Progress or Dead End?

State governments have all the powers to enact reforms, but very few have shown the willingness to go ahead

- SIRAJ

It is a common belief that the repeal of the three farm laws marked the end of agricultural market reforms. The reality is that the reforms are possible and desirable. State governments have all the powers to enact reforms, but very few have shown the willingness to go ahead. What is puzzling is that despite the noise about reforms, even BJP-ruled states and Union Territories have not found them necessary.

A fresh effort in this direction is the draft National Policy Framework on Agricultural Marketing on which the Union Government invited comments in November 2024. One hopes that the guidelines will be dispassionately considered by the state governments. The Centre also needs to deeply engage with states so that suitable amendments to laws are quickly legislated. More importantly, the states need to issue the rules under the amended Acts so that the reforms can be implemented and enforced.

THE APMC REFORM

The most contentious of the three farm laws was the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020. It enabled farmers to sell their produce outside the physical boundaries of Agricultural Produce Market Committee (APMC) yards. It prohibited state governments from levying fees or taxes on agricultural produce sold outside the APMC’s physical boundary. The only requirement for purchasing produce from farmers was a PAN card. This Act was seen as destructive of APMCs. It was feared that the freedom from payment of any fee or taxes would result in agricultural trade shifting from APMCs to ‘trade areas’ outside. It was argued that this will result in withering away of APMC mandis. In Punjab and Haryana, it was projected by agitating farmers unions as a possible ploy to abandon procurement of wheat and paddy at the minimum support price.