9th July 2021
Agri Infra funds loans have been extended to APMCs
News : The Cabinet has decided to allow state-run market APMCs to access financing facilities through its Agricultural Infrastructure Fund
Aim: To calm the fears of protesting farmers that such market yards are being weakened by the new farm laws.
About the news:
Along with APMCs the scheme is also available to federations of cooperative organisations, Farmers Producers Organizations and self help groups.
The markets will also be allowed for interest subvention for loans up to ₹2 crore. APMCs will be allowed to access separate loans for different kinds of infrastructure projects to build cold storage, silos, sorting, grading and assaying units in their market yards.
Further the period of scheme was extended for two more years upto 2025-26.
The overall period of the scheme has been extended to 2032-33.
The modifications in the Scheme will help in achieving a multiplier effect in generating investments and it will also ensure that the benefits reach small and marginal farmers.
APMC stands for Agricultural Produce Market Committee (APMC), they are operating under the State Government since agricultural marketing is a State subject.
The APMC has mandis in the market area which regulates the notified agricultural produce and livestock.
The aim of introduction of APMC was to limit the occurrence of Distress Sale by the farmers under the pressure and exploitation of creditors and other intermediaries.
They ensure worthy prices and timely payments to the farmers for their produce.
APMCs are also responsible for the regulation of agricultural trading practices.
The Benefits of APMCs are:
Elimination of Needless intermediaries
Improvement in market efficiency was observed through a decrease in market charges.
Protection of producer-seller interest.
Issues with the APMCs system:
The monopoly of APMC was observed in pricing and it deprived farmers of better customers and consumers from original suppliers.
There are huge entry barriers such as License fees which are highly prohibitive.
The agents in an APMC form a cartel and deliberately restraint from higher bidding. Agricultural Produce is procured at a lower price for the farmers and being sold at a higher price.