Need for APMC reforms

Agricutural Produce Marketing committees were set up through Agriculture Produce Market Regulation Act,1970.The basic objective was to protect the farmers from the vagaries of market and moneylenders  and to ensure remunerative prices for farmers.But the purpose has been diluted over the course of time and the profit margins of  farmers has been reduced which results in increased the food inflation.

As per APMC Act in states trading outside mandi is not allowed and to trade within mandis license is needed.This system has been misuesd by the middlemen and they possess the licenses and hoard food crops and exercise monopoly to dictate the any prices from farmers.Farmers not having enough knowledge about licence procurement and warehousing availabilities have to suffer under the hands of these middlemens.

Consequently there is an inherent need to ensure the need for reforms as it will farmer's margin will increase as they can directly sell to retailers.This will be a win-win situation for both side as retailers will be able to spend less and therefore  spend the remaining expense on back end infrastructure.This inturn will also help in reducing food inflation in long term as the costs are reduced in the supply chain.