To Study The Issues And Challenges Of Export Market With ...€¦ · ECGC Export Credit and...

To Study The Issues And Challenges Of Export Market

With Special Reference To Vashi

Agricultural Produce Market Committee Market,

Navi Mumbai

Thesis Submitted to D. Y. Patil University,

School of Business Management

In partial fulfilment of the requirements for the award of the Degree of

MASTER OF PHILOSOPHY

In BUSINESS MANAGEMENT

Submitted by

DEVANG K. NANDOLA

(Enrolment No. DYP-MPhil-1560900002)

Research Guide

Prof. Dr. R. GOPAL

DIRECTOR & HEAD OF DEPARTMENT

D.Y. PATIL UNIVERSITY

SCHOOL OF BUSINESS MANAGEMENT

Sector 4, Plot No. 10,

CBD Belapur, Navi Mumbai – 400 614

February 2017

To Study The Issues And Challenges Of Export Market

With Special Reference To Vashi

Agricultural Produce Market Committee Market,

Navi Mumbai

i

DECLARATION

I hereby declare that the thesis entitled “To Study The Issues And

Challenges Of Export Market With Special Reference To Vashi

Agricultural Produce Market Committee Market, Navi Mumbai” submitted

for the Award of Master of Philosophy in Business Management at D.Y. Patil

University, School of Business Management is my original work and the thesis

has not formed the basis for the award previously of any degree, associate

ship, fellowship or any other similar titles.

The material borrowed from other sources and incorporated in the thesis has

been duly acknowledged.

I understand that myself could be held responsible and accountable for

plagiarism, if any, detected later on.

The research papers published based on the conducted out of and in the

course of the study are based on study and not borrowed from other sources.

Place: Navi Mumbai

Date:

Signature of Signature of Signature of

Guide Head of Dept. Student

ii

CERTIFICATE

This is to certify that the thesis entitled “To Study The Issues And

Challenges Of Export Market With Special Reference To Vashi

Agricultural Produce Market Committee Market, Navi Mumbai” and

submitted by Mr. Devang K. Nandola is a bonafide research work for the

award of the Master of Philosophy in Business Management at D. Y. Patil

University, School of Business Management in partial fulfilment of the

requirements for the award of the Degree of Master of Philosophy in Business

Management and that the thesis has not formed the basis for the award

previously of any degree, diploma, associate ship, fellowship or any other

similar title of any University or Institution.

Also, it is certified that the thesis represents an independent work on the part

of the candidate.

Place: Navi Mumbai

Date:

Signature of Signature of

Head of the Department Guide

iii

ACKNOWLEDGEMENT

I am greatly indebted to D. Y. Patil University, School of Business

Management which has accepted me for the Master Program and provided

me with an excellent opportunity to carry-out the present research work.

I am grateful to my guide, mentor, philosopher Prof. Dr. R. Gopal for having

guided me throughout the research span of time and for providing his

constructive criticism which made me bring out the best in me. I would also

like to thank Sir for being approachable at any point of time without

considering his own precious personal time.

I express my sincere gratitude to the Sachivalay, Vashi APMC Market Traders

and specially my colleagues and ex-colleagues, my family and friends for their

whole-hearted support.

I would like to convey my thanks to everyone who has been influential and

supportive in this research work.

Place: Navi Mumbai

Date: Signature of the Student

iv

TABLE OF CONTENTS

CHAPTER

NO.

PARTICULARS PAGE

NO.

Declaration i

Certificate ii

Acknowledgement iii

Table of Contents iv

List of Tables v - vi

List of Figures vii

List of Abbreviations viii - xi

Executive Summary xii - xiii

1. Introduction To Vashi APMC Market 1 – 22

2. Literature Review & Research Gap 23 – 27

3. Objectives, Scope and Research Methodology 28 – 32

4. Mumbai Agricultural Produce Market

Committee: an overview

33 - 50

5. Maharashtra State Agricultural Marketing

Board: an overview

51 - 82

6. History of APMC Market Mumbai 83 – 92

7. Contribution of APMC to India’s Export

Growth

93 - 102

8. Data Interpretations and Major Findings of the

Research

103 – 117

9. Recommendations and Conclusion

118

10. Annexure

119 - 123

v

LIST OF TABLES

Table

No.

Table Description Page

No.

1. Marketing Details of Arrivals During the year 2013-

2014 to 2015-16 (in M.T.)

17

2. Recovery of Market Fees for the last 5 years 17

3. Supervision Charges paid to the State Government

during last 5 years

18

4. Total land of APMC 18

5. Number of Market Functionaries (For the period of

31st March, 2016)

19

6. Income and Expenditure of APMC for last 5 years

(31st March, 2016)

19

7. Shifting of Wholesale Trade to APMC Complex

VASHI

34

8. Market-Wise Galas & Office Blocks 35

9. ANNUAL DETAILS OF ARRIVALS (Lakh Metric Ton) 35

10. Details of arrival and prices during the year 2013-14

to 2015-16

36

11. Comparative Statement of Market-wise income of

Market fee (Rs. In Lacs)

36

12. Comparative Statement of Income (Rs. In Lacs) 39

13. Comparative Statement of Expenditure (Rs. In Lacs) 41

14. Division wise break-up of APMCs are as follows 53

15. Classification of APMCs (2015-2016) 53

16. Budget of APMC 54

17. Loan to APMC 54

vi

18. Contribution of APMC 56

19. Export Promotion of goods 57

20. Export Facility Centres of APMC 63 - 69

21. List of GLOBALGA certification agencies in India 73

22. KESAR MANGO – GLOBALGAP Certificates

received under Primary Marketing Organization

(PMO) – 10

74

23. Agriculture Export Zones in Maharashtra and

implementing agencies

76

24. Farming Area of Land (MSAMB) 82

25. General Information on Vashi APMC Market, Navi

Mumbai

89

26. Administration of Vashi APMC Market, Navi Mumbai 90

27. Rail/Road Connectivity of Vashi APMC Market, Navi

Mumbai

90

28. Market Area of Vashi APMC Market, Navi Mumbai 90

29. Arrivals / Dispatches of Vashi APMC Market, Navi

Mumbai

91

30. Market Functionaries of Vashi APMC Market, Navi

Mumbai

92

31. Transactional Methods of Vashi APMC Market, Navi

Mumbai

92

32. Storage Area of Vashi APMC Market, Navi Mumbai 92

33. Facilities and Services of Vashi APMC Market, Navi

Mumbai

92

34. Market Charges of Vashi APMC Market, Navi Mumbai 92

35. Financial Position of Vashi APMC Market, Navi

Mumbai

92

vii

LIST OF FIGUERS

Sr.

No.

Figure Description Page

No.

1. Comparative Statement of Market-wise income of

Market fee

(Rs. In Lacs):

37

2. Statement of supervision cost recovered and paid by

MAPMC to state Government of Maharashtra. (Rs. In

Lacs)

38

3. Statement of supervision cost recovered and paid by

MAPMC to state Government of Maharashtra. (Rs. In

Lacs)

40

4. Expenditure 2015-16 41

5. National Agriculture Market, Targets and Reality 42

6. Agricultural Markets in India 42

7. Shortcomings in current APMC system at a glance 44

8. Current model of distribution network for APMC –

Vashi

47

9. Proposed model of distribution network for APMC -

Vashi

47

10. Comparison of APMC Karnataka model to that of our

suggested model at APMC Vashi

49

11. Detail supply chain of tomatoes of 20 farmers under

consideration

50

12. Requirements for proposed supply chain 50

13. Data Interpretations and Major Findings of the

Research

103 –

117

viii

LIST OF ABBREVIATIONS

Abbreviation

Full Form

AEZ AGRI EXPORT ZONE

APEDA Agriculture and Processed Food Export Development

Authority

APMC Agricultural Produce Market Committee

A W B Air Waybill

BRC Bank Realization Certificate

CA Controlled Atmosphere

CAH/D.D. Cash/ Demand Draft

CHAs Customs House Agents

CIDCO City and Industrial Development Corporation

CSR Corporate Social Responsibility

DCA Debt Collection Agency

ECGC Export Credit and Guarantee Corporation

EU European Union

EUREP Euro-Retailer Produce Working Group

ix

F O B Free on Board

FICCI The Federation of Indian Chambers of Commerce and

Industry

GAP Good Agricultural Practices

GMO Genetically Modified Organisms

GMP Good Manufacturing Practices

GOI Government of India

GST Goods & Services Tax

GR WT Gross Weight

HACCP Hazard Analysis Critical Control Points

HIV / AIDS Human Immuno Deficiency Virus/ Acquired Immune

Deficiency Syndrome

ICS

International Certification Services

IEC Import - Export Code

IFAD International Fund for Agricultural Development

IMO

In My Opinion

ITPO Indian Trade Promotion Organisation

JDGFT Joint Director General of Foreign Trade

x

L/C Letter of Credit

MA Modified Atmosphere

MCCI&A Mahratta Chamber of Commerce, Industries and

Agriculture

MMRDA Mumbai Metropolitan Region Development Authority

MNCs Multi-National Corporate

MSAMB Mumbai Agricultural Produce Market Committee

MSEB Maharashtra State Electricity Board

MT Metric Ton

NAM National Agricultural Market

NCDEX National Commodity & Derivatives Exchange Limited

NORAD North American Aerospace Defence Command

NT WT Net Weight

OBC Other Backward Classes

REMS Rashtriya e- Market Services Limited

R.C.C Renal Cell Carcinoma

RTGS

Real Time Gross Settlement

xi

SHGs Self-help groups

SC Schedule caste

SGS

SociétéGénérale de Surveillance

SME/MSME Micro, Small Medium Enterprises

SPS Sanitary and phyto-sanitary

SPSS Statistical Package for the Social Sciences

ST Scheduled Tribes

TBT Technical Barriers to Trade

TUV Tuvalu

UAE United Arab Emirates

USA United States of America

VHT Vapour Heat treatment

WTO World Trade Organization

xii

EXECUTIVE SUMMARY

APMC market is widely divided into 2 business, large scale and small-scale

business. Many of the people are aware about small-scale business but few

of them are aware about the issues and challenges faced by SME & MSME

business while exporting their goods. The present case study is focuses on to

Study the issues and challenges of export market with special reference to

Vashi agricultural produce market committee market, Navi Mumbai. This

study is based on some parameters such as age, gender, nature of business,

and their level of income. APMC has manifold role to play as a catalyst in

promoting exports. It not only constructs a platform for the exporters to

redress their problems and suggestions to the concerned authority but also

helps to penetrate new markets for Indian products. Representations of

APMC are well received by the Diplomats, Governments in India and abroad.

Having a wide global network, APMC provide reciprocal trade promotion

activities for the benefits of Indian exporters.

The purpose of the study is to understand the role and activities of

Department of Commerce, Government of India &to study and understand the

role of APMC Market and activities to be performed by it.

The scope of the Study includes twenty-five export traders. Exploratory and

Qualitative Research has been carried out to understand the services

provided by the APMC. To Study the effectiveness and efficiency of the

APMC, an index has been developed based on the ranking obtained under

the various parameters. Feedback has been obtained through Questionnaire.

Based on the feedback, the index of effectiveness has been worked out.

The main objectives of the study are to understand the various issues &

challenges faced by Export market, to understand the nature & the type of

business, to understand about the challenges faced by Businessman, to

understand the relevant schemes and about the various subsidies needed to

the Businessman and to study the impact or GST on the small business.

xiii

Vashi, one of the oldest and most populated industrial nodes in Navi Mumbai,

is home to many industries, traders, and even IT companies. The city is also

home to APMC (Agricultural Produce Market Committee), the biggest

wholesale agriculture produce market in Asia. The agricultural produce market

covers all of 170 acres. There are a staggering 3700 Godowns, 1500

Commercial blocks, 4 large Auction halls, 2 Giant warehouses, and 5 large

Wholesale market yards. Apart from this, there are big processing centres - a

vapour heat treatment plant, ripening facilities, cold storage facilities, and an

export facilitation centre and so on.

Over 12000 tonnes of Agri-commodities arrive daily into this market. The

produce is sold by auction and the prices are noted and managed by the

Mumbai Agricultural Produce Market Committee. It is the committee's

responsibility to ensure that sales do not take place below the minimum price

fixed by the government. They are also responsible for ensuring fair

measurement and weighing, and fair charges for labour.

The Agriculture Produce Market Committee (APMC) at Vashi, barely 35 km

from the main Mumbai city, is one of Maharashtra’s 305 regulated mandis

where produce is first traded before being taken for consumption elsewhere.

