Why farmers are poor and commission agents are Rich after 56 years of FCI Procurement?

Why farmers are poor and commission agents are rich after 56 years of FCI procurement?

Comparison between New Agri-Trade Laws and Existing APMC Law

By:

VIJAY SARDANA

Advocate, Delhi High Court

and

Techno-legal Expert for Food & Agribusinesses

 

Farmers praying to God. 

"Save me from the APMC cartel and ensure a fair price for my crop".

S.No.	Demands & Issues of Farmers	Under New Laws	Existing System
1.	Can any buyer approach farmers to buy their crop at market rates?	Yes, under new laws anyone can pay market prices to farmers and buy the crop from farmers.	No, It was not possible because the buyer can only buy at APMC mandies through license holders’ traders. This was forcing farmers to route their crop material via APMC only. Lack of freedom to sell anywhere was a major exploitation point for farmers. Buyers were not allowed to deal directly with farmers. This state-supported cartel and monopoly (FOR POLITICAL REASONS) of middlemen are exploiting the situation to their benefit and farmers were suffering in the hands of mafia or cartel. This was reducing farmers’ income and middlemen were exploiting farmers’ that is why farmers were getting Rs. 2 to 5 per kg & consumers were paying Rs. 50. per kg for the same crop. Question is, Who was keeping Rs. 45 per kg of farmers? Why states governments do not want to answer this? People those who are protesting against reforms should explain this.
2.	Can the youth of the village start a crop trading business under new laws without a license?	Yes, now village youth can create their own marketing and retail company to sell directly to hotels, shops, consumers without any licence from APMC.	No, opportunities for village youth because they were not getting APMC license to start their own trading business possible.
3.	Can women of the village start a crop trading business under new laws without a license?	Yes, now village women can create their own marketing and retail company to sell directly to hotels, shops, consumers and from anywhere, without any licence from APMC.	No, it was not possible without getting a license to start their own trading business outside APMC.
4.	Who will fix the price of the crop?	Farmers will decide the right price for himself. Farmers in consultation with buy will fix the price of the crop based on quality. If a farmer is not happy with the price offered, he has the authority to refuse the sale.	The farmer had no role in fixing the rice. In the name of auctioning, Middlemen, ask their own staff or their own people to buy products at distressed prices. This is a fixed match in the name of the market. Middlemen were fixing the price on behalf of farmers. That is why farmers were getting Rs. 3 to 5 per kg, when consumers were paying Rs. 25 to 50 for the same crop on the same date just outside APMC mandies gate for the same quality.
5.	What will happen to APMC?	No change in APMC under new laws. The central government has no role in the management of APMC.	APMC will continue to exist as earlier, APMC is under state governments.
6.	What will happen to APMC traders’?	APMC traders can operate outside APMC as well under new laws.	APMC traders’ can continue to operate inside APMC.
7.	Is there a specific place to do business transactions?	Under new law farmers and the buyer can decide when and where to meet the buyer to sell the crop.	No choice, only place for the transaction is APMC yard only.
8.	Can the transactions happen on holds and on weekends?	Yes, Under new law farmers and the buyer can decide when and where to meet the buyer to sell the crop.	No transaction is possible on holidays or if APMC is closed.
9.	How small farmers can take benefit of new laws.	Small farmers’ can produce specific product as per demand or buyer or they can make their own club, FPO, Cooperative, etc. can do sell together to any buyer or directly.	It was not possible because buyers cannot approach farmers directly, without using middlemen or intermediary with a license. If buyers are keen to deal with farmers directly, it is crime and unlawful.
10.	Payment for the crop	Until payment is made, ownership of the material is with farmer only. No one can force farmers to sell on credit. Unless the farmers are keen to offer the material on credit.	Farmers were at the mercy of Traders’. Traders’ were deciding the payment schedule and there was no action against traders by APMC for violation of payment terms. If buyers were keen to deal with the farmer, it was a crime and unlawful. Commission payment to middlemen was mandatory even if both buyer and seller want to deal directly without the help of any middlemen.
11.	Who will decide the quality?	Now farmers and buyers can talk to each other. Farmer sand buyers jointly will decide what to produce and of which quality.	Buyers cannot deal with farmers directly to convey their quality requirements. That is why farmers were always paid a lower price for their crop. Middlemen were deducting the price of farmers in the name of poor quality and were selling the same farm produce at a premium to buyers in the name of service charges and shortage in the market.
12.	Who will own the land in case of a contract farming?	The land is and will firmly remain with the farmer. Even in payment dispute in contract with buyers, farmers land cannot be touched to recover the payment.	There is no such provision under the existing system. Please read the APMC Act, it has no responsibility towards farmers.
13.	Can farmers’ demand farmers’ services to meet quality needs from the buyer?	Yes, the farmer and buyer can decide what is required to produce good quality. These can be documented to ensure transparency and cost implications.	No such provision because buyers and farmers never meet. Please read the APMC Act, it has no responsibility towards farmers.
14.	Dispute Resolution	Courts are very expensive and time consuming for farmers. Mediation and arbitration as per the Indian legal system are encouraged to solve the disputes under the guidance of civil administration.	No provision to encourage mediation or arbitration under the existing system. Only the expensive and time-consuming court system is the option for small farmers. Please read the APMC Act, it has no responsibility towards farmers.
15.	Will these new laws abolish APMC?	No. These laws have no jurisdiction over APMC.	APMCs are created and managed by State Governments. They will continue to do that. Please read the APMC Act, it has no responsibility towards farmers.
16.	How much tax applies to the transaction?	No tax and no cess are applicable under new laws.	Taxes and cess vary from 1% to 8%, depends upon the state government. Ask your state how much tax they are charging. Please read the APMC Act, it has no responsibility towards farmers’ services. They do not even provide water and sitting arrangements in hot summers.
17.	Who will benefit from these new laws?	Farmers. Now they can decide when to sell, where to sell, how to sell.	Farmers were not able to sell outside APMC because the buyer cannot deal with farmers outside APMC.
18.	What facilities the government will give to farmers to improve their marketing ability.	Various schemes are launched for farmers to support their training, Infrastructure development fund, etc.	There was no provision for any such support under the APMC Act.
19.	Why the government does not fix MSP under these laws?	70% of people live in rural India. They can decide how much they want to pay for farmers in their village to buy their food. If we make mandatory MSP under the law, most of the poor people in the village and most of the dairy and poultry farmers will suffer.	There is no provision of MSP under the APMC Act. States governments are free to decide if they want to buy from farmers on MSP.
20.	Can we make MSP mandatory for the private sector?	Every price is always concerning quality and service. If there is a quality issue, farmers will be the looser. Therefore, farmers should deal directly with the buyer and fix the price and quality. Private trade can also import if they do not get quality material or domestic prices are too high.	There is no such provision in the APMC Act. Why this was not introduced, please ask those who are opposing the new laws.
21.	Will the government buy its requirement at MSP?	Yes, the government will continue to buy at MSP for its all food security programs. As long as there is poverty in India, food secuirty programs are required.	Yes, the government is buying at MSP for its all food security programs.
22.	What are the other options available to farmers to sell their crops?	At their own choice, Farmers can sell their crops in an open market, to processing companies, exporters, hotels, restaurants, retailers, etc. Farmers can also sell in APMC market, eNAM, Futures market, Haat, etc. without any licencing requirements.	APMC Act only allows selling at APMC that too via license holder trader.

Papaji, How long we have to suffer in the hands of these APMC cartels? Why the govt is not doing anything for us?

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