Chapters :

Agriculture – 11


Model APMC Act 2003

The Model act con was proposed by the government to overcome the limitations of APMCs as it was fragmented and misused by middlemen.


  1. To provide for development of efficient marketing system.
  2. Promotion of Agro-processing and agricultural exports.
  3. Building effective infrastructure for marketing Agriculture produce.

The act has the following aspects covered:

  • Direct sale of produce to contract farmer sponsors
  • Special markets for specified agricultural commodities
  • Single levy of market fee on notified commodities
  • Licensing to be replaced with registration of market functionaries
  • Increase the competitiveness for market
  • Enable private players to set up markets

Model Agriculture Produce and livestock marketing Act 2017

  • The purpose is to create a single agri-market where with single license one can trade agri-produce as well as livestock.
  • The government’s aim is to set up a wholesale market at every 80 km. The new law will end the monopoly of APMC and allow more players to set up markets and create competition so that farmers can discover prices and sell their produce accordingly.
  • The law seeks to set a separate authority to regulate all agro-markets including APMC and provide trading licenses
  • It caps market fee (including developmental and other charges) at no more than 1 per cent for fruit and vegetables, and 2 per cent for food grain. It caps commission agents’ fee at not more than 2 per cent for non-perishables and 4 per cent for perishables.
  • Promotion of national market for agriculture produce through provisioning of inter-State trading license, grading and standardization and quality certification, rationalization of market fee and commission charges, provision for special commodity market yard and promotion of e-trading to increase transparency.


National Agriculture Market (eNAM) is a pan-India electronic trading portal which networks the existing APMC mandis to create a unified national market for agricultural commodities. It was established through Agri-Tech Infrastruture fund (ATIF) in 2015. Small Farmers Agribusiness Consortium (SFAC) is the lead agency for implementing eNAM under the aegis of Ministry of Agriculture and Farmers’ Welfare, Government of India.

Vision: to promote uniformity in agriculture marketing by streamlining of procedures across the integrated markets, removing information asymmetry between buyers and sellers and promoting real time price discovery based on actual demand and supply. One nation one market.

Activities:  Integration of APMCs across the country through a common online market platform to facilitate pan-India trade in agriculture commodities, providing better price discovery through transparent auction process based on quality of produce along with timely online payment.

Presently 1000 Mandis has been integrated with eNAM by 2020. Around 1.66 crore farmers have been registered with eNAM. Modules:

  1. FPO module on eNAM – FPO conduct trade in eNAM from their collection centres
  2. Warehousing based electronic Negotiable warehousing receipts trading
  3. Logistics module
  4. Inter-operability between ReMS (unified market Portal –UMP) and eNAM portal was launched.


With a view to integrate farmers with bulk purchasers including exporters, agro- industries etc. for better price realization through mitigation of market and price risks to the farmers and ensuring smooth agro raw material supply to the agro industries, “Model Contract Farming Act” was enacted. Farmer’s producer organizations (FPO’s) have a major role in promoting Contract Farming and Services Contract. On behalf of famers they can enter into agreement with the sponsor.

Salient features of Model Contract Farming Act, 2018 are:

  1. The Act lays special emphasis on protecting the interests of the farmers, considering them as weaker of the two parties entering into a contract.
  2. In addition to contract farming, services contracts all along the value chain including pre-production, production and post-production have been included.
  3. Contracted produce is to be covered under crop / livestock insurance in operation.
  4. Contract framing to be outside the ambit of APMC Act.
  5. No permanent structure can be developed on farmers’ land/premises
  6. No right, title of interest of the land shall vest in the sponsor.
  7. Promotion of Farmer Producer Organization (FPOs) / Farmer Producer Companies (FPCs) to mobilize small and marginal farmers has been provided
  8. The entire pre-agreed quantity of agro produces to be brought by the contract farmers
  9. CEFG Contract farming facilitation groups to be set up at village level or panchayats level.

Latest legislation of the government to improve farm sector

The government as part of the Atmanirbhar Bharat Abiyan in the post pandemic period has come up with major policy decisions and passed the folloeing ordinances:

  1. Essential Commodities Amendment act
  2. Farming Produce Trade and Commerce (Promotion and Facilitation Ordinance), 2020
  3. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm services Ordinance, 2020.

Implications of these acts:

Essential Commodities Amendment Act –

During bumper harvest due to lack of storage facility the farmers suffer losses. The essential commodities notified under the previous act of 1955 will be removed hence giving freedom for farmers to sell the commodities like cereals, pulses oilseeds, edible oils onion, and potatoes anywhere. It will drive up investment in cold storage and modernization of supply chain management.

Farming Produce Trade and Commerce (Promotion and Facilitation Ordinance), 2020 –

There are restrictions to farmers to sell outside the APMCs. Hence this act will remove the restrictions and facilitate barrier free trade inter-state and intra-state trade. The farmers need not sell the produce only to the registered agents in the registered mandi. It will reduce the marketing cost and surplus produce will get better prices. It aims to achieve one India one Agricultural market.

Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm services Ordinance, 2020 – this act is to overcome the limitation of fragmented farmers and small produce. The farmers can be linked directly to all other functionaries’ like wholesalers, aggregators, exporters etc. it will transfer the market risk form farmers to sponsors and enable modern technology accessibility. It will eliminate intermediaries. Hence private players will build efficient supply chain and global markets and modern technology into agriculture.

Agencies engaged in agrimarketing


National agricultural Co-operative marketing federation of India Limited established 1958

. NAFED is registered under the Multi State Co-operative Societies Act. NAFED was setup with the object to promote Co-operative marketing of agricultural produce to benefit the farmers. Agricultural farmers are the main members of NAFED.

The objectives of the NAFED shall be to organize, promote and develop marketing, processing and storage of agricultural, horticultural and forest produce, distribution of agricultural machinery, implements and other inputs, undertake inter-state, import and export trade, wholesale or retail as the case may be and to act and assist for technical advice in agricultural, production for the promotion and the working of its members, partners, associates and cooperative marketing, processing and supply societies in India.

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