While the smallest of these may have a yearly turnover of below Rs 25 lakh,

the Vashi APMC is the largest and a terminal market receiving daily over

2,000 trucks that ferry produce from both within and outside Maharashtra. In

Maharashtra, the Agriculture Produce Market Committees (APMCs) are

having 294 main market yards and 612 sub market yards and all are

functioning currently. However, these functioning markets have a number of

inadequacies in market facilities. The Government of Maharashtra (GoM),

through its nodal agency for agriculture marketing, Maharashtra State

Agriculture Marketing Board (MASMB) and in this context has approached the

World Bank for financial assistance.

Indian agriculture has greatly contributed to foreign trade even in its traditional

form. Indian Agricultural products have been facing stiff competition from

Asian countries for quite some times. Due to globalisation and liberalised

xiv

regime, this competition is likely to increase further and new initiatives in

agriculture development shall have to meet the emerging challenges. The

performance of agriculture after integration with the world markets is linked to

the success of exports. In its bid to increase overall exports, the government

of India has decided to achieve this objective by giving a push to production

and export of agricultural commodities. Agriculture has been a source of

foreign exchange for India in the past. Most of the export earnings of

agriculture came from the conventional items such as tea, cashew and spices.

India's share in the world agricultural exports is very low in many items. Until

the beginning of the early seventies India has been an importer of a number

of agricultural commodities. With the exception of a few commodities like rice,

cotton, tea, coffee, oilseeds, oil cakes, tobacco and spices, the share of

agricultural export of India in total world trade was very insignificant. The

share is particularly low in the world trade of fish, meat, chicken, vegetables

and fruits. India has made substantial strides in the total world production of

many commodities. However, its share in the export market is relatively very

small. The pertinent questions of marketable surplus and export surplus are

ailing the export potentials of Indian agricultural products. Nevertheless, the

country has made phenomenal efforts in enhancing the agricultural exports.

The present case study is based on the study of the small market exporter’s

ideology. According to the knowledgeable source, the sample size of small

Exporter has been selected residing in Vashi APMC Market, NaviMumbai

area for the convenience of sampling. Stratified Random Sampling method

has been followed for collecting primary and secondary data. There are

around 2000 exporters and only 50 % of them are in regular export business,

which includes Status holders, multi-product merchant exporters and

manufacturer exporters. Hence, from the population of 1000 active exporters

sample sizes of 10% (i.e. 100 exporters) have been selected on random from

APMC Market, Vashi NaviMumbai covering all product groups. More than

60% of the sample size was from SMEs. The rationale behind selecting more

SMEs in the sample size was that they contribute more than 50% to total

exports.

Type of Sampling – Stratified Random Sampling.

xv

The statistical analysis of data tells that the responses observed from each

item in the questionnaire were scored and tabulated into a master sheet. Data

was analysed and interpret with the help of graph and pie charts.

The interpretation and report writing tells that the analyzed data were

finally interpreted to draw the conclusions and reported with the objective of

the study in view.

The limitation of the research is confined to multi-product groups and

markets; hence, the findings will be generic in nature.

The expected benefits of the findings of research is to upgrade their

services and improve their competitiveness, Exporters will gain knowledge

and information for better performance, State Governments to prepare the

export strategy for the State and Ministry of Commerce to take corrective

policy measures.

The probable outcome of the study will focus on how to enhance the

various subsidies provided or currently needed to them and on various

schemes that are provided and currently needed to them by conducting

primary research using a coded questionnaire targeted at APMC Market;

Vashi NaviMumbai Businessman has to get a viewpoint. In addition,

secondary research into innovative learning approaches will help create a

well-rounded recommendation of actions to be taken in order to enhance

various subsidies provided or currently needed to them and on various

schemes that are provided and currently needed to them.

The in-depth details study will be more helpful to Exporter of APMC Kirana

Market Vashi NaviMumbai. The following aspects will add value to relevant

schemes and about the various subsidies needed to the Businessman, which

are:

xvi

Focusing on the various Schemes provided to the Exporters of APMC

Market, Vashi NaviMumbai

Focusing on the various Subsidies provided to the APMC Market,

Vashi NaviMumbai.

Focusing on the various Schemes needed to the Exporters of APMC

Market, Vashi NaviMumbai.

Focusing on the various Subsidies needed to the APMC Market, Vashi

NaviMumbai.

Provided dedicate pathway that enables exporters to increase their

business domestically and internationally.

The study in nutshell will enable all exporters to assimilate new approaches

and benefits to better resources utilization and higher success rates.

Due to global expansion in food trade, the World Trade Organization (WTO)

has set as one of their objectives the opening up of trade between countries

and aims to address restrictive trade barriers. Sanitary and phyto-sanitary

(SPS) issues have always been important in global trade and have become

one of the most important potential Technical Barriers to Trade (TBT). Pests

or pathogens may exist in one country but not in another, thus ultimately

resulting in restrictive TBT. In addition, food safety has become one of the

most important minimum requirements for future trade with developed

countries.

The rapid increase in newly reported cases of outbreaks of food-borne

diseases particularly associated with fresh produce has been the primary

drive towards establishing minimum food safety standards. To be part of

global trade in fresh produce and food related products it will in future require

compliance to some kind of food safety assurance system.

The global drive towards ensuring safe food supplies must also be seen as

part of the focus on food security. Safe food must be ensured in both

developed and developing countries. The global emphasis on safe and secure

xvii

food supplies also sees against a backdrop of an increasing number of

diseases in developing countries. With respect to developed countries, such

often associated with the consumption of fresh or processed food. In this

scenario, the importance of microbial contamination is of major concern and

has been the driving force behind the establishment of the USA Good

Agricultural Practices (GAP) policies and surveillance systems. Currently,

there are numerous systems that growers can adopt to ensure safe food

production, which include amongst others Good Agricultural Practices (GAP),

Good Manufacturing Practices (GMP), Hazard Analysis Critical Control Points

(HACCP), Good Hygiene Practices etc. One of the GAP systems that have

taken off within the European community is GLOBALGAP.

Apart from Germany and France, most other countries within the EU support

this system, as do the major retailers, which consider it the minimum standard

for food trade. It is important to note that these global standards will hopefully

be harmonized but for the time being, major retailers still have their own set of

requirements that growers will have to adhere to.

After a complete study on data analysis and interpretation, conclusion

drawen from the study is that Majority of the respondents are Dry fruits

Exporters &their monthly turnover is above 50 Lakhs they are dealing in

export and import of Vegetables, Fruits, Food Grains, Nuts, Dry Fruits, and

many other products. As per the further survey respondents import and export

their goods from foreign countries and it seems that while trading they are

facing many problems. Majority of the respondents are getting Bank Support

& Transportation as a help from the government they are not aware of any

promotional measures offered by the Government respondentsare beneficial

to have clusters like the APMC Market, which will help in promoting

export/import of goods. Majority of the respondents are not facing any kind of

challenges due to ‘Make in India’ concept brought by an Indian government

and are saying that ‘GST’ bill is useful to expand their Export/Import of goods

business.

xviii

So moving towards recommendation and conclusion APMC should create

more focused and cohesive efforts to help and assist exporters to penetrate

into new markets and support them wherever necessary. The ultimate result

of this should be to make India stand in the forefront in creating the Brand

India concept of the government, based on the policy announcements.

Another important point is that the APMC should act as a catalyst for timely

disbursement of the incentives falling under their purview. Additional

incentives announced under the special focus initiative as per the policy for

both focus products and focus markets are made available to all the eligible

exporters well in time and this will be a highly motivating factor for the

exporters. APMC should also understand that any delay happening in

disbursement of the incentives or delay in recommending for the same would

result in exporters losing faith in the government and their announcements.

Hosting an interactive website, and more focussed newsletters providing the

changes in various laws/ statutes affecting exports/imports of different

countries and regularly updating the website with such changes will be a

welcome measure as this helps to keep the exporters abreast of the basic

information. APMC should add quality improvement in their agenda in

conducting training and updating programme in the commercial fields. Risk

management and mitigation of risk, spreading the importance of various

insurances and their impact on the sustenance of business should be made

as a part of the workshops / training programmes / seminars etc. Ultimately,

the members should understand that covering the risk should not be seen as

statutory requirements, but it is for the safety of their own business. APMC

mainly network with Indian embassies abroad. This should be made wider by

networking with other global trade promotion organisations and benefits of

outcome / knowledge / information to be passed on to members.

Finally, timely and quick response of APMC should be their agenda of

operations as time is an important factor in international trade and ultimately

time is money.

1

CHAPTER – 1

Introduction

India is the Agricultural country and 65 % to 70 % people are related with

agriculture. They are totally depending upon monsoon. They also believe in

luck. In the past when money is not available means Barter systems the

farmers used exchange their goods with others and take that goods which he

required. So there is no need to agricultural market. But at now the money is a

main thing and satisfy the human wants through money. So farmer needs the

market when he sold his product to customer with protection. Agricultural

Marketing is an area for the "second generation" of green revolution

problems. Indian Marketing is undergoing a significant metamorphosis

because of economic liberalization and globalization. Infrastructure

development is the critical factor for determining the success of market-

oriented strategy and macro-economic policies in developing countries. Both

national and global players are trying to capture the urban markets of India,

which has already reached a saturation level, and it is extremely difficult to tap

the urban markets with high profit margin. In export market, a firm has to face

challenges from Multi-National Corporate (MNCs), other foreign companies

and domestic firms of the concerned export markets. While urban market or

export market is difficult to plough, rural market is relatively easy and feasible

to cultivate, in India.

They buy the agricultural product to desire quantity and desire quality. The

customer or merchant gets benefit to purchase the product at one place and

government price. Due to this market all types of wages or expenses related

with to sell its product is on merchant not on farmer. Farmers are enjoying the

benefit to sell his product to merchant or not at decided price. Government

decides the price of different agricultural product so that at all level price is

same. This market protect to farmers against the misleading or unfair trade

practice. The agricultural market is very much helpful to the farmer and the

customers or whole seller merchant because all types of goods are available

on one place.

2

Vashi, one of the oldest and most populated industrial nodes in Navi Mumbai,

is home to many industries, traders, and even IT companies. The city is also

home to APMC (Agricultural Produce Market Committee), the biggest

wholesale agriculture produce market in Asia. The agricultural produce market

covers all of 170 acres. There are a staggering 3700 Go downs, 1500

Commercial blocks, 4 large Auction halls, 2 Giant warehouses, and 5 large

Wholesale market yards. Apart from this, there are big processing centres - a

vapour heat treatment plant, ripening facilities, cold storage facilities, an

export facilitation centre and so on. Over 12000 tonnes of Agri-commodities

arrive daily into this market. The produce is sold by auction and the prices are

noted and managed by the Mumbai Agricultural Produce Market Committee. It

is the committee's responsibility to ensure that sales do not take place below

the minimum price fixed by the government. They are also responsible for

ensuring fair measurement and weighing, and fair charges for labour.

MSAMB has the program to promote exports of fresh fruits, vegetables &

flowers from Maharashtra to the various countries of world with the help of

farmers & their organizations. The main products handled are grapes,

mangoes, cashew nut, Turmeric etc. It‘s a place where more than Rs 10,000

crore worth of fruits, vegetables and other farm produce gets traded annually.

But right now, it‘s also the scene of a prabodhan, a mass awakening

campaign by traders and commission agents that could gather pace in the

days ahead.

The Government of Maharashtra (GoM), through its nodal agency for

agriculture marketing, Maharashtra State Agriculture Marketing Board

(MASMB) and in this context has approached the World Bank for financial

assistance. Marketing and trade, as an activity comes at latter part of the

value chain for any commodity and yet it is the most important determinant for

all other activities. All the input expenses for labour, materials and capital are

rewarded at this stage, which shall include some incentive over and above

inputs. Agricultural products, in a developing country remain in uniform

demand throughout year, while production of most of them is concentrated in

some part of the year. This results in fluctuation in prices which can change

3

equations of profit for the farmer. Apart from this, in a federal and diverse

country, every state or region has diverse resources, consumption patterns

and rules regarding taxation, levies, sale etc., which makes numerous hurdles

in interstate trade. Integration of all the regional markets into national market

is desirable in interest of both farmers and consumers. Farmers will get

rewarding prices even if demand is not there in their region, on other hand if

there is less production in a state, consumer will still be able to get products at

reasonable prices. Same is true for international markets, we have seen few

years back when prices of sugar were up swinging, and then sugar imported

from Brazil came to rescue Indian consumers. However, integration of

national and international markets, at times can make domestic and regional

farmer vulnerable because of external forces. For these reasonable regulation

is imperative. In last article we read about procurement and disbursal by

government which involves about 33% of total production of food grains.

