FM Nirmala Sitharaman announces central law to give free market access to farmers

The Central government has decided to throw open the doors of national markets for farmers, allowing them to sell their produce 'wherever' and to 'whoever' without any restrictions on selling only to licensees in Agricultural Produce Market Committees (APMCs) or mandis.

Announcing the administrative reform initiatives for the agriculture sector as part of the third instalment of the economic package on Friday, Finance Minister Nirmala Sitharaman said that a central law will be enacted to provide marketing choices to farmers and help them in better price realisation for their produce.

Under the provisions of the APMC Act, farmers are required to sell their produce only in designated mandis at prices that are often regulated and many times lower than prevailing market price. This restricts earnings of the farmers and curbs their ability to take their produce for further processing or exports. While several states have agreed to abrogate or change the APMC Act and abolish the mandi system, it is still largely the market for farmers.

Sitharaman said that as being in the concurrent list, the Central law will be formulated to provide adequate choices to farmers to sell produce at attractive prices. The law will also provide for barrier-free inter-state trade for farmers and facilitate a framework for e-trading of agriculture produce.

Such restriction on sale is not there for any industrial produce, she said justifying the need for a new law.

The provision for inter-state freedom given to farmers to sell their produce would help in identifying the right market for a particular produce at a particular point of time.

The forward linkage for farmers and their involvement in the supply chain would have a bearing on the price of agricultural produce, experts said.