Since March, 2020, there has been a consistent rise in the number of COVID-19 cases in India. As of May 18, 2020, there were 96,169 confirmed cases of the infectious disease, of which 3,029 persons died. To contain the spread of COVID-19 in India, the central government imposed a nation-wide lockdown on March 24 till April 14, now extended till May 31. To ensure continued supply of agriculture produce during the lockdown and control the spread of the disease, some states have amended their respective Agriculture Produce Marketing Committee (APMC) laws. This blog explains the manner in which agriculture marketing is regulated in India, steps taken by the centre for the agriculture sector during the COVID-19 crisis, and the recent amendments in the APMC laws that are being announced by various states.
How is agriculture marketing regulated in India?
Agriculture falls under the State List of the Constitution. Agriculture marketing in most states is regulated by APMCs established by state governments under the respective APMC Acts. The APMCs provide infrastructure for marketing of agricultural produce, regulate sale of such produce and collect market fees from such sale, and regulate competition in agricultural marketing. In 2017, the central government released the model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 to provide states with a template to enact new legislation and bring comprehensive market reforms in the agriculture sector. The 2017 model Act aims to allow free competition, promote transparency, unify fragmented markets and facilitate flow of commodities, and encourage operation of multiple marketing channels. In November 2019, the 15th Finance Commission (Chair: Mr N. K. Singh) in its report provided that states which enact and implement all features of this Model Act will be eligible for certain financial incentives.
What steps were taken by the central government in light of COVID-19?
On April 2, the Ministry of Agriculture and Farmers’ Welfare launched new features of the electronic-National Agriculture Market (e-NAM) platform to strengthen agriculture marketing by reducing the need of farmers to physically come to wholesale mandis for selling their harvested produce. The e-NAM platform provides for contactless remote bidding and mobile-based any time payment for which traders do not need to either visit mandis or banks. This helps in ensuring social distancing and safety in the APMC markets to prevent the spread of COVID-19.
On April 4, 2020, the Ministry of Agriculture and Farmers’ Welfare issued an advisory to states for limiting the regulation under their APMC Acts. The advisory called for facilitating direct marketing of agricultural produce, enabling direct purchase of the produce from farmers, farmer producer organisations, cooperatives by bulk buyers, big retailers, and processors.
On May 15, 2020 the Union Finance Minister announced certain reforms for the agriculture sector of the country to reduce the impact of COVID-19 and the lockdown. Some of the major reforms include: (i) formulating a central law to ensure adequate choices to farmers to sell agricultural produce at attractive prices, barrier free inter-state trade, and framework for e-trading of agricultural produce, (ii) amending the Essential Commodities Act, 1955 to enable better price realisation for agricultural produce such as all cereals, pulses, oilseeds, onions, and potatoes, and (iii) creating a facilitative legal framework for contract farming, to enable farmers to engage directly with processors, large retailers, and exporters.
Which states have made changes to agriculture marketing laws?
The Uttar Pradesh Cabinet has approved an ordinance, and Madhya Pradesh, Gujarat, and Karnataka have promulgated ordinances, to relax regulatory aspects of their APMC laws. These Ordinances are summarised below:
Madhya Pradesh
On May 1, 2020, the Madhya Pradesh government promulgated the Madhya Pradesh Krishi Upaj Mandi (Amendment) Ordinance, 2020. The Ordinance amends the Madhya Pradesh Krishi Upaj Mandi Act, 1972. The 1972 Act regulates the establishment of an agricultural market and marketing of notified agricultural produce. The following amendments have been made under the Ordinance:
Market yards: The 1972 Act provides that in every market area, there should be a market yard, with one or more sub-market yards, for conducting all marketing activities such as assembling, grading, storage, sale, and purchase of the produce. The Ordinance removes this provision and specifies that in the state, there may be: (i) a principal market yard and sub-market yard managed by the APMC, (ii) a private market yard managed by a person holding a license (granted by the Director of Agriculture Marketing), and (iii) electronic trading platforms (where trading of notified produce is done electronically through internet).