Another, 33% is captively consumed by farmers and residue is left for open

markets. Trade of this quantity is also heavily regulated by the government

through APMC act and various taxes and levies. So, less quantity left in

market is in itself a strong reason for price rise, which is further supplemented

by monopoly of government in open market. Further, under current system

there are number of intermediaries who add little value to the product, but

increase price dramatically by commissions or trading margins. This all

coupled with lack of integration of market leaves farmers and consumer

vulnerable alike.

1. Agricultural Produce Market Committee (APMC) Act

a) Purpose

Agriculture is a state subject and almost all state governments enacted APMC

act in 1950‘s or so, to bring transparency and end discretion of traders. This is

extension of overall government policy which is directed toward food security,

remunerative prices to farmers and fair prices to consumers. However,

widespread perception for this act is that it has worked contrary to almost

every stated objective, at least in recent past. It should be noted that though

current system controlled by APMC is quite inefficient, yet it is far

4

improvement from pre-APMC/50‘s era. At that time there was no control at all.

Money lender, traders, bankers etc. were often one person. This all in one

role of middleman resulted in perpetual indebtness of farmer. Under the

APMC acts, States are geographically divided in to markets which are headed

by market committees and any production in that area shall be brought to a

market committee for sale. This is applicable to ‗notified agricultural products‘

which differs from state to state and generally includes most of the important

cereals, vegetables and other horticulture products. Notified products are

meant to be brought to the market committee and auctioned in presence of

the farmer.

In this Market committee (popularly called Mandi) there are commissions

agents (called arhatiyas) who hold license and are allotted a shop in the

market. Farmer and buyer have discretion to go to any agent in this market,

based on personal relations. Normally farmers chose agents from their own

village and are influenced by age old relations of money lending. There are

huge numbers of commission agents in a particular APMC dealing in same

crop, which results in constant price discovery and adjustments for that

particular crop.

At same time buyers, which may be rice mill, flour mills, cotton ginning mill

owners, come to procure these products. They make their bids and if these

bids are fair, will give best return to farmers. But unfortunately this is not so.

An APMC Yard

b) Shortcomings in Current APMC system

1. Monopoly of APMC – Monopoly of any trade (barring few exceptions) is

bad, whether it is by some MNC corporation by government or by any APMC.

It deprives farmers from better customers, and consumers from original

suppliers.

5

2. Cartelization – It is quite often seen that agents in an APMC get together

to form a cartel and deliberately restraint from higher bidding. Produce is

procured at manipulatively discovered price and sold at higher price. Spoils

are then shared by participants, leaving farmers in lurch.

3. Entry Barriers – License fee in these markets are highly prohibitive. In

many markets farmers were not allowed to operate. Further, over and above

license fee, rent/value for shops is quite high which keeps away competition.

At most places only a group of village/urban elite operates in APMC.

4. Conflict of Interest – APMC play dual role of regulator and Market.

Consequently its role as regulator is undermined by vested interest in

lucrative trade. They despite of inefficiency won‘t let go any control. Generally,

member and chairman are nominated/elected out of the agents operating in

that market.

5. High commission, taxes and levies- Farmers have to pay commission,

marketing fee, APMC cess which pushes up costs. Apart from this many

states impose Value Added Tax.

6. Other Manipulations – Agents have tendency to block a part of payment

for unexplained or fictitious reasons. Farmer is sometimes refused payment

slip (which acknowledges sale and payment) which is essential for him to get

loan.

c) APMC model act

Taking these concerns into cognizance, Central Government appointed a

working group which recommended a Model APMC act. Salient features are –

1. Farmer doesn‘t need to bring his produce to APMC Mandi. He can directly

sell it to whomever he wants. But, if he doesn‘t bring his produce to

Mandi, then he can‘t stand for election in that APMC marketing

committee. It allows alternate markets such as direct purchase centers,

private market yards/mandis.

6

2. It increased responsibility of APMCs on following lines –

Full payment should be made on day of sale itself.

Quantity brought and prices should be displayed near arrival gate. Its

being done electronically in many APMCs

Promote private partnership in management of APMCs

It shall make efforts to build facilities for Processing and other value

additions

Ensuring transparency in Pricing and Transactions in the market

3. It allows Public Private Partnership in the ‗management and development‘

of agricultural markets in the country for post-harvest handling, cold

storage, pre-cooling facilities, pack houses etc.

4. It not only allows, but strongly advocates for contract farming. It also

provides for dispute resolution mechanism.

5. It mandates establish ‗State Agricultural Produce Marketing Standards

Bureau‘ for Grading, Standardization and Quality Certification.

6. It provides for abolishment of commission agent system. Payments will be

made for facilities such as grading, sorting, and processing.

APMC model act is a sort of roadmap for states for their respective APMC

acts which shall be amended. States has adopted Model APMC in piecemeal

manner as per vested interests of various pressure groups. Most of states

haven‘t abolished system of commission agents as they constitute influential

people.

Bihar repealed APMC act in 2006, while Kerala never had any APMC act, but

situation is no better there as thrust on development alternate markets is

lacking. Demand is just to dismantle monopoly of state regulated APMCs and

increase competition. APMC can continue and with competition they can get

efficient overtime.

7

Why model APMC Act is also considered inappropriate?

The model legislation has actually given rise to a conflict of interest, as the

APMC, which is a major player, is also the regulator/registering authority.

There is reluctance on part of state governments to reform the APMC

legislation, as it generates huge revenues. Some states have created entry

barriers by prescribing either prohibitive license fees for setting up such

markets, or the minimum distance between private markets and APMC

markets.

d) Economic Survey on APMC act

a. The provisions of the State Agricultural Produce Marketing Committee

(APMC) Acts have prevented creation of competitive conditions in the

distribution of commodities and creation of a national market for agricultural

commodities. Multiple layers of intermediation in the distribution of food

articles have also pushed up prices for consumers. It is therefore necessary to

focus on distribution channels and on reducing food wastage in the supply

chain.

b. The liberalization of 1991 focused on the industrial sector. While

industry was liberalized and allowed to buy from, and sell to, anyone in the

world, Indian farmers in many states, are still required to buy and sell only in

the government-designated Agricultural Produce and Marketing Committees

(APMC) to licensed entities. Farmers are not allowed to sell their produce

directly to the consumers. A national market for food is yet to develop.

c. Interventions by the government are problematic. The first is the maze

of restrictions on transactions and storage. This includes state-level APMC

laws, the Essential Commodities Act, and the administrative measures at local

and state levels that distort the decision to grow and the decision to store.

8

d. State APMC laws are a major hurdle to modernization of the food

economy. They have artificially created cartels of buyers who possess market

power. The proposed Model APMC Act 2003 is an inadequate solution, as

APMCs remain a non-level playing field.

e. To create a national market the central government needs to use

powers under the Union List and the Concurrent List of the Seventh Schedule

of the Constitution to end the monopoly powers of the APMCs and replace

other punitive and coercive state laws affecting the food market.

f. Apart from breaking the monopoly and dissuading state governments

from treating the APMCs as liberal sources of revenue, substantive efforts

have to be made to create alternative trading platforms in the private sector

where it is possible to reduce the layers of intermediation. Since this may take

time, fruits and vegetables should be taken out of the purview of the APMC

Acts immediately. A processor should be able to buy directly from farmers

without having to pay any Mandi fee/tax to the APMC.

i. Permit sale and purchase of all perishable commodities such as fruits

and vegetables, milk and fish in any market. This could later be

extended to all agricultural produce.

ii. Exempt market fee on fruits and vegetables and reduce the high

incidence of commission charges on agricultural/horticultural produce.

iii. Taking a cue from the success of direct marketing efforts of states, the

APMC/other market infrastructure may be used to organize farmers

markets. FPOs/self-help groups (SHGs) can be encouraged to organize

farmers markets near urban centers, malls, etc. that have large open

spaces. These could be organized every day or on weekends,

depending on the concentration of footfalls.

9

iv. Include ‗facilitating organization of farmers markets‘ under the permitted

list of corporate social responsibility (CSR) activities under

Companies Act 2013, to encourage companies engaged in agri-allied

activities, food processing etc. to take up this activity under CSR and

also help in setting up supply chain infrastructure. This would be similar

to the e-Choupal initiative of ITC Ltd., but under CSR.

v. All the above facilitators can also tie-up a link to the commodity

exchanges‟ platform to disseminate spot and futures prices of

agricultural commodities.

Some measures that would facilitate the creation of a barrier-free

national market are:

1. Alternate Marketing Channels

a) Direct Marketing

APMC model act promotes direct marketing. As farmer is allowed to sell his

goods outside APMC, he can now under APMC model act, directly sell to

consumer. This completely eliminates middleman and narrows gap between

farmer‘s sale price and price paid by consumer.

There are numerous successful examples all over India such as ApniMandi in

Punjab, Rythu Bazar in Andhra Pradesh, UzhavarSandhai in TN, Shetkari

Bazaar in Maharashtra, Hadaspur Vegetable Market in Pune, Krushak Bazaar

in Odisha and KisanMandi in Rajasthan.Central government sponsors

‗Agricultural marketing Infrastructure, Grading & standardization Scheme‘ for

development of infrastructure for direct marketing in which capital subsidy of

25% is available (33.33% in NE states).

10

b) Contract Farming

Under contract farming inputs material may be provided by purchasing party

for a particular crop and there is a crop buyback agreement in advance

Quality is specified in advance. This is mainly entered into by big corporates

who are in business of food processing. So far there has been mixed results.

It removes uncertainty of Income for the farmer and he can fetch good prices.

But this all depends upon ready availability of genuine information about the

market trends. It is seen that there is stark information asymmetry between

corporates and farmers. This open up avenues for exploitation of farmers as

these are long term contracts, once agreed by farmer at lower price, market

price doesn‘t matter for contract period.

c) Future contracts and „negotiable warehouse receipts‟ in agriculture

A futures contract is a contract between two parties where both parties agree

to buy and sell a particular asset of specific quantity and at a predetermined

price, at a specified date in future. Let‘s take example of an Exporter –

Exporter sells goods to USA at 3 month credit at $ 1 lakh. At this time

exchange rate of 1$ is Rs 60. So he expects to receive Rs 60 lakh After 3

months. But in 3 months exchange rate can go down to Rs 57. This will cause

him loss of Rs 3 lakhs.

So, at time of sale, exporter can enter into ‗currency futures‘ sale contract. He

will enter into contract with banker under which banker promises to:

1. Buy dollars after 3 months,

2. Fixed quantity i.e. $ 1 lakh,

3. At predetermined rate – whatever rate is going in market for ‗3 months

currency futures‘

At end date, contract may be either settled by delivery of dollars by exporter to

bank (at predetermined price/contract price) or by settling price difference

market and contract price in cash. These contracts between two parties are

11

tradable like commodities on various exchanges. Note that, whenever

exchange rate of a $ will vary, (below or beyond Rs 60) it will influence value

of the contract itself.

Hence, these contracts are instruments for Risk management, price

discovery and trading. This trading attracts intense scrutiny of market

analysts for prediction of future trends of demand and supply, which in turn

yield much useful data for manufacturers and producers. This has much utility

for the farmers as they can decode future trends and plan their production

accordingly. Farmer can similarly sell his production in advance in futures

market and buyers can buy in futures market.

In 2003 futures trading in all agricultural commodities was allowed and in

2007 The Warehousing (development and Regulation) Act, 2007 was passed.

This created „Warehousing Development and Regulating Authority‟

(WDRA). WDRA introduced a concept of „Negotiable Warehouse

Receipt‟. There are WDRA certified warehouses all over India, in which

farmers can deposit there produce and they will get a receipt (Negotiable

Warehouse Receipt) acknowledging quantity, type, category etc. of crop.

This receipt can be used by farmers to get loans, to make payments or to

settle any other type of claim. This receipt will be accepted by any ‗certified

warehouse‘ in India and possessor of this receipt can get quantity mentioned

in it. The Negotiable Warehouse Receipts (NWR) system aimed at not only

helping the farmers to avail better credit facilities and avoid distress sale but

will also to safeguard financial institutions by mitigating risks inherent in credit

extension to farmers. However, this to work effectively need a market based

economy and free determination of prices. Various commodities are time and

again banned for futures trading which keeps farmers and investors away.

