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.
Earlier this month, guidelines for the Swachh Bharat Mission (Gramin) were released by the Ministry of Drinking Water and Sanitation. Key features of the Swachh Bharat Mission (Gramin), as outlined in the guidelines, are detailed below. In addition, a brief overview of sanitation levels in the country is provided, along with major schemes of the central government to improve rural sanitation. The Swachh Bharat Mission, launched in October 2014, consists of two sub-missions – the Swachh Bharat Mission (Gramin) (SBM-G), which will be implemented in rural areas, and the Swachh Bharat Mission (Urban), which will be implemented in urban areas. SBM-G seeks to eliminate open defecation in rural areas by 2019 through improving access to sanitation. It also seeks to generate awareness to motivate communities to adopt sustainable sanitation practices, and encourage the use of appropriate technologies for sanitation. I. Context Data from the last three Census’, in Table 1, shows that while there has been some improvement in the number of households with toilets; this number remains low in the country, especially in rural areas. Table 1: Percentage of households with toilets (national)
| Year | Rural | Urban | Total |
| 1991 | 9% | 64% | 24% |
| 2001 | 22% | 74% | 36% |
| 2011 | 31% | 81% | 47% |
In addition, there is significant variation across states in terms of availability of household toilets in rural areas, as shown in Table 2. Table 2 also shows the change in percentage of rural households with toilets from 2001 to 2011. It is evident that the pace of this change has varied across states over the decade. Table 2: Percentage of rural households with toilets
| State |
2001 |
2011 |
% Change |
| Andhra Pradesh |
18 |
32 |
14 |
| Arunachal Pradesh |
47 |
53 |
5 |
| Assam |
60 |
60 |
0 |
| Bihar |
14 |
18 |
4 |
| Chhattisgarh |
5 |
15 |
9 |
| Goa |
48 |
71 |
23 |
| Gujarat |
22 |
33 |
11 |
| Haryana |
29 |
56 |
27 |
| Himachal Pradesh |
28 |
67 |
39 |
| Jammu and Kashmir |
42 |
39 |
-3 |
| Jharkhand |
7 |
8 |
1 |
| Karnataka |
17 |
28 |
11 |
| Kerala |
81 |
93 |
12 |
| Madhya Pradesh |
9 |
13 |
4 |
| Maharashtra |
18 |
38 |
20 |
| Manipur |
78 |
86 |
9 |
| Meghalaya |
40 |
54 |
14 |
| Mizoram |
80 |
85 |
5 |
| Nagaland |
65 |
69 |
5 |
| Odisha |
8 |
14 |
6 |
| Punjab |
41 |
70 |
30 |
| Rajasthan |
15 |
20 |
5 |
| Sikkim |
59 |
84 |
25 |
| Tamil Nadu |
14 |
23 |
9 |
| Tripura |
78 |
82 |
4 |
| Uttar Pradesh |
19 |
22 |
3 |
| Uttarakhand |
32 |
54 |
23 |
| West Bengal |
27 |
47 |
20 |
| All India |
22 |
31 |
9 |
II. Major schemes of the central government to improve rural sanitation The central government has been implementing schemes to improve access to sanitation in rural areas from the Ist Five Year Plan (1951-56) onwards. Major schemes of the central government dealing with rural sanitation are outlined below.