Director of Agricultural Marketing: The Ordinance provides for the appointment of the Director of Agricultural Marketing by the state government. The Director will be responsible for regulating: (i) trading and connected activities for the notified agricultural produce, (ii) private market yards, and (iii) electronic trading platforms. He may also grant licenses for these activities.
Market fee: The Ordinance also provides that market fee for trading under licenses granted by the Director of Agricultural Marketing will be levied as prescribed by the state government.
Gujarat
On May 6, 2020, the Gujarat government promulgated the Gujarat Agricultural Produce Markets (Amendment) Ordinance, 2020. The Ordinance amends the Gujarat Agricultural Produce Markets Act, 1963. The amended Act is called the Gujarat Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 1963. Key amendments made under the Ordinance are as follows:
Regulation of livestock market: The Ordinance brings the regulation of marketing of livestock such as cow, buffalo, bullock, bull, and fish under the ambit of this Act.
Unified market area: The Ordinance provides that the state government may declare the whole state as one unified market area through a notification. This can be done with the purpose of regulation of marketing of notified agricultural produce.
Unified single licence: The Ordinance provides for the grant of a single unified trading license. The license will be valid across the state in any market area. Existing trade licenses must be converted into the single unified licenses within six months from the date of commencement of the Ordinance.
Markets for conducting trading: The Ordinance allows the state government to notify any place in the market area as the principal market yard, sub-market yard, market sub-yard, or farmer consumer market yard for the regulation of marketing of notified agricultural produce. Certain places in the market area can also be declared a private market yard, a private market sub-yard, or a private farmer-consumer market yard. The Ordinance adds that the notified agricultural produce may also be sold at other places to a licence holder, if especially permitted by a market committee.
Market sub-yards: The Ordinance provides that a market area should have market-sub yards (warehouse, storage towers, cold storage enclosure buildings or such other structure or place or locality). Further, it also provides that the owner of a warehouse, silo, cold storage or such other structure or place notified as market sub-yard, may collect a market fee on notified agricultural produce. He may also collect user charge on de-notified agricultural produce transacted at the market sub-yard. The rate of the fees should not exceed the rates notified by the state government. However, no market fee shall be collected from farmers.
E-trading: The Ordinance provides for the establishment and promotion of electronic trading (e-trading) platforms. It provides that a license granted by the Director of Agricultural Marketing is necessary to establish an e-trading platform. Further, it provides that applications on the e-trading platform shall be inter-operable with other e-platforms as per specifications and standards laid down by the Director. This has been done to evolve a unified National Agricultural Market and integrate various e-platforms.
Karnataka
On May 16, the Karnataka government promulgated the Karnataka Agricultural Produce Marketing (Regulation and Development) (Amendment) Ordinance, 2020. The Ordinance amends the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966. The 1966 Act regulates the buying and selling and the establishment of markets for agricultural produce throughout the state. Key amendments made under the Ordinance are as follows:
Markets for agricultural produce: The 1966 Act provides that no place except the market yard, market sub-yard, sub-market yard, private market yard, or farmer - consumer market yard shall be used for the trade of notified agricultural produce. The Ordinance substitutes this to provide that the market committee shall regulate the marketing of notified agricultural produce in the market yards, market sub-yards and submarket yards. Thus, the Act no longer bars any place for the trade of notified agricultural produce.
Penalty: The 1966 Act provides that whoever uses any place for purchase or sale of notified agricultural produce can be punished with imprisonment of up to six months, or a fine of up to Rs 5,000, or both. The Ordinance removes this penalty provision from the Act.