Further, there was scam in commodity exchange NSEL; it was found that

stock of underlying assets, on basis of which contracts were entered, didn‘t

existed. Consequently, NSEL failed to settle its contracts.

12

2. International Trade

India is among largest producers for products like wheat, rice, milk, pulses

etc., but its share in agro global trade is much lower. This is partially due to

heavy domestic consumption and rest due to non-coherent and unpredictable

policies. There are quantitative restrictions which differ from crop to crop

and time to time. Few years back cotton exports were suddenly banned after

domestic prices rise and soon ban was lifted. There are export quotas,

beyond which export is not allowed.

Trade of basmati rice was liberalized in 1990‘s and since then its prices are

almost integrated to international prices which are more remunerative to

farmers.

Exports of agro product were valued at USD 32.3 billion in 2013-14, a jump of

122 per cent from 2008-09. But big part of this was offloading of surplus

stocks by FCI in foreign markets.

Import of one lakh tons of rice was undertaken over a five month period from

Myanmar for augmenting the TPDS supplies in the north-eastern states. Such

avenues need to be explored especially as they could be more economical

than transporting rice from surplus states like Punjab or AP, and would limit

FCI‘s Procurement, and consequently, distortion, in the domestic market.

3. Essential Commodities Act

The EC Act, 1955 provides for the ‗regulation and control‘

of production, distribution and pricing of commodities which are declared

as essential for:

1. maintaining or increasing supplies or

2. for securing their equitable distribution and

3. Availability at fair prices.

13

Major commodities are covered under the act. Some of them are:

i. Petroleum and its products, including petrol, diesel, kerosene, Naphtha,

solvents etc.

ii. Foodstuff, including edible oil and seeds, vanaspati, pulses, sugarcane

and its products like, khandsari and sugar, rice paddy

iii. Jute and textiles

iv. Drugs- prices of essential drugs are still controlled by the DPCO

v. Fertilizers- the Fertilizer Control Order prescribes restrictions on transfer

and stock of fertilizers apart from prices.

The Drug Price Control Order (DPCO) or Fertilizer Control Order and such

other orders have also been issued under the powers of the ECA.

The Act is thus pro-consumer and impacts at the level of the wholesaler and

retailer. The Act empowers the Centre to order states to impose stock limits

and bring hoarders to task, in order to increase supplies and cool prices.

Generally the Centre specifies upper limits in the case of stock holding and

states prescribe specific limits. However, in case there is a difference between

states and the Centre, the act specifies that the latter will prevail.

In 2002 and 2003 an order was passed removing the licensing requirements,

stock limits and movement restrictions on all specified foodstuffs. These

orders allowed dealers to freely buy, stock, sell, transport, distribute, dispose,

acquire, use or consume any quantity in respect of rice/paddy, wheat, coarse

grains, sugar, edible oils and oilseeds, pulses, jagery, Wheat products etc.

However, later in 2006 due to price rise in agro products, state governments

requested for restoration of powers under EC act and it was done by central

government. Since then there have been regular on and off policy. Different

states put different limits on stock. As of now only sugar and wheat stands

denotified by central government. Recently potato and onions were added to

the list as inflation control measure.

14

While it is true that at times hoarding of commodities can cause shortage in

market, yet ban on stocking runs contradictory to government policy directed

toward food processing and cold storage. If an entrepreneur invests in cold

storage facility, he is supposed to stock something to utilize storage space

and for profit. Ban on storage can demotivate investment storage capacities.

Further, thrust should be on dismantling incentives to stock products for long

period. From long experience it has been seen that government has limited

capacity to restrict illegal stocking. In this scenario inter-regional and inter-

temporal variation in prices of crops should be brought down. As already said,

most crops are produced seasonally, but are consumed throughout the year.

Uniform supplies of these crops throughout year can be insured by increasing

competition at middle of supply chain i.e. between wholesalers/retailers. This

shall be supplemented by adequate investment in supply chain infrastructure.

As we have seen most of these institutions were designed in 1950‘s and 60‘s

in response to formidable challenges of food security and farmer protection.

This was followed by green revolution, then by liberalization of economy. This

gave India abundance of grains and new trading mechanism like futures,

NWR came to fore. In all these changes, reformation and redefinition of role of

these institutions was overlooked. Consequently, they gradually moved in

opposite directions. To hold them together, government needs to make a

coherent policy to redefine role of these institution and underlying

mechanisms.

Recognizing that a competitive market, besides adding to the welfare of the

producers and consumers also plays a contributory role in poverty alleviation,

the recent Budget also highlighted that farmers and consumers‘ interest will

be further served by increasing competition and integrating markets across

the country. While these are discrete measures, a holistic policy with across-

the-board reforms would enable the Indian agricultural market to cross the

Rubicon and progress towards Achieving Pareto efficiency.

15

Policies Related to Agriculture Marketing

In addition, some of policies related to agriculture marketing were reviewed as

briefed below.

a) Model APMC Act:

This Act was formulated with a view to promote development of competitive

marketing infrastructure and bringing professionalism in the management of

existing market structures besides safeguarding the interest of farmers. The

Act provides space for establishment of Private Markets/yards, Direct

Purchase Centres, and Consumer/Farmers Markets for direct sale and

promotion of Public Private Partnership.

b) Maharashtra Agricultural Produce Marketing (regulation)

(Amendment) Act 2005:

Based on the model APMC Act, GoM made amendments to the existing

APMC Act titled Maharashtra Agricultural Produce Marketing (regulation)

(Amendment) Act 2005. This Act stipulates granting of licenses subject to

terms and conditions for direct marketing or establishing private markets.

The Agriculture Produce Market Committee (APMC) at Vashi, barely 35 km

from the main Mumbai city, is one of Maharashtra‘s 305 regulated mandis

where produce is first traded before being taken for consumption elsewhere.

While the smallest of these may have a yearly turnover of below Rs 25 lakh,

the Vashi APMC is the largest and also a terminal market receiving daily over

2,000 trucks that ferry produce from both within and outside Maharashtra. As

on today the period of elected directors body which was begins from

2.12.2008 dissolved by Government order on 2.12.2014 and the Administrator

Shri Manoj Saunik, I.A.S. officer was appointed by Government on Mumbai

APMC., Mumbai.

16

1. General Information:

a) Establishment year/objectives –

Mumbai Agricultural Produce Market Committee has been established on 15th

January, 19777 under the provisions of the Maharashtra Agricultural Produce

Marketing (Regulation) Act, 1963. It is a Body Corporate under Section 12 of

the said Act. Amongst others, main objectives of establishment of Mumbai

APMC are- to develop modern market yards for agricultural commodities,

regulation of marketing of agricultural commodities, help the farmers to fetch

better price for their produce, create infrastructural facilities for orderly

development of trade, to maintain and manage the markets and stipulate

conditions for use of markets within the market area. The Committee has

been established with objectives of regulation of marketing of agricultural and

certain other produce therein, establishment of markets therefore and for such

incidental purposes. The Committee is required to regulate and supervise the

marketing of agricultural produce in accordance with the provisions of the said

Act, Rules made there under and Byelaws of the Market Committee. It is

empowered to regulate entry of persons and vehicles as well as to take all

possible steps to prevent adulteration and to promote and organize grading

and standardization. The Committee is required to collect, maintain and

supply information in respect of productions as well as storage, processing,

prices and movement of the notified agricultural produce.

b) Constitution – Board – Representatives

Election of Mumbai APMC was held on 31.10.2008 and as per new provisions

of sections 13(1A) (1B), (3), (4) and (5) of the Maharashtra Agricultural

Produce Marketing (Development and Regulation) Act, 1963, the Board of

Directors of Mumbai APMC consists of 27 members i.e. 12 agriculturists

members 2 each from 6 Revenue Divisions, 5 traders representatives 1 each

from declared wholesale markets, representatives of mathadi and mapadi

workers, 5 Government nominated representatives, 1 member from Navi

Mumbai Municipal Corporation, 1 member from Brihan Mumbai Municipal

Corporation and the Directors of Mumbai, Maharashtra State, Pune.

17

d) Executive Management Structure and staff –

Secretary and Hierarchy below –

Present staff strength of Mumbai APMC is 622 working in various cadres.

Mumbai APMC is headed by the Secretary assisted by 2 joint Secretaries.

Chief Accounts Officer, Superintending Engineer, Executive Engineers,

Senior System Analyst, Deputy Secretaries and other staff. The organizational

set up is as appended.

e) Subcommittees –

Executive Sub-Committee, Construction Sub-Committee,

Staff Sub-Committee, License Sub-Committee,

Dispute Settlement Sub-Committee, Grading Sub-Committee:

f) Marketing Details During the year 2013-14 to 2015-16 (in M.T.)

Source: MAPMC 31st March 2016

g) Recovery of Market Fees for the last 5 years (Rs. In Lakhs)


18

h) Supervision Charges paid to the State Government during last 5 years

(Rs. In Lakhs)


i) Total land – (a Main Yards-)


(b) Land available for expansion for putting up modern infrastructure –

City and Industrial Development Corporation of Maharashtra Ltd. Has

earmarked 122 hectares of land for development of market yards of

agricultural commodities, from which CIDCO has handed over a land of about

69 hectares to Mumbai APMC on which 7 Wholesale Market Yards with 3788

shop-cum-godowns, 1591 office blocks, 4 Auction Halls, 2 Warehouses, 5

Central Facility Buildings, 2 Exporters Buildings, etc. are developed by the

Mumbai APMC.

j) Infrastructures – Main Yard-

Central Facility Buildings, Guest House, Police Stations, Canteens, Banks,

Post Office, Dispensary, Electronic Telephone Exchange (EPABX), Farmers

Rest House, Weighing Machines, Weighbridges, Sulabh Souchalaya,

Ripening Chamber, Auction Halls, Common Warehouses, Cold Drinking

Water Centres, etc.

19

k) Number of Licensed market functionaries: (For the Period ending 31st

March, 2016)


L) Income and Expenditure of APMC for last 5 years- (31st March, 2016)

(Rs. In Lakhs)


20

m) To curb the unauthorized trade:

As per the provisions of section 6 of the Maharashtra Agricultural Produce

Marketing (Regulation) Act, 1963, wholesale trade of the agricultural produce

under regulation of the APMC, must be done in the declared Market Yards of

the MAPMC, as notified by the Director of Marketing, Maharashtra State,

Pune. In order to curb the unauthorized trade, MAPMC has initiated the

various steps against those who are involved in unauthorized trade of

agricultural produce in the jurisdiction of Mumbai APMC.

n) Setting up of Check Nakas:

The Mumbai APMC has set up its own Check Nakas adjacent to the Octori

Nakas of Brihan Mumbai Mahanagarpalika, wherein 60 employees of the

MAPMC are working in 3 shifts at 24 hours. The vehicles carrying the

regulated agricultural produce are permitted to enter Mumbai City, after

verification of Mumbai Entry Pass and such other documents submitted by the

vehicle owners at the Check Nakas.

The Vigilance Squad is set up to intercept the vehicles carrying agricultural

produce unauthorisedly in the jurisdiction of Mumbai APMC. This Vigiliance

Squad is provided with vehicles and controlling staff in order to have

maximum output. The regulated agricultural produce arriving at various

Railway Stations at Mumbai is diverted to various declared wholesale Market

Yards at Navi Mumbai by the vigilance Squad. A Vigilance Squad has also

been empowered to intercept the vehicles carrying agricultural produce

unauthorisedly and to take penal action against the vehicles under the

provisions of the Maharashtra Agricultural Produce Marketing (Development &

Regulation) Act, 1963, Rules and Bylaws made there under.

21

Details of the vehicles seized by the Vigilance Squad and penalties recovered

from the owners during the last 5 years are as under: -


2. Issues related to reforms:

a) Licensing:

i) Types of licenses –

As per the provisions of Maharashtra Agricultural Produce Marketing

(Regulation) Act, 1963, every functionary involved in sale and purchase of

agricultural produce has obtain license for operating inthe market yards/area

of Mumbai APMC. There are various types of licenses such as – commission

agent, trader, mapadi or in any other capacity in relation to the marketing of

the declared agricultural produce.

ii) Licenses for traders-producers and practices-

Subject to the rules made in behalf of the grant of licenses to the various

functionaries, a market committee may, after making inquiries as it deems fit,

grant or renew a license for the use of any place in the market area for

marketing of the agricultural produce or for operating therein as a trader,

commission agent or in any other recording its reasons in writing therefore,

refuse to grant or renew any such license.

b) Plot Allotment-

Seven plots, under the category of Warehousing plots, admeasuring about 70

hectares, are allotted by CIDCO to Mumbai AOMC, on which Market Yards for

various agricultural produce such as Foodgrains, Pulses, Condiments and

Spices, Sugar, Fruits & Vegetable, Onion & Potato, etc. are set up. The said

plots are allotted for lease tenure of 60 years.

