A farmer grows the crop, but getting a fair price for it depends on where and how it is sold. This process of moving farm produce from the field to the buyer is called agricultural marketing. In India it has been run mainly through APMC mandis. In recent years, the government has added the online e-NAM platform and other reforms. Exams ask about APMC Acts, e-NAM, model Acts and related bodies. This post explains them in simple words. It ends with 15 previous year questions.
Key Points (Quick Revision)
- Agricultural markets are a State subject, so each State has its own APMC Act.
- APMC stands for Agricultural Produce Market Committee.
- e-NAM, the National Agriculture Market, was launched on 14 April 2016.
- e-NAM is run by the Small Farmers' Agribusiness Consortium (SFAC) under the Ministry of Agriculture.
- The Centre has released model Acts in 2003 and 2017 for States to reform their markets.
1. What is agricultural marketing?
Agricultural marketing covers every step after harvest - grading, storage, transport, selling and payment. Good marketing means:
- The farmer gets a fair price.
- The buyer gets produce of known quality.
- There are fewer middlemen taking a share.
Under the Constitution, agriculture (Entry 14) and markets and fairs (Entry 28) are in the State List. That is why market laws are made by States.
2. The APMC system
Before independence, farmers often sold to moneylenders and traders at low prices. The Royal Commission on Agriculture (1928) suggested regulated markets. After independence, States passed APMC Acts, mostly from the 1960s.
Under these Acts:
- The State is divided into market areas, each with an Agricultural Produce Market Committee.
- Notified produce must be sold in the regulated market yard (mandi) through open auction.
- Traders and commission agents (arhtiyas) need a licence from the APMC.
- The APMC collects a market fee on sales.
3. Problems with the old system
- Too few mandis - many farmers live far from a regulated market.
- Licence limits - a small group of licensed traders could control prices.
- High charges - market fees, commission and other levies cut the farmer's share.
- Fragmented markets - a licence was valid only in one market area, so trade across mandis and States was hard.
4. Model Acts for reform
| Model Act | Year | Main ideas |
|---|---|---|
| Model APMC Act | 2003 | Private markets, direct buying from farmers, contract farming, farmer-consumer markets |
| Model APLM Act (Agricultural Produce and Livestock Marketing) | 2017 | The whole State as one market area, a single trading licence, a cap on market fees, e-trading, livestock included |
| Model Contract Farming Act | 2018 | Agreements between farmers and buyers before sowing, with farmer protection |
These are only model laws. Each State decides how much of them to adopt.
5. e-NAM - the National Agriculture Market
e-NAM was launched on 14 April 2016. It is an online trading portal that links APMC mandis across India.
- It is run by the Small Farmers' Agribusiness Consortium (SFAC) under the Ministry of Agriculture and Farmers Welfare.
- Farmers can see prices and sell through online bidding by traders, including from other mandis.
- Produce is assayed (quality-tested) so that buyers far away can trust it.
- Payment can go directly to the farmer's bank account.
Over a thousand mandis have been linked to e-NAM, and Farmer Producer Organisations (FPOs) and warehouses can also trade on it. The number keeps growing, so use the latest figure.
6. Other supporting bodies and schemes
- AGMARK - a quality mark for farm produce under the Agricultural Produce (Grading and Marking) Act, 1937, given by the Directorate of Marketing and Inspection.
- WDRA - the Warehousing Development and Regulatory Authority, under the Warehousing Act, 2007, regulates warehouses and electronic warehouse receipts, which farmers can use to get loans.
- GrAMs - a plan announced in the 2018 Budget to upgrade rural haats into Gramin Agricultural Markets.
- FPOs - a central scheme of 2020 to form and promote 10,000 Farmer Producer Organisations, so small farmers can sell together.
- Operation Greens - started in 2018 for tomato, onion and potato to reduce price swings, later widened to more fruits and vegetables.
7. The farm laws of 2020
In 2020, Parliament passed three farm laws to allow trade outside APMC mandis, contract farming and changes to stock limits. After long protests by farmers, the laws were repealed in 2021. Marketing reform has since continued mainly through States, e-NAM and FPOs.
8. Previous year questions
- What does APMC stand for? – Agricultural Produce Market Committee
- Agricultural markets are a subject of which list? – State List
- When was e-NAM launched? – 14 April 2016
- Which body runs e-NAM? – Small Farmers' Agribusiness Consortium (SFAC)
- Which ministry is e-NAM under? – Ministry of Agriculture and Farmers Welfare
- In which year was the Model APMC Act released? – 2003
- In which year was the Model APLM Act released? – 2017
- Which commission of 1928 suggested regulated markets? – Royal Commission on Agriculture
- AGMARK is given under which Act? – Agricultural Produce (Grading and Marking) Act, 1937
- Which body regulates warehouses and electronic warehouse receipts? – WDRA
- Under which Act was WDRA set up? – Warehousing Act, 2007
- What does GrAMs stand for? – Gramin Agricultural Markets
- How many FPOs does the 2020 central scheme aim to form? – 10,000
- Operation Greens first covered which crops? – Tomato, onion and potato
- In which year were the three farm laws repealed? – 2021
9. How to revise this topic
Start with the basics: markets are a State subject, APMC Acts from the 1960s, Royal Commission on Agriculture 1928.
Next, learn the model Acts: APMC 2003, APLM 2017, Contract Farming 2018.
Then fix e-NAM: 14 April 2016, SFAC, Ministry of Agriculture, online bidding and assaying.
Finally, remember the supporting tools: AGMARK 1937, WDRA 2007, GrAMs 2018, 10,000 FPOs 2020, Operation Greens 2018, farm laws 2020 repealed in 2021.
10. Frequently Asked Questions
What is an APMC?
An APMC is an Agricultural Produce Market Committee set up under a State's APMC Act. It runs regulated market yards, licenses traders and collects market fees.
What is e-NAM?
e-NAM is the National Agriculture Market, an online trading portal launched on 14 April 2016 that links APMC mandis across India. It is run by the Small Farmers' Agribusiness Consortium.
Why are market laws made by States?
Under the Constitution, agriculture and markets and fairs are in the State List, so each State makes its own agricultural marketing law.
What is the Model APLM Act, 2017?
It is a model law released by the Centre in 2017. It suggests treating the whole State as one market area, a single trading licence, a cap on market fees, e-trading and the inclusion of livestock.
What happened to the farm laws of 2020?
Parliament passed three farm laws in 2020 to change agricultural marketing. After long farmer protests, the laws were repealed in 2021.
For more Economy topics in simple language, see our MSP, PDS and NFSA, Agriculture and the Indian Economy and Green Revolution posts, or browse the Economy section. Preparing for a bank exam? Start with the NABARD Grade A guide or join the 100 Hour GS Course.