Uttar Pradesh
On May 6, the Uttar Pradesh Cabinet approved the Uttar Pradesh Krishi Utpadan Mandi (Amendment) Ordinance, 2020. According to the state’s press release, the Uttar Pradesh government has decided to remove 46 fruits and vegetables from the ambit of the Uttar Pradesh Krishi Utpadan Mandi Act, 1964. The 1964 Act provides for the regulation of sale and purchase of notified agricultural produce and for the establishment and control of agricultural markets in Uttar Pradesh.
Certain fruits and vegetables exempted from the provisions of the Act: These fruits and vegetables include mango, apple, carrot, banana, and ladies’ finger. The proposed amendment aims to facilitate the purchase of these products directly from farmers from their farms. Farmers will be allowed to sell these products at the APMC mandis as well, where they will not be charged the mandi fee. Only the user charge will be levied as prescribed by the state government. As per the state government, this will entail a loss of revenue of approximately Rs 125 crore per year to the APMCs.
License: Specific licenses can be procured to carry on trade at places other than APMC markets. This will encourage the treatment of warehouses, silos, and cold storages as mandis. The owners or managers of such establishments can charge the user fee for managing the mandi. Further, unified license can be used to trade at village level.
In India, police and law and order come under the purview of state governments.[1] Accordingly, each state has its own police force for maintaining law and order and investigating crimes. However, due to financial and other constraints, states have critical gaps in their policing infrastructure.2 Figure 1 shows the expenditure by states on police, as a percentage of their total budget. In 2015-16, Manipur spent the highest proportion of its state budget on police, followed by Punjab and Jammu and Kashmir.
Figure 1: Police Expenditure as a proportion of total state budget
The Ministry of Home Affairs has been supplementing resources of states under the Modernisation of Police Forces (MPF) scheme.[2] The Union Cabinet last week approved the implementation of an umbrella scheme of MPF and has allocated funding of Rs 25,060 crore for the 2017-18 to 2019-20 period.[3] In light of this decision, we present the key features of the scheme and examine other issues related to the police forces.
Modernisation of Police Forces scheme
The MPF scheme was initiated in 1969-70 and has undergone several revisions over the years.2 It was allocated Rs 11,946 crore for the period between 2012-13 to 2016-17, which has now been doubled after last week’s Cabinet approval.[4] Funds from the MPF scheme are typically used for improving police infrastructure through construction of police stations and provision of modern weaponry, surveillance and communication equipment. Upgradation of training infrastructure, police housing and computerisation are also important objectives funded through the scheme.
Following the recommendations of the Fourteenth Finance Commission, to increase the share of central taxes to states, it was decided that the MPF scheme would be delinked from central funding from 2015-16 onwards.[5] States were expected to finance the scheme using their own resources. However, of the recent allocation made by the Cabinet, Rs 18,636 crore will come from the central government and Rs 6,424 crore will come from the states.3 This implies that the centre will fund almost 75% of the scheme.
Underutilisation of Funds
Data from the Bureau of Police Research and Development (BPR&D) shows that funds have not been fully utilised under the MPF scheme. In the year 2015-16, out of a total grant of Rs 9,203 crore that was made available for modernisation, states utilised only Rs 1330 crore (14%).[6]
Figure 2 shows the trend in underutilisation of modernisation funds from 2009-10 to 2015-16. Over this period, there has been a consistent underutilisation of funds by states. On average, states spent 55% of the funds allocated to them, with the highest being 86% utilisation in 2013-14.
Figure 2: Utilisation of funds for modernisation by states (%)
Issues related to police forces
While the MPF scheme seeks to improve police infrastructure, there are a number of structural issues that have been raised by experts over the years related to police forces. We discuss a few of these below.
(i) Overburdened police force
Apart from the core function of maintaining law and order, police personnel carry out various other functions such as traffic management, disaster rescue and removal of encroachments. The Second Administrative Reforms Commission (2007) has noted that these extra obligations lead to overburdening of the police force. It recommended that these functions should be carried out by other government departments or private agencies.[7] Note that as of January 2016, 24 per cent of sanctioned police posts in India were vacant.6 This indicates that police personnel may be overburdened, which may have negative consequences on their efficiency and performance.