22

c) Transparency of operations -

In order to have transparency in the working, MAPMC is committed to have

open auction of agricultural produce in market. In the markets, electronic

weighing scale, are provided. In order to facilitate farmers and as provided in

the Act, payment of agricultural produce is made within 24 hours. Market

information Display Boards are provided to know details of arrivals, prices,

etc. So also E-trading Terminals (MCX/NCDEX) are provided. Details of entry

and exit of each and every vehicle in the market complex are recorded.

Electronic open auction system will be set up.

d) Commitment of APMC:

MAPMC is committed to develop infrastructure by investing in PPP mode. It

also committed to set up electronic auction system on the basis of Flower

Market at Netherlands. It also willing to undertake market reforms by adopting

model byelaws so as to have fare competition and equal level playing field in

trade and practices. It will also adopt various modalities for smooth flow of

funds and its proper utilization as provided in the Act.

e) Outsourcing-

So far as outsourcing of various services, Services such as Security,

Canteens, Drinking Water, Gardening, Garbage disposal, etc. are looked after

by private agencies appointed for the purpose by MAPMC.

23

CHAPTER– 2

Literature Review & Research Gap Identified

2.1 INTRODUCTION

Indian agriculture has greatly contributed to foreign trade even in its traditional

form. Indian Agricultural products have been facing stiff competition from

Asian countries for quite some times. Due to globalisation and liberalised

regime, this competition is likely to increase further and new initiatives in

agriculture development shall have to meet the emerging challenges. The

performance of agriculture after integration with the world markets is linked to

the success of exports. In its bid to increase overall exports, the government

of India has decided to achieve this objective by giving a push to production

and export of agricultural commodities. Agriculture has been a source of

foreign exchange for India in the past. Most of the export earnings of

agriculture came from the conventional items such as tea, cashew and spices.

India's share in the world agricultural exports is very low in many items. Until

the beginning of the early seventies India has been an importer of a number

of agricultural commodities. With the exception of a few commodities like rice,

cotton, tea, coffee, oilseeds, oil cakes, tobacco and spices, the share of

agricultural export of India in total world trade was very insignificant. The

share is particularly low in the world trade of fish, meat, chicken, vegetables

and fruits. India has made substantial strides in the total world production of

many commodities.

However, its share in the export market is relatively very small. The pertinent

questions of marketable surplus and export surplus are ailing the export

potentials of Indian agricultural products. Nevertheless, the country has made

phenomenal efforts in enhancing the agricultural exports.

24

According to AMIT SRIVASTAVA | Tue, 6 Dec 2016, DNA

APMC export complex at Vashi struggles to crack a deal

There are no takers for the export complex constructed by the Agriculture

Produce Market Committee (APMC), Mumbai, with traders claiming that the

price fixed by the administration .i.e. Rs 6.7 crore for each unit is not feasible.

Administration failed to attract even a single trader for the state-of-the-art

export complex at Vashi.

According to the traders, the APMC administration has quoted a high price for

each unit of the export complex, which is not feasible for them to buy. A total

of 12 units have been constructed, with each unit being of 6,500 sq metre

area in a ground-plus-three-storey building. Each unit has a separate elevator,

power supply sub station, cold storage and enough space for an office.

The APMC administration, however, maintained that the rate for each unit had

been decided based on ready reckoner rate of the area.

Traders alleged that APMC had been formed to facilitate trade of agricultural

produce, but it was acting as a trader. ―The APMC should work on no profit no

loss principle. Unfortunately, it has been working as a developer and has fixed

an exorbitant price for the export centre,‖ said Mangesh Patil, a mango

exporter.

According to sources, APMC has spent around Rs 5.54 crore on each unit of

the export complex. ―The administration wants to sell each unit by keeping a

profit margin, and that is why they fixed the price of each unit at Rs 6.7 crore,‖

said an administrative official, requesting anonymity.

The administration has failed to attract even a single trader in consecutive e-

tenders over the past seven months.

http://www.dnaindia.com/authors/amit-srivastava

25

According to Ashok Valunj TNN | Dec 29, 2016, IST

Navi Mumbai: Vashi APMC traders incur 20 per cent losses

NAVI MUMBAI: Wholesale traders at the Vashi APMC market say they are

concerned over incurring 20 per cent losses in business on an average even

50 days after demonetisation.

As business in perishables goods such as vegetables and fruits is mainly

done through cash, experts say the market has failed to revive despite a good

harvest. The cap on cash withdrawal has been a major hurdle to both

wholesale and retail traders for payment to labourers.

"Farmers would rarely visit the APMC market from far-flung areas such as

Pune, Sangli, Satara, Nashik and Nagpur to collect their bills since we would

transfer their payment through RTGS. With a cap on withdrawal, they have

begun to approach us directly for cash but we are unable to pay them. They

don't understand a cashless system," said Ashok Valunj, a trader.

Despite a bumper production, supply has exceeded demand due to the cash

crunch, say traders. "Homemakers feel the pinch due to unavailability of lower

denomination notes, which has slowed down business. We definitely lose

business to limited cash flow," said RajendraGavai, a vegetable trader. Sanjay

Pansare, former APMC director and fruits trader, said, "Business is yet to

reach its pre-demonetisation level. We are bearing the brunt of almost 50%

losses in the fruit market."

According to By Faisal Tandel | Posted 11-Jul-2016

Mumbai: Pay more for vegetables as traders to go on 'mass leave'

Residents of Mumbai, Navi Mumbai and Thane, will have to spend more

money on vegetables, groceries, spices and fruits from tomorrow as about

5,000 traders from the Agriculture Produce Market Committee (APMC) market

in Sanpada, Navi Mumbai, are going on ‗mass leave‘ in response to the state

government‘s amendments to the APMC Act.

26

Normally fruits, vegetables, onions, potatoes, spices and groceries are first

brought to the APMC market and sold to retailers and local markets. On July

5, the government came up with an amendment stating that the traders who

sell inside the market should pay the tax, pay the mathadikamgar, and also

commission to the APMC for the commodities. But a trader can also sell the

same product outside the APMC market and doesn‘t have to pay any such

charges.

According to Insights · published November 20, 2014 ·

updated November 20, 2014

APMC Act and Related Issues are: -

1. Government policies and interventions for development in various

sectors and issues arising out of their design and implementation.

2. Welfare schemes, mechanisms, laws, institutions and bodies

constituted for the protection and betterment of these vulnerable

sections.

3. Issues related to direct and indirect subsidies and minimum support

prices; Public Distribution System.

Nageshwara et al (2009)

India is amongst top ten producers in the world for rice, buffalo milk, wheat,

cow milk, fresh vegetables, sugar cane, potatoes, groundnut, pepper mint and

buffalo meat. The technological developments, macro-economic reforms and

Uruguay Round Agreement have contributed to the changes in agricultural

trade. The progress of agriculture has made a lot of changes in the net trading

position of India.

http://www.insightsonindia.com/author/vinay-g-b/

27

Mathur, Das, and Sircar (2006)

The study identifies factors that affect agricultural growth and analyses

constrains that have affected its growth in the sector. There has been a

decline in growth rate of the agriculture sector during the 1990 till the recent

past. This is accompanied with recent decline in yields per hectare for a

number of food crops. There are vast inter-state differences in growth rate of

agriculture and even more so for food grains. The analysis at the all India

level for the period 1990-91 to 2003-04 suggests that government expenditure

in agriculture including public investment and subsidy for fertilizer usage and

electricity consumption for agriculture are the main factors affecting

agricultural production in India. At the same time, the state – wise analysis

from the panel regression result shows that the agricultural output at current

prices is significantly and positively dependent on government expenditure on

agriculture, fertilizer usage, rainfall and population.

2.2 Gaps Identified

According to the Literature Review, there is no study conducted on

various issues and challenges faced by the agriculture SMEs in Export Market

with Special Reference to Vashi APMC Market, NaviMumbai.

Also the expectation of exporters from APMC in the market driven

economy are missing.

28

CHAPTER– 3

Objectives, Scope and Research Methodology

3.1 Purpose of the Study

APMC have manifold role to play as a catalyst in promoting exports. It not

only constructs a platform for the exporters to redress their problems and

suggestions to the concerned authority but also penetrate new markets for

Indian products. Representations of APMC are well received by the

Diplomats, Governments in India and abroad. Having a wide global network,

APMC provide reciprocal trade promotion activities for the benefits of Indian

exporters.

The purpose of the study is to understand the role and activities of:

Department of Commerce, Government of India

To study and understand APMC Market role and activities to be

performed

3.2 Scope of the Study

1. The scope of the research study has been done by selecting 25 Export

Traders.

2. Exploratory and Qualitative Research has been carried out to

understand the services provided by the APMC.

3. An index of effectiveness and efficiency of the APMC has been

developed based on the ranking obtained under the various

parameters.

Feedback has been obtained through Questionnaire. Based on the feedback,

the index of effectiveness has been worked out.

29

3.3 Objectives of the Study

1. To understand the various issues & challenges faced by Export Market.

2. To understand the nature & the type of business.

3. To understand about the challenges faced by Businessman.

4. To understand the relevant schemes and about the various subsidies

needed to the Businessman.

5. To study the impact or GST on the small business.

3.4 Hypothesis

H01: Majority of exporters perceive that APMC are not performing the role of a

catalyst in promoting export.

H11: Majority of exporters perceive that APMC are performing the role of a

catalyst in promoting export.

H02: Majority of members perceive that APMC are not promoting the Brand

image of Indian Products abroad.

H12: Majority of members perceive that APMC are promoting the Brand

image of Indian Products abroad.

H03: Majority of the exporters perceive that setting up product focused SME by

the Government had no added advantage for the Exporters in increasing

exports.

H13: Majority of the exporters perceive that setting up product focused SME by

the Government had an added advantage to Exporters in increasing exports.

3.5 Research Methodology

a) Secondary Data Collection / Descriptive Survey

Detailed data of the activities including set up, role, services and facilities

offered by the APMC from libraries, annual reports, economic survey and

journals and other public domain avenues are gathered.

30

b) Primary Data Collection / Field Survey

The primary data has been collected by preparing one questionnaire and

group discussion as per the details below:

1. To evaluate the various services and facilities provided by the

Exporters of APMC Market, Vashi NaviMumbai.

2. Suggestions received were further filtered with qualitative research by

attending open house meets and one to one discussion with the

experts.

Research Instruments for Primary data collection are;

1. Direct mailing and handouts of above Questionnaires to the focused

groups.

2. Enablers – Members Directory of the APMC Market, Exporters, Office

of the Micro, Small and Medium Enterprises and other professional

networking forum.

The questionnaire comprised of questions pertaining to;

Brief profile and services provided by APMC Market, Vashi

NaviMumbai.

Brief profile of the exporter of APMC Market, Vashi NaviMumbai.

Evaluation of the following services of APMC Market, Vashi

NaviMumbai.

Export Support Services.

Facility & Infrastructure.

Administration and professional approach.

31

3.6 Sample Size

According to the knowledgeable source there are around 2000 exporters and

only 50 % of them are in regular export business, which includes Status

holders, multi-product merchant exporters and manufacturer exporters. Hence

from the population of 1000 active exporters sample sizes of 10% (i.e. 100

exporters) have been selected on random on APMC Market, Vashi

NaviMumbai basis covering all product groups. More than 60% of the sample

size was from SMEs the rationale behind selecting more SMEs in the sample

size was they contribute more than 50% to total exports.

Type of Sampling – Stratified Random Sampling

3.7 Statistical Analysis of Data

The responses observed from each item in the questionnaire were scored and

tabulated into a master sheet. Data was analysed and interpret with the help

of graph and pie charts.

3.8 Interpretation and Report Writing

The analyzed data were finally interpreted to draw the conclusions and

reported with the objective of the study in view.

3.9 Limitations of the Study

The research is confined to multi-product groups and markets; hence the

findings will be generic in nature.

3.10 Expected benefits of the findings of Research

APMC Market, Vashi NaviMumbai to upgrade their services and

improve their competitiveness.

