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                 Agricultural Markets......


  • 67% of the people of our country depend on agriculture for their livelihood. However, agricultural markets have not been able to give the farmers the best chance to get a fair market price in an open process. In states like Punjab and Haryana, there are relatively well-developed markets. The result is a much higher level of productivity and prosperity in agriculture.

  • Though Andhra Pradesh is a predominantly agricultural State, our agricultural markets are poorly developed. Most farmers do not have direct access to markets. They have to depend on local village traders who are their only source of market information, apart from being the only buyers of their products. The many confusing and complicated control orders and movement and trading restrictions on agricultural products make the situation even more difficult.

  • In Telengana area, agricultural marketing has been traditionally better organised. Many markets have been functioning for a long time with some degree of effectiveness. In coastal Andhra and Rayalaseema districts the market yards are in a deplorable condition. Often the licensed commission agents who are supposed to help the farmer get the best price by selling at a time and a place most advantageous to him, are themselves the buyers in Andhra area. Obviously, the commission agent gets the best price for himself at the cost of the farmer.

No role for stake-holders:

  • Since 1966 a law has been in operation in Andhra Pradesh integrating the earlier laws. There are 834 regulated markets in the state managed by 282 Agricultural Market Committees (AMCs).

  • The law is totally undemocratic and does not give the real stake-holders — the farmers — any say in the management of the markets. Each AMC has 14- 18 members nominated by the government as follows:

  • 8 farmers nominated by government

  • 2 traders nominated by government

  • One person from cooperatives nominated by government

  • Head of the local body

  • 2 officials

  • The term of office is 3 years, and may be extended by government for one more year

  • Of the members, government shall appoint one as chairman and another as vice chairman.

  • As cab be see, the AMC is a creation of government and all nominations have become acts of political patronage to loyal party men. There is no election from among stake-holders, and farmers have no voice deciding how to run a market which deals with what they have produced.

Market Fee:

  • Whenever a farmer sells any of his produce — farm produce or livestock— 2% of the sale price shall be paid as market fee. The farmer must pay this fee whether or not the sale took place in the market yard. Even if the sale is in his own village, he still has to pay the fee, provided it is a notified produce.

  • The fee is to be paid as follows:

  • By the purchaser

  • If the purchaser cannot be identified, then the seller shall pay it.

  • All produce taken out of notified market area is deemed to have been sold and fee shall be paid.

  • The fee is payable for only one transaction and not on subsequent ones in the same market area

  • Seller has the duty to identify the buyer or pay the fee himself

  • A licensed commission agent is authorised to collect fee from a purchaser and remit it to the AMC

  • If fee is paid on the AMC area, and later sold in another AMC area, the fee shall be paid again in the second area and so on.

  • On tobacco no fee is livable ever since Tobacco Board came into existence.

  • As can been seen, the AMCs, nominated by the government, and not elected by the farmers, have the powers to levy a market fee. The fee has to be paid whether or not the facilities of the market are used by the farmers.

  • According to law, market fee shall be utilized only for establishment, development and improvement of the market and for purposes related to helping the farmers. However over the years, since there is no role for farmers in the management of their own markets, the market fee has often not been utilized for the benefit of farmers.

  • The following are some of the collections of market fee and expenditure in Andhra Pradesh. The figures given are those presented by the government.

Year         Income in       Expenditure in                      Rs.crores                Rs.crores

1994-95            121.77                     83.25

1995-96            153.50                   104.08

1996-97            153.03                   107.02

  • Cumulative unspent amounts lying with the government so far are as follows:

  • Year            Amount (Rs.Crores)

1994-95                  243.47

1995-95                  288.74

1996-95                  322.07

  • These amounts are kept under government control in the state treasury. Therefore, the interest on these amounts is not taken into account. If we make allowance for interest, market fee unspent and lying at the disposal of the government treasury would be about Rs.1000 crores.

  • Since farmers are not involved, even in instances where the amount is spent, it is often spent in a wasteful manner or is misused.

  • The following are some of the date on AMCs.

  • No. of AMCs :282

  • No. of Markets : 834

  • No. of licensed traders :50,000(A,B,C & D categories)

  • No. of Markets under : 70 Officials directly

  • No. under nominated management : 212

  • Market fee payable :2%

  • Commission payable on perishable commodities : 4%

  • Commission on other products :2%


  • If any person defaults on payment of market fee, or violates the conditions for trading licence, he has to pay a fine of Rs.5000 and an additional fine of Rs.500 per day of continuing contravention and also sentenced to imprisonment of 3 months. The AMC can drop action against defaulters if the fee is paid with a penalty

  • The prevailing situation amply shows that the present law has not improved the markets or made marketing of agricultural products any better. In fact, the conditions in many market yards are deplorable. In case of vegetable and fruit market yards are deplorable. In case of vegetable and fruit markets, for instance, both farmers and consumers feel cheated. The infrastructure is deplorable and there is neither proper storage nor decent roads for transport. And yet monies which should have gone to farmers if they are not collected as market fee lie unspent. Farmers continue to suffer extortion and receive payment well below market price.

  • You as farmer should assert your rights collectively and work for your role in running your markets. Under the present law, you should ensure that the nominated AMCs and officials actually use the funds for farmers' advantage. You should insist on transparency and full knowledge of fee received, names and details of licenced traders operating, commission agents etc.,

  • You should insist on a fair law giving you — the true stake-holder in the market — a real role in the management of the market, as long as a remote government at the state level has all the power and no responsibility or stakes, markets will continue to languish and suffer. You have a duty to yourself and you should work for true empowerment and genuine democracy. People who have no interest in the future of your market yard, or have no stakes in the price you may or may not get, should have no role in deciding how to run your market with the fee collected from you.

  • You should organize as stake-holders with other farmers and work for a law which gives you the full responsibility and adequate authority to run your market yard. If you need any information and help, please contact Lok Satta for guidance and support.

"Give me liberty to know, to utter and to argue freely according to conscience, above all liberties".

John Milton

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