Noting the three newly passed farm laws and to make farm yards under APMCs more competitive, the Centre asks states to waive market fees on the e-NAM platform.
Market Fees on e-NAM Platform
The Agriculture Ministry has asked states to waive trade fees for the National Agriculture Market platform to make the trade in market yards of APMCs more competitive. Noting the three recently passed farm laws, it said that there should be no fees for trading on this platform after the new rules. However, the market fee is being charged since the platform’s inception. The Centre has been asking states to reduce the Mandi tax to 0.5%.
Reduction in Market Fee Following the Enactment of New Farm Laws
Most of the states levy Mandi fees within the range of 1 to 2% except for Punjab, which charges 6% market fee. Haryana reduced this fee to 1% from 4% after Centre laws came into force. Besides, Rajasthan slashed it to 2% from 3%. Moreover, it transfers 0.25% of market fee benefits to farmers for trading on the e-NAM platform. Launched in 2016, the e-NAM platform facilitates online trading of agricultural commodities across states. Till now, 1,000 Mandis across 18 states and three Union Territories have joined this platform. Subsequently, its trade turnover went up by 74% to Rs 30,845 crore during FY20.
Farmer Producers Organizations as Alternatives to APMCs
Several FPOs in Maharashtra are entering into deals with large private players. Moreover, they are offering better prices to attract more farmers. Consequently, APMCs of Maharashtra witnessed a loss of 25-30% between June and August this year as compared to last year. Similarly, Uttar Pradesh saw a decline of 36% in profits during June-July as against the same period the previous year. Mandi arrivals of seven out of 10 major Kharif crops namely paddy (common), jowar, bajra, maize, arhar, moong, urad, soybean, groundnut, and cotton have fallen during October this year.
In all, with the implementation of new farm laws, trade through APMCs of Kharif crops has registered a decline.