Exporters will gain knowledge and information for better performance.

State Governments to prepare the export strategy for the State.

Ministry of Commerce to take corrective policy measures.

32

3.11 Probable outcomes of the study

The study will focus on how to enhance the various subsidies provided or

currently needed to them and on various schemes that are provided and

currently needed to them by conducting primary research using a coded

questionnaire targeted at APMC Market, Vashi NaviMumbai Businessman‘s to

get a view point. In addition, secondary research into innovative learning

approaches will help create a well-rounded recommendation of actions to be

taken in order to enhance various subsidies provided or currently needed to

them and on various schemes that are provided and currently needed to

them.

3.12 Usefulness of the study

The study will be of great use to Exporter of APMC Kirana Market Vashi

NaviMumbai. The following aspects will add value to relevant schemes and

about the various subsidies needed to the Businessman.

Focusing on the various Schemes provided to the Exporters of APMC


Focusing on the various Subsidies provided to the APMC Market,

Vashi NaviMumbai.

Focusing on the various Schemes needed to the Exporters of APMC


Focusing on the various Subsidies needed to the APMC Market, Vashi

NaviMumbai.

Provided dedicate pathway that enables exporters to increase their

business domestically and internationally.

The study is nutshell will enable all exporters to assimilate new approaches

and benefits to better resources utilization and higher success rates.

33

Chapter– 4

MUMBAI AGRICULTURAL PRODUCE MARKET COMMITTEE:

An overview

The Mumbai Agricultural Produce Market Committee, Mumbai was

established Under ―The Maharashtra Agricultural Procedure Marketing

(Development & Regulation) Act, 1963‖ on 15-January 1977.

Area of Regulation

Greater Mumbai

Thane Taluka

30 Villages UranTalika (Raigad)

Objectives of APMC

Regulation of marketing of agricultural commodities.

Establishment, maintenance and management of markets.

To protect the interest of farmers.

Dissemination of market related information in respect of production,

storage, transportation, inflow & average rates and movement of

notified Agricultural commodities etc.

CONSTITUTION OF BOARD

12 Elected Agriculturists Members from 6 Regions-

5 Elected Members of Traders

1 Elected Member of Mathadi/Mapadi

5 Government Nominated Members consists of (SC-1, OBC 1, LADIES

2, ST 1)

2 Nominated Members of Mumbai &Navi Mumbai Municipal

Corporations

1 MMRDA

1 Director of Marketing

26 Total Board Members

34

Area of Market Yards

As per CIDCO project land Reserved for MAPMC: 122 Hect

Land handed over to MAPMC by CIDCO on long lease till Date: 70.15

Hect

Land Purchased by MAPMC from other than CIDCO : 2.55 Hect

Land handed over to MAPMC by CIDCO for recreation: 1.62 Hect

Shifting of Wholesale Trade to APMC Complex VASHI


No. Of wholesale Market Yards 7

No. Of galas/shop-cum-godowns 3793

No. Of Auction halls 3

No. Of warehouses 1

No. Of central facility Bldgs. 4

No. Of VyaparBhavan Bldgs. 1

No. Of Exporters Bldgs. 2

No. Of Commercial offices 1369

No. Of Canteens 51

Ripening Chamber for fruits 1

Common toilets 48


35


36



37

Comparative Statement of Market-wise income of Market fee

(Rs. In Lacs)

2011-12 2012-13 2013-14 2014-15 2015-16

6564.54 7453.44 8471.89 6574.62 6511.21

Narration: - (Rs. In Lacs)

The graphical representation of the table shows that in 2011-12 income of

Market fee is 6564.54, in 2012-13 income of Market fee is 7453.44, in 2013-

14 income of Market fee is 8471.89, in 2014-15 income of Market fee is

6574.62, and in remaining 2015-16 income of Market fee is 6511.21.

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2011-12 2012-13 2013-14 2014-15 2015-16

Year Wise Income of Market Fee (Rs. Lakhs)

38

Statement of supervision cost recovered and paid by MAPMC to

state Government of Maharashtra.

(Rs. In Lacs)

2011-12 2012-13 2013-14 2014-15 2015-16

421.63 479.47 560.52 427.61 423.50

Narration: - (Rs. In Lacs)

The graphical representation of the table shows that supervision cost

recovered and paid by MAPMC to state Government of Maharashtra in 2011-

12is 421.63, supervision cost recovered and paid by MAPMC to state

Government of Maharashtra in 2012-13 is 479.47, supervision cost recovered

and paid by MAPMC to state Government of Maharashtra in 2013-14 is

560.52, supervision cost recovered and paid by MAPMC to state Government

of Maharashtra in 2014-15 is 427.61, and in remaining supervision cost

recovered and paid by MAPMC to state Government of Maharashtra in 2015-

16 is 423.50.

0

100

200

300

400

500

600

2011-12 2012-13 2013-14 2014-15 2015-16

Supervision Cost Paid

39


40

Narration: - INCOME 2015-16 (Rs. In Lacs)

The graphical representation of the table shows that Market fee supervision

cost recovered and paid by MAPMC to state Government of Maharashtra is

64%, Lease premium supervision cost recovered and paid by MAPMC to

state Government of Maharashtra is 4%, Service Charges supervision cost

recovered and paid by MAPMC to state Government of Maharashtra is 1%,

License Fee supervision cost recovered and paid by MAPMC to state

Government of Maharashtra is 0%, Interest on investment supervision cost


Vehicle entry fee supervision cost recovered and paid by MAPMC to state

Government of Maharashtra is 2%, Income from property supervision cost


and in remaining Other Income supervision cost recovered and paid by

MAPMC to state Government of Maharashtra is 6%.

INCOME 2015-16

Market fee

Lease premium

Service charges

License fee

Interest on investment

41


Narration: - EXPENDITURE 2015-16(Rs. In Lacs)

The graphical representation of the table shows that Market Expenditure supervision

cost recovered and paid by MAPMC to state Government of Maharashtra is 0%,

Establishment Expenditure supervision cost recovered and paid by MAPMC to state

Government of Maharashtra is 49%, Administrative Expenditure supervision cost

recovered and paid by MAPMC to state Government of Maharashtra is 5%, Tax

Interest Contribution supervision cost recovered and paid by MAPMC to state

Government of Maharashtra is 4%, Market Yard Expenses supervision cost

recovered and paid by MAPMC to state Government of Maharashtra is 22%, and in

remaining Depreciation supervision cost recovered and paid by MAPMC to state

Government of Maharashtra is 20%.

Expenditure 2015-16

MEETING EXPENDITURE

ESTABLISHMENT EXPENDITURE

ADMINISTRATIVE EXPENDITURE

TAX, INTEREST CONTRIBUTIONS

42

India‘s biggest reform to transform the life of a crisis-ridden farmer is 91.6 per

cent behind schedule this year, prompting Prime Minister Narendra Modi to

promise in five months what could not be done over the last 10. As many as

250 agricultural markets nationwide (of 585 selected) were supposed to have

been linked by 2015-16 to a common nationwide electronic platform, but only

21 markets in eight states have been linked - as of March 2016 - to what is

called the National Agricultural Market (NAM) platform. On average, a farmer

gets no more than 10 to 30 per cent of the cost you pay for his produce, as

India Spend has reported, primarily because the farmer cannot sell directly to

consumers and large companies, thanks to an archaic law that delivers

commissions to layers of agents, usually linked to politicians. Despite the slow

progress, the target of linking 585 markets to the NAM by 2018 stays

unchanged, according to this statement issued on April 14, 2016, by the

Ministry of Agriculture. This means that 564 markets must be linked in two

years, 26 times the number (21) linked over the last 10 months. Last week

Prime Minister Narendra Modi promised to link 200 markets over the next five

months.

The NAM platform will allow anyone from any part of India to buy agricultural

produce from any farmer from any part of the country.

Source: Economic Survey of India, 2015-16 Source: Agriculture Ministry, 2015-16

43

The Agricultural Produce Marketing Committee (APMC) Act of a state

regulates the purchase of agricultural products, such as cereals, pulses, fruits

and vegetables for that region. It hobbles farmers, imposing multiple levies on

produce and disallows direct sales to private companies.―The continued

presence of regulations of APMC Acts in most commodities in most states

has compelled the farmer to sell produce only in the government-controlled

marketing yards,‖ said this December 2015 NITI Aayog report, Raising

Agricultural Productivity and Making Farming Remunerative for Farmers.―The

APMC market yards are subject to vast technical as well as marketing

inefficiencies that undermine the prices that farmers receive.‖Bihar is the only

state to have repealed the APMC Act in 2006. Kerala never enacted APMC

legislation, but it did not develop marketing infrastructure either.―APMCs levy

multiple fees, of substantial magnitude, that are non-transparent and hence a

source of political power,‖ said the Economic Survey of 2015-16 (Volume 1,

Chapter 8).

For instance, at the principal market yard for Mumbai city (at Vashi), farmers

must pay 2% commission to agents, who charge further commissions that

range from 6.5% (on onions) to 10% (on vegetables), the survey said.The

southern state of Karnataka has pioneered modern agriculture marketing by

unifying 51 of 155 principal markets state wide in collaboration with the

National Commodity Exchange, a trading platform for commodities.

APMC – The concept

An agricultural produce market committee (APMC) is a marketing board

established by a state government in India. There are 294 APMCs in the State

and function as per the Maharashtra Agriculture Produce Marketing

(Development and Regulation) Act 1963 and Maharashtra Agriculture

Produce Marketing (Development and Regulation) Rule 1967.

44

• Objectives:

1. Ensuring that farmers are not exploited by intermediaries (and money

lenders) who compel farmers to sell their produce at the farm gate for

an extremely low price.

2. Providing a fair mechanism where all food produce should first be

brought to a market yard and then sold through auction.

• Mechanism & its Features:

1. Each state which operates APMC markets geographically divide the

state and markets (mandis) are established at different places within

the state. Farmers are required to sell their produce via auction only at

the mandi in their region.

2. Traders require a license to operate within a mandi. Wholesale and

retail traders (e.g. shopping mall owners or mom-pop retailers etc) and

food processing companies cannot buy produce directly from a farmer.


45

Objectives / Suggested improvements to avoid shortcomings in current

APMC system

1. Provide remunerative price to farmers and to reduce uncertainties in

production & consumption of farming products.

2. Ensuring that end consumers are charged fair price even while

producers get fair compensation and strengthening efficiency of supply chain

network from producer to consumer via APMC.

3. Strategically change the middle man centric present system to farmer

& consumer centric system.

4. Use of efficient information system with a robust IT backbone to

achieve Supply chain improvements using effective distribution and stabilizing

demand by using efficient cold storage facilities.

5. MSP (minimum support price) effective usage for normalizing and

balancing demand-supply.

6. Include ‗facilitating organization of farmers markets‘ under the

permitted list of corporate social responsibility (CSR) activities under

Companies Act 2013, to encourage companies engaged in agri-allied

activities, food processing etc. to take up this activity under CSR and also

help in setting up supply chain infrastructure. This would be similar to the e-

Choupal initiative of ITC Ltd., but under CSR.

7. We have included a comparative study of APMC model followed by the

neighbouring Karnataka state as of the one prevalent in Maharashtra in Vashi.

Major improvements are drawn from such a comparison. In the next phase of

our study, the systems followed by other state governments in Tamilnaidu in

terms of establishing Cold storage facilities, also. This will help us understand

the salient features in normalizing availability of agri-commodities, throughout

the year.

46

Case Study- Mumbai Vashi APMC

Introduction:

1. The APMC (Agricultural Produce Market Committee) Vashi market, one of

the largest markets in India is in and around Sector 19 of Vashi. There are a

staggering 3700 godowns, 1500 commercial blocks, 4 large auction halls, 2

giant warehouses, and 5 large wholesale market yards. Apart from this, there

are big processing centers - a vapour heat treatment plant, ripening facilities,

cold storage facilities, an export facilitation center and so on.

3. Every day, nearly 1,800 tonnes of vegetables — enough to provide 90

grams to each of the 2.02 crore residents of Mumbai, Thane and Navi

Mumbai — roll into the yard from vegetable producing areas like Nashik,

Pune, Satara, Sangli and other parts of Maharashtra as well as from outside

the state.

5. The produce is sold by auction and the prices are noted and managed

by the APMC. It is the committee's responsibility to ensure that sales do not

take place below the minimum price fixed by the government. They are also

responsible for ensuring fair measurement and weighing, and fair charges for

labour.