(ii) Poor quality of investigation
In 2015, the conviction rate for crimes recorded under the Indian Penal Code, 1860 was only 47%.[9] The Law Commission (2012) observed that one of the reasons for low conviction rates in India is poor quality of investigation by police.[8] The police lack training and expertise required to conduct professional investigations. They also have insufficient legal knowledge and inadequate forensic and cyber infrastructure. In light of these deficiencies, the Second Administrative Reforms Commission (2007) recommended that states should have specialised investigation units within the police force for better investigation of crimes.7
(iii) Police accountability
In India, control over the police force vests with the political executive.[10] The Second Administrative Reforms Commission (2007) noted that this has to led to abuse of police personnel and interference with their decision-making authority.7 To allow the police operational autonomy while maintaining accountability, the Supreme Court issued guidelines to the central government and state governments (and Union Territories) in the year 2006.[11]
The guidelines provided for the establishment of three institutions: (i) a State Security Commission, (ii) a Police Establishment Board, and (iii) a Police Complaints Authority.11 The Supreme Court also stated that the state Director General of Police (DGP) should be selected from three senior-most officers of the state empanelled by the Union Public Service Commission and must have a minimum two-year tenure.
In addition, the court recommended that officers in key positions in the field (Inspector General in charge of Range, Station House Officer) must be given a two-year tenure. Currently, DGPs and senior officers are selected by the political executive of the state and are not guaranteed security of tenure.[10] In order to improve the quality of investigation, the Court recommended that investigating police must be separated from law and order police.11
These guidelines and recommendations of other expert bodies were used to create the draft Model Police Bill, 2015 by BPR&D, which states have been encouraged to adopt. While states have partially implemented some of these guidelines, no state has adhered to them in full.[12] In most states, the three institutions which the Supreme Court has directed states to create have not been given the authority they need to ensure accountability and insulate the police force from political misuse.12
[1]Entry 1 and 2, List II, Schedule 7, Constitution of India, 1950.
[2] Modernisation of Police Force Scheme Book, Ministry of Home Affairs, 2010 http://mha.nic.in/sites/upload_files/mha/files/Scheme-MPF-11Nov.pdf.
[3] “Cabinet approves umbrella scheme of Modernisation of Police Forces”, Press Information Bureau, 27th September 2017.
[4] Annual Report, Ministry of Home Affairs, 2015-16, http://mha.nic.in/sites/upload_files/mha/files/AR(E)1516.pdf.
[5] “Major Programmes Under Central Assistance for State Plans”, Union Budget, 2015-16 http://indiabudget.nic.in/budget2015-2016/ub2015-16/bag/bag8.pdf.
[6] “Data on Police Organisations”, Bureau of Police Research and Development, 2016, http://bprd.nic.in/WriteReadData/userfiles/file/201701090303068737739DATABOOK2016FINALSMALL09-01-2017.pdf.
[7] “Public Order”, Second Administrative Reforms Commission, 2007, http://arc.gov.in/5th%20REPORT.pdf.
[8] “Report No. 239: Expeditious Investigation and Trial of Criminal Cases Against Influential Public Personalities”, Law Commission of India, March 2012, http://lawcommissionofindia.nic.in/reports/report239.pdf.
[9] “Crime in India”, National Crime Records Bureau, 2006-15 http://ncrb.nic.in/StatPublications/CII/CII2015/FILES/Compendium-15.11.16.pdf.
[10] Section 3, Police Act, 1861.
[11] Prakash Singh vs Union of India, Supreme Court, Writ Petition (Civil) No. 310 of 1996, November 8, 2010.
[12] “Building Smart Police in India: Background into the needed Police Force Reforms”, Niti Aayog, 2016, http://niti.gov.in/writereaddata/files/document_publication/Strengthening-Police-Force.pdf.
