Farm laws: Maharashtra APMCs see 25-30 per cent drop in income

The Agriculture Produce Market Committees (APMCs) of Maharashtra have witnessed the loss of 25-30% in their incomes between June and August this year as compared to their earnings for the same period a year ago. The loss is attributed to the three ordinances related to agricultural marketing reform promulgated by the Centre in June, which have been passed as laws by the Parliament in September.

Vashi alone has reported a 37.83% drop in its income between June and August 2020 and a 62.3% drop in market arrivals. Since there is no market cess charged for business done outside the mandis, the APMCs have slowly begun to lose business to outsiders.

The Maharashtra government has been encouraging alternate markets that have emerged as an attractive option for farmers.

Satish Soni, director, Marketing, Maharashtra, told FE that private markets and direct marketing licence holders have taken up nearly 10% of the total APMC business in the state.

Maharashtra has around 305 APMCs and 598 sub committees which report an annual turnover of Rs 45,681 crore. Fruits and vegetables alone accounts for Rs 20,000 crore. Foodgrains, pulses and oilseeds account for another Rs 20,000 crore, while spices, raisins, bamboo and other local produce account for the remaining Rs 10,000 crore. The APMCs charged a market cess of 0.8% to 1%.

The total earnings of APMC thrugh cess was Rs 800 crore a year and it is expected to drop to `300 crore a year once the new laws are implemented in the state, senior officials said.

The Vashi APMC, the largest mandi in Maharashtra, collects about Rs 60 crore in cess in a year. In addition to this, the farmers are also charged 2.5% on foodgrains and upto 6% on fruits as commission to the purchaser.

“The Marketing Directorate has issued licences for 60 private markets, 1,200 direct marketing licences (DMLs) and 52 single market licences. The response to these alternate markets has been very encouraging with several applications coming up for renewal and new applications coming in as well,” Soni said.

Of the 1,200 direct marketing licences, around 60% of the licences have been issued to Farmer Producer Companies (FPCs), he said. Private markets also charge a 2% service fee.

During the lockdowns, Farmer Producer Companies (FPCs) accounted for at least 45% of the business in perishables (fruits and vegetables) with these companies delivering agri-commodities in housing societies and doorsteps of consumers.

About 1,200 farmers in Nashik, part of Sahyadri Farms, have established a direct supply chain with 57,000 customers in Mumbai, Pune, and Nashik during the lockdown and have sold vegetables and fruits worth Rs 4 crore in a month. MahaFPC — the apex body of farmer producer companies in Maharashtra has been successful as well. On a daily basis, some 40 tonne are delivered to customers in Pune, Thane and Navi Mumbai and the daily turnover is around Rs 8 lakh.

Greenfield Agro Services, which boasts of over 50 farmers from Nashik district, has developed an app and supplies nearly two tonne vegetables per day to 2,000 customers in Thane.

Nilesh Vira, president of the grain market, Vashi APMC, pointed out that the new ordinances have impacted the grain business to the tune of 60%. “Earlier at least 300 trucks of 10 tonne each would arrive at the Vashi market. Now the arrivals have dropped to 100 trucks. Instead 2 tonne tempos bypass the Vashi market and directly deliver the grains to small traders throughout Mumbai,” he said.

Similarly, vegetable and fruit arrivals have also dropped from 600 odd trucks to 250 odd trucks, he said.

An alternate network is emerging with vendors who do not use their APMC licences and directly deliver to the customer, he said. It is the Direct Marketing Licence (DML) holders who are conducting business although there are no official figures to prove otherwise, Vira maintained.