5. As per rules, the farmer has to pay APMC a sum ranging from 0.2 % to 2

% as fee for facilitating the sale of his produce. After separation, the stock is

then sold with the help of commission agents, who charge anywhere between

eight to 15 per cent from the farmer for helping him sell his produce, as

against the allowed two to eight per cent.

6. The wholesalers who buy the produce then ferry the produce to the

retailer who then sells it to consumers. Along the chain, the farmer seems to

come off as the worst affected. By the time the produce reaches the

consumer, the price is inflated by almost 60 per cent and the middle men at

various stages take the cut.

47



48

Karnataka APMC Model Salient Feature

Karnataka government had taken a major issue in the agricultural

marketing sector by establishing Rashtriya e- Market Services Limited

(ReMS), a joint venture of Karnataka Government and NCDEX Spot

Exchange Limited and has emphasized the importance of Leveraging

technology in agriculture marketing system.

The ReMS claims to offer complete technology and management solution

for modernizing markets in state & operating the markets at par with

international practices.

The iAgriMarC™ APMC Management Software Suite is aimed at

automating the entire Gate-to-Gate operations as well as Check-post

management and outside-mandi purchases of APMC Mandi's. The base

product is modeled as per the Agriculture Produce Markets Law, 1961

passed by the Central Government of India.

The unified market has integrated some 51 markets so far and aims at

covering all the 155 main market yards as well as 354 sub-yards of

Karnataka state.

From the day of launch (February 22, 2014), 7.5 lakh lots of trading has

been done on the platform with 45 lakhs bids being made with total

transaction on platform of worth Rs. 15000 crore.

It has accommodated lakhs of farmers,31473traders & 17149 commission

agents for all the 92 regulated commodities.

49


Analysis of Proposed supply chain at APMC – Vashi Lets consider for

our analysis Tomato Introduction:

1. Total area under Tomato Cultivation in Maharashtra is 35000 Ha.

2. Tomato Growing Districts in Maharashtra are Nashik, Pune, Nagpur,

and Ahmednagar.

3. Mainly tomato is Rabbi Crop but in Maharashtra it also comes in Kharif

crop category at some locations.

4. We selected Pimpalgaon village in Nashik District which is roughly 200

km far from APMC- Vashi Market.

5. Out of 50 farmers in village 20 farmers decided to do Tomato farming

from mid of June to September ending & next three months i.e. October,

November & December are harvesting period.

50



51

Chapter – 5

MUMBAI STATE AGRICULTURAL MARKETING BOARD:

An overview

MSAMB Profile

The Maharashtra State Agricultural Marketing

Board (MSAMB), Pune was established on 23rd,

March 1984, under section 39A of Maharashtra

Agricultural Produce Marketing (Development &

Regulation) Act, 1963. MSAMB has done

pioneering work in the field of Agricultural

Marketing in the State and achieved success in

various areas. MSAMB is having an important

role in developing and coordinating agricultural

marketing system in the State of Maharashtra.

Agriculture Produce Market Committee

REGULATION

Agriculture produce means all produce (whether processed or not) of

agriculture, horticulture, animal husbandry, pisciculture and forests as

specified in the schedule.

The APMCs were established by the State Govt. for regulating the marketing

of different kinds of agriculture and pisciculture produce for the same market

area or any part thereof.

The Maharashtra Agricultural Produce Marketing (Development & Regulation)

Act was passed in the year 1963, with a view to regulate the marketing of

agricultural and pisciculture produce in market areas.

52

Constitution: Every market shall consist of:

Agriculturists residing in the market area and being 21 years of age on the

date specified from time to time by the Collector in this behalf.

Traders and commission agents holding license to operate in the market

area.

Chairman of the co-operative society doing business of processing and

marketing of agriculture produce in the market area.

Chairman of the Panchayat Samiti within the jurisdiction in which the market

area is situated, President or Sarpanch of the local authority within the

jurisdiction of which the principal market is situated.Deputy Registrar of Co-

operative Society of the district, the Assistant Cotton Extn. Officer or where

there is no such officer the district Agriculture Officer of the Department of

Agriculture.

Objectives:

It shall be the duty of the Market Committee to implement the provisions of the

Maharashtra Agricultural Produce Marketing (Regulation) Act 1963, the rules

and bye-laws made there under in the market area to provide such facilities

for marketing of agricultural produce therein as the Director may from time to

time, direct do such other acts as may be required in relation to the

superintendence, direction and control of markets or for relating marketing of

agricultural produce in any place in the market area and for purpose

connected with the matters aforesaid, and for that purpose may exercise such

powers and perform such duties and discharge such functions as may be

provided by or under this Act.

The Act provides for establishment of Market Committees in the State. These

Market Committees are engaged in development of market yards for the

benefit of agriculturists and the buyers. Various agricultural produce

commodities are regulated under the Act. At present there are 305 APMCs

with main markets and 603 sub markets.

53

Division wise break-up of APMCs are as follows:

Source: https://www.msamb.com/apmc/default.htm

Classification of APMCs (2015-2016)

Source: https://www.msamb.com/apmc/default.htm

BUDGET:

As per provision of section 38 of the Maharashtra Agricultural Produce

Marketing (Regulation) Act 1963, and the Maharashtra Agriculture Produce

Marketing (Development & Regulation) rule 1967-rule 112 (1) every Market

Committee shall submit their budget to the Marketing Board for sanction

before 31st January of every year.

The State Marketing Board after due scrutiny, sanctions the budget with or

without modifications within one month from the date of receipt thereof. It

includes the original budget, supplementary and reappropriation budget.

https://www.msamb.com/apmc/default.htm

54

The budget is prepared in the prescribed format developed by the State

Marketing Board. The budget includes all the items of revenue and

expenditure (including administrative expenditure, and development

items).The Marketing Board has delegated powers to its following officers to

sanction the budget.

Budget of APMC

Source: https://www.msamb.com/apmc/budget.htm

LOAN TO APMC

Source: https://www.msamb.com/apmc/loan.htm

55

As a supplement to the finance of APMC, the Maharashtra State Agricultural

Marketing Board gives some amount as loan to enable APMCs to undertake

developmental programmes. However, MSAMB insists on availing loans

from Banks by the APMCs for their development programmes. The

development works include land, drinking water facility, compound wall,

gate, internal roads, electrification, auction halls and platform, godowns,

computers, weigh bridges, farmers hostel, hamal bhavan, trader's and

commission agent's shops, etc. The loans are sanctioned as per the norms

prescribed by MSAMB.

APMCs submit the loan applications with details, which are being processed

at the head office. As per the rules of the Marketing Board, the rate of

interest for development works except construction of shopping complex,

are as follows:

The APMC has to submit a loan proposal along with the following

documents: Loan application in the prescribed form, Loan repayment

agreement, Loan hypothecation agreement & APMC Director Body‘s

Indemnity Bond, Sanction from competent authority for building plan &

layout, and Approval under section 12(1).

The repayment period of loan provided for the following development works

is as follows:

Source: https://www.msamb.com/apmc/loan.htm

https://www.msamb.com/apmc/loan.htm

56

During last 25 years (i.e. from 1985 to March 2014), the Marketing Board

has disbursed an loan amount of Rs 164.48 Crore to 236 APMCs in the

State, out of which, the outstanding amount as on 31st March 2014, is Rs.

51.08 Crore.

CONTRIBUTION

As per provision of section 37 (2) of the Act, every market committee has to

pay an annual contribution to the Marketing Board, on the basis of their

income. The Govt. of Maharashtra wide notification no.

APM\1085\6568\621\11-c Dated - 04/04/1988 has specified the following

rates of contribution.

Contribution of APMC

Source: https://www.msamb.com/apmc/contribution.htm

As per the provision of section 37(2) of the Act, every APMC shall, out of

market fund, pay within two months, from the date of expiry of previous

year, to the Marketing Board the annual contribution as fixed by the Govt. as

per the above notification.

During 2013-14 as per income out of 305 APMCs, contribution of 275

APMCs was fixed to Rs.34.18 crores.

https://www.msamb.com/apmc/contribution.htm

57

EXPORT PROMOTION

MSAMB has the program to promote exports of fresh fruits, vegetables &

flowers from Maharashtra to the various countries of world with the help of

farmers & their organizations. The main products handled are grapes,

mangoes, pomegranate, mandarin, banana, rice, mango pulp, cashew nut,

cut flowers (from polyhouse) etc.

Regular guidance to the farmers and their cooperative societies is given in

terms of pre-harvest, post-harvest, packaging, pre-cooling, cold storage and

transportation. To boost the exports, MSAMB also provides infrastructure

facilities viz. Air Cargo handling at Pune and Vapour Heat Treatment at

Vashi, Navi Mumbai. MSAMB also establish a modern packhouse including

pre-cooling, cold storage and Ripening chamber facility for Alphanso

Mangoes at Jamsande, Tal-Devgad (Sindhudurg), Ratnagiri and at Jalana

for Kesar Mangoes while a modern onion export facility was created at

Indapur (Dist-Pune) with the help of APEDA, New Delhi. These facilities can

be useful for farmers/growers and expoters in the state. Trial exports are

being conducted for certain commodities by the MSAMB with the help of

APEDA, New Delhi.

Following products can be made available from the farmers' co-operative

societies for export as well as for domestic marketing.

Source: https://www.msamb.com/export/pramotion/default.htm

58

ACHIEVEMENTS

MSAMB is a state level organization working in the field of export of various

fresh fruits, vegetable & processed food products since last twenty five years.

We have experience of export of fruits & vegetable to Europe, USA, South

East Asian Countries, Japan, and Middle East Countries etc. Export can

provide better option for the marketing of the agro commodities & provides

the alternative way of utilization of surplus production.

Some of the remarkable achievements can be enlisted as under:

Commercial & trial export

Implementation of subsidy scheme for GlobalGAP certification.

Erection and successful utilization of Export Facility Centres for various

commodities in the state.

Participation in various International Commodity Specific Promotion

Programs.

Successful implementation of Agri Export Zones of Alphonso Mango,

Kesar mango, Onion, Pomegranate, Banana & Mandarins.

Nodal Agency for implementation of Asian Development Bank & IFAD

funded projects in Maharashtra.

Successfully organized Farmers‘ Foreign Study Tour to Israel &

Europe.

Mango Export:

Mango, called the king of fruits in India, accounts for 40 percent of the

national fruit production of 22.168 million MTs a year. The main strength of

the Maharashtra state lies in the cultivation of the popular exportable varieties

e.g. Alphonso, Banganpalli, Kesar, etc., with substantial production and

significant share in mango export. Alphonso & Kesar are the major

commercially varieties grown in Maharashtra. MSAMB has leading role in

export of mangoes to various countries across the globe.

59

MSAMB has conducted the trials for exporting mangoes by CA containers to

far distant markets with the help of APEDA, New Delhi and exported two

containers of Alphonso and Kesar mangoes to UK and one container to

Singapore in the year 1998. One more CA container of Kesar was exported

successfully in the year 2000. MSAMB has exported Kesar mangoes to

Hongkong, which is further exported to china. This is new opportunity to

Kesar mango growers in the form of new market. After long & continuous

efforts, the Japanese market opened for Indian mangoes in June, 2006. A

small quantity was exported in that year after processing of mangoes in

MSAMB‘s Vapor Heat treatment (VHT) Machine. Later on lot many exporters

registered with MSAMB for use of VHT machine for export of their mangoes

to Japan and around 26 Mts of mangoes were processed and exported to

Japan. In the mango season around 13+ MTs of mangoes were processed in

MSAMB‘s VHT facility centre and exported to Japan. MSAMB has exported 8

consignments to Japan in the mango season 2008. USA is the bigger and

reliable market for Indian mangoes. After 18 years of span, Indian mangoes

were allowed in USA market in the month of May 2007. MSAMB exported 13

consignments to USA in the mango season 2008 through various ports like

Newyork, Atlanta, Sanfrascisco etc. MSAMB has promoted the partnership

organization of primary co-operative societies named ―Maha mango‖ for

export promotion of mangoes.

Grape Exports:

The MSAMB promoted an organisation called MAHAGRAPES to boost the

export of grapes. MAHAGRAPES is regularly exporting around 100-120

containers to Europe and Middle East. They could establish their brand in the

European markets.

MSAMB also helped farmers co-operative societies to establish their own

pre-cooling and cold storage units, by providing them technology and

guidance. From the year 2003 the Packhouses which are being used for

Grape export are recognised by APEDA.