| Central Rural Sanitation Programme (1986): The Central Rural Sanitation Programme was one of the first schemes of the central government which focussed solely on rural sanitation. The programme sought to construct household toilets, construct sanitary complexes for women, establish sanitary marts, and ensure solid and liquid waste management. |
| Total Sanitation Campaign (1999): The Total Sanitation Campaign was launched in 1999 with a greater focus on Information, Education and Communication (IEC) activities in order to make the creation of sanitation facilities demand driven rather than supply driven. Key components of the Total Sanitation Campaign included: (i) financial assistance to rural families below the poverty line for the construction of household toilets, (ii) construction of community sanitary complexes, (iii) construction of toilets in government schools and aganwadis, (iv) funds for IEC activities, (v) assistance to rural sanitary marts, and (vi) solid and liquid waste management. |
| Nirmal Bharat Abhiyan (2012): In 2012, the Total Sanitation Campaign was replaced by the Nirmal Bharat Abhiyan (NBA), which also focused on the previous elements. According to the Ministry of Drinking Water and Sanitation, the key shifts in NBA were: (i) a greater focus on coverage for the whole community instead of a focus on individual houses, (ii) the inclusion of certain households which were above the poverty line, and (iii) more funds for IEC activities, with 15% of funds at the district level earmarked for IEC. |
| Swachh Bharat Mission (Gramin) (2014): Earlier this year, in October, NBA was replaced by Swachh Bharat Mission (Gramin) (SBM-G) which is a sub-mission under Swachh Bharat Mission. SBM-G also includes the key components of the earlier sanitation schemes such as the funding for the construction of individual household toilets, construction of community sanitary complexes, waste management, and IEC. Key features of SBM-G, and major departures from earlier sanitation schemes, are outlined in the next section. |
III. Guidelines for Swachh Bharat Mission (Gramin) The guidelines for SBM-G, released earlier this month, outline the strategy to be adopted for its implementation, funding, and monitoring. Objectives: Key objectives of SBM-G include: (i) improving the quality of life in rural areas through promoting cleanliness and eliminating open defecation by 2019, (ii) motivating communities and panchayati raj institutions to adopt sustainable sanitation practices, (iii) encouraging appropriate technologies for sustainable sanitation, and (iv) developing community managed solid and liquid waste management systems. Institutional framework: While NBA had a four tier implementation mechanism at the state, district, village, and block level, an additional tier has been added for SBM-G, at the national level. Thus, the implementation mechanisms at the five levels will consist of: (i) National Swachh Bharat Mission (Gramin), (ii) State Swachh Bharat Mission (Gramin), (iii) District Swachh Bharat Mission (Gramin), (iv) Block Programme Management Unit, and (v) Gram Panchayat/Village and Water Sanitation Committee. At the Gram Panchayat level, Swachhta Doots may be hired to assist with activities such as identification of beneficiaries, IEC, and maintenance of records. Planning: As was done under NBA, each state must prepare an Annual State Implementation Plan. Gram Panchayats must prepare implementation plans, which will be consolidated into Block Implementation Plans. These Block Implementation Plans will further be consolidated into District Implementation Plans. Finally, District Implementation Plans will be consolidated in a State Implementation Plan by the State Swachh Bharat Mission (Gramin). A Plan Approval Committee in Ministry of Drinking Water and Sanitation will review the State Implementation Plans. The final State Implementation Plan will be prepared by states based on the allocation of funds, and then approved by National Scheme Sanctioning Committee of the Ministry. Funding: Funding for SBM-G will be through budgetary allocations of the central and state governments, the Swachh Bharat Kosh, and multilateral agencies. The Swachh Bharat Kosh has been established to collect funds from non-governmental sources. Table 3, below, details the fund sharing pattern for SBM-G between the central and state government, as provided for in the SBM-G guidelines. Table 3: Funding for SBM-G across components
| Component | Centre | State | Beneficiary | Amount as a % of SBM-G outlay |
| IEC, start-up activities, etc | 75% | 25% | - | 8% |
| Revolving fund | 80% | 20% | - | Up to 5% |
| Construction of household toilets | 75%(Rs 9000)90% for J&K, NE states, special category states | 25%(Rs 3000)10% for J&K, NE states, special category states | -- | Amount required for full coverage |
| Community sanitary complexes | 60% | 30% | 10% | Amount required for full coverage |
| Solid/Liquid Waste Management | 75% | 25% | - | Amount required within limits permitted |
| Administrative charges | 75% | 25% | - | Up to 2% of the project cost |
One of the changes from NBA, in terms of funding, is that funds for IEC will be up to 8% of the total outlay under SBM-G, as opposed to up to 15% (calculated at the district level) under NBA. Secondly, the amount provided for the construction of household toilets has increased from Rs 10,000 to Rs 12,000. Thirdly, while earlier funding for household toilets was partly through NBA and partly though the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the provision for MGNREGS funding has been done away with under SBM-G. This implies that the central government’s share will be met entirely through SBM-G. Implementation: The key components of the implementation of SBM-G will include: (i) start up activities including preparation of state plans, (ii) IEC activities, (iii) capacity building of functionaries, (iv) construction of household toilets, (v) construction of community sanitary complexes, (vi) a revolving fund at the district level to assist Self Help Groups and others in providing cheap finance to their members (vii) funds for rural sanitary marts, where materials for the construction of toilets, etc., may be purchased, and (viii) funds for solid and liquid waste management. Under SBM-G, construction of toilets in government schools and aganwadis will be done by the Ministry of Human Resource Development and Ministry of Women and Child Development, respectively. Previously, the Ministry of Drinking Water and Sanitation was responsible for this. Monitoring: Swachh Bharat Missions (Gramin) at the national, state, and district levels will each have monitoring units. Annual monitoring will be done at the national level by third party independent agencies. In addition, concurrent monitoring will be done, ideally at the community level, through the use of Information and Communications Technology. More information on SBM-G is available in the SBM-G guidelines, here.
