Editorial✍ Financial Express

Agri reforms: Where did the APMCs go wrong?

Agricultural Produce Market Committees (APMCs) were brought in to ensure fair prices for farmers:

  • Pre-APMC days in India were dominated by price misinformation and arbitrage (quick purchase and sell with middlemen making profits).
  • APMCs were created in the early 1960s to ensure price discovery and fair transactions.
  • They were designed to create infrastructure for auctions and storage out of the cess paid by the buyers and not by the taxpayers.
  • Many APMCs (mandis) used the funds to create rural marketing infrastructure.
  • It was designed as a democratic, decentralised system with physical auctions as the basis of price discovery and licencing of traders as a way to ensure payment.

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