Day 30 – Q 3. What are the main features of the ordinance related to APMCs, recently announced by the Government? How will it help the farmers? Discuss. 

  • IASbaba
  • July 14, 2020
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Agriculture, GS 3, TLP-UPSC Mains Answer Writing
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3. What are the main features of the ordinance related to APMCs, recently announced by the Government? How will it help the farmers? Discuss. 

हाल ही में सरकार द्वारा घोषित एपीएमसी से संबंधित अध्यादेश की मुख्य विशेषताएं क्या हैं? यह किसानों की मदद कैसे करेगा? चर्चा करें।

Demand of the question:

It expects students to write about the main features of the ordinances related to APMC’s along with discussing its benefits and drawbacks for the farmer.


In order to revive the Indian economy, the Central government has announced the Atmanirbhar Bharat Abhiyan. Agricultural reforms are part of the third tranche of the economic package announced under Atma nirbhar Bharat Abhiyan which may yield better income for farmer in coming days.


Government of India Intends to reform the marketing and regulation related to APMCs in agriculture field through following two  ordinances:

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020: (FPTC)

  • It seeks to provide for barrier-free trade of farmers’ produce outside the markets notified under the various state agricultural produce market laws (state APMC Acts).  The Ordinance will prevail over state APMC Acts.
  • Trade of farmers’ produce: The Ordinance allows intra-state and inter-state trade of farmers’ produce outside the physical premises of markets or deemed markets notified under various State agricultural produce market legislations.
  • Besides, the Ordinance will provide a facilitative framework for electronic trading and matters connected therewith or incidental thereto.
  • A farmer is defined as a person engaged in the production of farmers’ produce by self or by hired labour.
  • No fees to be levied by states: The Ordinance prohibits state governments from levying any market fee, cess or levy on farmers, traders, and electronic trading platforms for any trade under the Ordinance.
  • Dispute resolution mechanism is explicitly structured out for efficient dispute resolution.
  • The central government may prescribe modalities for such platforms procedure, norms, and manner of registration, code of conduct, quality assessments, and modes of payment.

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020:

  • It provides a framework for the protection and empowerment of farmers with reference to the sale and purchase of farm products.  The provisions of the Ordinance will override all state APMC laws.
  • Farming agreement: The Ordinance provides for a farming agreement prior to the production or rearing of any farm produce, aimed at facilitating farmers in selling farm produces to sponsors.
  • It also specifies the Duration of agreement.
  • Pricing of farming produce: The price to be paid for the purchase of a farming produce will be mentioned in the agreement.  
  • Delivery and payment: The Ordinance specifies that the sponsor will be responsible for all preparations for the timely acceptance of deliveries and will take deliveries within the agreed time.  
  • Dispute Settlement: The Ordinance requires a farming agreement to provide for a conciliation board as well as a conciliation process for settlement of disputes.

Benefit for farmer:

  • The freedom to produce, hold, move, distribute and supply will lead to harnessing economies of scale and attract private sector/foreign direct investment into the agriculture sector.
  •  It will help drive up investment in cold storages and modernization of the food supply chain.
  •  An amendment to FPTC will create an ecosystem where the farmers and traders would enjoy freedom of choice of sale and purchase of agri-produce.
  • It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State agricultural produce marketing legislations.
  • It empowers farmers for engaging with processors, wholesalers, aggregators, large retailers, exporters etc. and thus eliminating intermediaries resulting in full realization of price.
  • Farmers have been provided adequate protection. Sale, lease or mortgage of farmers’ land is totally prohibited and farmers’ land is also protected against any recovery.
  • It also provides an effective dispute resolution mechanism with clear timelines for redress. Hence, farmer will not hesitate to take risk.

Though these kind of reforms will liberate the farmer from limited choices provided by state specific APMC regulation. There are some pitfalls too as pointed out by some experts:

  • Rather than replicating Punjab’s successful agriculture mandi model, now states will lose vital revenue to even upgrade and repair rural infrastructure. 
  • When farmers sell agricultural produce outside of APMC market yards, they cannot legally be charged commission on the sale of farm produce. To survive, the APMCs across the nation will have to radically standardise and rationalise their mandi fee structure and limit the commission charged by traders on sale of farmers’ produce.
  • The move seems to promote free trade under the slogan of one nation one market where some small and marginalised farmers need some state backed protection.
  • The peasantry at large will be at the mercy of the Agri Business Corporations since there will not be any arrangements for price support and price stabilisation for crops.


As these  reforms are the most awaited reforms since Independence, they carry big potential to change the Indian agriculture sector by improving the income of farmer, large scale infrastructure investments, dispute resolution mechanism etc. Hence, if implemented in letter and spirit they can open the door of golden age for Indian farmers to promote the Indian farming sector as big farming business.

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