM benefits big farmers

One of the biggest promises the Centre makes to tweak APMC Act is to enable farmers to sell produce through online portals.

When asked about online trading, farmers, however, say it will only benefit big farmers who have the ability to market on their own. As of now, only 23 mandis in Tamil Nadu have been linked to e-NAM, an online trading platform for agricultural produce.

There, however, is a silver lining.

According to economist Dr P Alli, who teaches at the Vellore Institute of Technology, the proposed amendment of the APMC Act will now permit traders to buy farm produce from farmers directly anywhere in the country even outside the regulated market yards.

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“The proposed amendment will also provide a choice for farmers to take their produce to the most lucrative market at attractive prices where they will not be compelled to sell it to exploitative traders at the local mandi. This, in turn, would usher in barrier-free inter-state trade, eliminating the role of middlemen and giving a big boost to the government’s Electronic-National Agriculture Market (e-NaM) programme,” she said.

While it is hoped that all the states will welcome the change, Tamil Nadu, in particular, needs to give immediate priority to bringing the remaining 90 per cent of its markets under e-NaM scheme so that farmers can make direct sale to consumers and bulk purchasers without going to mandis, she added.