60

Pomegranate Exports:

Pomegranate is another important fruit grown in Maharashtra. Its usage and

medicinal properties made this fruit mote important and gradually increasing

demand in the international markets like Europe & USA.

MSAMB has taken a lead and successfully exported the pomegranate

containers to UAE. Initally the demand was only in Gulf countries, however

MSAMB realized the need of the export oriented infrastructure for

pomegranate and with the help of APEDA, MSAMB has established the

export facility centers for pomegranate at BaramatiDist: Pune and at

IndapurDist: Pune and being utilized these centers by private exporters and

around 1500+MTs of pomegranate have been exported majorly to European

countries in the period of 8 months.

Mandarin Exports:

The Nagpur mandarin is a loose Jacket orange and to ensure that it reaches

distant markets with least post-harvest losses during shipping, it must be

devoid of pre-harvest infection by fungal organisms and skin attachments

must be tight for prolonged shelf life. The Nagpur mandarin has unique

features easily separable skin and segments from each other, comparatively

low seed content and low acids. An export of mandarins from India is not a

common phenomenon. In the history for the first time one trial container of

Nagpur Mandarins was sent to UAE in the year 2002, and it reached in very

good condition.

MSAMB has exported one container of Nagpur mandarins to Holland in the

year 2005 and achieved good results. To have export worthy quality, MSAMB

has taken initiatives and establishing export oriented infrastructure in

mandarin producing belt.

61

Banana Exports:

In spite of the huge production of banana in the state of Maharashtra, the

export is negligible. MSAMB is the pioneer of export of banana from

Maharashtra state. For the first time One 40‖ container was exported in the

year 2002 to UAE and the results are very encouraging. MSAMB has

exported the banana 16 MT in Feb'2005 to Dubai through 40' Refer container

from Mahabanana, Jalgaon. But still there is need of improvement in pre

harvest-post harvest management practices in banana. For the same

MSAMB is working by setting up of export facility centers in the banana

growing area. MSAMB has taken initiatives and setting up of export facility

centers for Banana at Raver, Dist. Jalgaon and Basmatnagar, Dist. Hingoli

which includes mechanical handling system, pre-cooling, cold storage and

ripening chamber.

Lemon and Sweetlime Export:

MSAMB has exported Lemons and Sweet Lime through mix container to

Dubai. Through this trial export we realized that there is a better scope of

export of Lemon and Sweetlime in Gulf countries.

Flower Export:

MSAMB is exporting Gerbera and Carnation flowers through 5 air

consignments to Singapore. This export is the lighthouse for export of flowers

from Maharashtra. There is much more scope for Roses, Gerbera and

Carnation flowers from Maharashtra.

62

International Commodity Specific Promotion Programs:

MSAMB always focus on promotion of various agricultural commodities

grown in the state, domestically and internationally. MSAMB used to

participate in the export promotional activities worldwide. Considering this

concept, MSAMB has participated in various international exhibitions which

can be listed as under:

1. Mango Promotion Program, Germany

2. AnugaFoodtech, Germany

3. Mango Promotion Program, London

4. Mango Promotion Program, China

5. Mango Promotion Program, Japan

Similarly MSAMB has sent the delegation to various countries to study the

modern agricultural production systems, post harvest technologies, potential

markets etc. This can be enlisted as under:

1. Visit to The Netherlands (Flower Market)

2. Visit to Australia & New Zealand

3. Visit to Singapore, Malaysia &Hongkong

4. Visit to South Africa

63

A. Facilities underutilization:

B.

MANGO EXPORT FACILITY CENTER AT NACHNE TAL & DIST:

RATNAGIRI :

Address and Contact Number:

MSAMB‘s Mango Export Facility Center,

Shantinagar, Nachane Road, Tal. & Dist. Ratnagiri

Telefax: 02352-228377

Contact Person: Mr.Milind Joshi (Cell No: 9422392238)

64

Source: https://www.msamb.com/export/facilities.htm

APEDA & USDA-APHIS approved pack house.

MANGO EXPORT FACILITY CENTER AT JAMSANDE TAL: DEOGAD

DIST: SINDHUDURG



A/P. Jamsande,

Tal. Devgad, Dist. Sindhudurg

Tel: 02352-228377

Fax: 02352-228165

Contact Person: Mr.Milind Joshi (Cell No: 9422392238)


APEDA & USDA-APHIS approved packhouse.

KESAR MANGO EXPORT FACILITY CENTRE, JALNA, DIST – JALNA



APMC Area,

Jalana, Dist. Jalana

Tel: 02482-242636 /0240-2334168

65


APEDA & USDA-APHIS approved packhouse.

VAPOUR HEAT TREATMENT (VHT) FACILITY

MSAMB‘s Vapour Heat Treatment Facility Centre

NiryatBhavan,

Vegetable Market, APMC Premises,

Sector 19,

Vashi, Navi Mumbai

Tel: 022-27840211

Fax: 022-27840837 (C/o.)

Contact Person: Mr.MangeshKadam (9969407030);Mr.Abhimanyu Mane

(9869993017)

Golden Opportunity For Exporters of Fruits & Vegetables

MSAMB with the help of APEDA has set up temperate control pack house

along with packing line, pre cooling and cold storage at Vashi, Navi Mumbai

for the exporters. The exporter can use this facility for different fruits and

vegetables in the mechanized pack house and enhance the shelf life of the

products.

66

Facility includes packing line which is mainly

useful for round fruits. The products get

automatically washed, dried, graded without

touching.

The processed products then can be pre cooled

with ultra-modern facility at reasonable rates.

The temperate can be maintained in between

1°C to 15 °C along with humidity.

The product then can be stored in the cold

storage for maintaining the cold chain. The

container can be stuffed at this facility.

Besides this, Vapour Heat Treatment facility has

been set up with the help of APEDA, New Delhi.

The machine has been imported from Japan. To

export different fruits & vegetables to Japan, it is

mandatory to treat the fruits & vegetables

through this facility. After treatment, produce can

be exported to Japan.

VHT is an effective, non-chemical method of

treatment to get rid of the oriental fruit fly problem

in fruits and vegetables. In VHT the produce is

held at a pre-determined temperature for a fixed

time (using a hot water - steam vapour system)

so as to destroy all the stages of fruit fly.

Mangoes, Melon, Papaya, Guava and various

vegetables are treated in VHT. The MSAMB and

APEDA have jointly set up the first semi-

commercial VHT facility at APMC Mumbai, Vashi,

Navi Mumbai. The VHT facility is set up as a

common service facility and an R & D tool. The

VHT is useful in controlling oriental fruit fly in

fresh fruits & vegetables, especially the Alphonso

and Kesar variety of mango for export.

VHT is a mandatory requirement while exporting to Japan.

The VHT machine is procured from M/s Sanshu Sangyo Co. Ltd., Japan by APEDA. The trial runs

carried out jointly by experts from APEDA and MSAMB have been successful. This VHT machine is

being utilised commercially since June 2006. The private exporters are using this machine for

processing of their mangoes for export to Japan. In the year 2006, only a few quantity was exported.

In the year 2007 around 26+ MT of mangoes were processed. In year 2008 around 13+ MT

mangoes were processed & exported to Japan.

67

APEDA & Dept. of Plant Quarantine, Govt. of Japan approved packhouse.

POMEGRANATE EXPORT FACILITY CENTRE, JALOCHI, (BARAMATI)

DIST – PUNE


MSAMB‘s Pomegranate Export Facility Center,

A/P. Jalochi,

Tal. Baramati, Dist. Pune

Tel: 02112-209718

Contact Person: Mr. Ajay Kudale (9422234653)


FRUIT & VEGETABLE EXPORT FACILITY CENTRE, INDAPUR, DIST –

PUNE


MSAMB‘s Fruit & Vegetable Export Facility Center,

Shivleela Nagar, IndapurAkluj Rd.,

Indapur, Dist. Pune-413106

Contact Person: Mr. Ajay Kudale (9422234653)

https://www.msamb.com/export/facilities.htm

68


BANANA EXPORT FACILITY CENTRE AT BASAMAT DIST: HINGOLI


BANANA EXPORT FACILITY CENTRE AT SAVADA TAL: RAVER DIST:

JALGAON





69

B. Facilities under erection:

KESAR MANGO & POMEGRANATE EXPORT FACILITY CENTER,

LATUR


VAPOUR HEAT TREATMENT FACILITY CENTRE, NAVI MUMBAI


ONION EXPORT FACILITY CENTER, KALWAN, DIST. NASIK





70

GLOBALGAP CERTIFICATION FOR GOOD AGRICULTURAL

PRACTICES:

Introduction:

Due to global expansion in food trade, the World Trade Organization (WTO)

has set as one of their objectives the opening up of trade between countries

and aims to address restrictive trade barriers. Sanitary and phyto-sanitary

(SPS) issues have always been important in global trade and have become

one of the most important potential Technical Barriers to Trade (TBT). Pests

or pathogens may exist in one country but not in another, thus ultimately

resulting in restrictive TBT. In addition, food safety has become one of the

most important minimum requirements for future trade with developed

countries. The rapid increase in newly reported cases of outbreaks of food-

borne diseases particularly associated with fresh produce has been the

primary drive towards establishing minimum food safety standards. To be

part of global trade in fresh produce and food related products it will in future

require compliance to some kind of food safety assurance system. The

global drive towards ensuring safe food supplies must also be seen as part

of the focus on food security. Safe food must be ensured in both developed

and developing countries and appropriate legislation needs to be put in

place to address these concerns. The global emphasis on safe and secure

food supplies must also be seen against a backdrop of an increasing

number of immuno-compromises people (i.e. HIV / AIDS) as well as

increased outbreaks of diseases such as cholera and typhoid, particularly in

developing countries, which are often causes by inadequate sanitary

measures and contaminated drinking water. With respect to developed

countries such as the European Union, the importance of food safety was

emphasized by the recent outbreaks of BSE (Mad Cow disease) and Food

and Mouth disease as well as traditional concerns with environmental

pollution, particularly pesticides and the issues surrounding Genetically

Modified Organisms (GMO). In contrast to this, the main focus of concern in

the United States of America is the reported outbreaks of food borne

diseases often associated with the consumption of fresh or processes food.

71

In this scenario the importance of microbial contamination is of major

concern and has been the driving force behind the establishment of the USA

Good Agricultural Practices (GAP) policies and surveillance systems.

Currently, there are numerous systems that growers can adopt to ensure

safe food production, which include amongst others Good Agricultural

Practices (GAP), Good Manufacturing Practices (GMP), Hazard Analysis

Critical Control Points (HACCP), Good Hygiene Practices etc.

One of the GAP systems that have taken off within the European community

is GLOBALGAP. Apart from Germany and France, most other countries

within the EU support this system, as do the major retailers, which consider

it the minimum standard for food trade. It is important to note that these

global standards will hopefully be harmonized but for the time being, major

retailers will still have their own set of requirements that growers will have to

adhere to.

EUREPGAP CERTIFICATION

GLOBALGAP started as a retailer initiative in 1997 with major inputs and

support from the chemical companies.

GLOBALGAP was established by the Euro-Retailer Produce Working

Group (EUREP) with the aim of setting standard and procedures for the

development of GAP.

Objectives of EUREPGAP

The main objective of GLOBALGAP is, to lead the system to an EN 45011-

based accredited certification system, referring to the cope of "GLOBALGAP

Fruits and Vegetables".

Partners from the entire food chain for fruit and vegetable production have

agreed upon the GLOBALGAP certification document and procedures,

which were achieved after extensive consultation over a three-year period.

72

Benefits–

Certification to GLOBALGAP will become mandatory as from March 2003

for farms growing produce for export to Europe, although the EC may allow

some latitude in this regard. At this point in time different certification

systems could be required for export to other countries such as the USA,

and Australia. As Europe is our largest export destination, GLOBALGAP

certification will in all likelihood become a minimum requirement for entry

into the EU market. However, it should be kept in mind that additional

retailer requirements will still have to be met.

Discussions are already underway to ensure harmonization between the

different food safety schemes and benchmarking will be essential to link the

various systems. While certification to GLOBALGAP will result in additional

costs to growers, there will be numerous benefits. Long-term benefits

include more motivated farm workers due to improved facilities, training and

better working conditions with a subsequent increase in living standards.

This would obviously also result in better productivity and outputs to the

ultimate benefit for the grower.

Other benefits include –

More environmentally sound farming practices,More judicious use of

chemicals and;Most importantly a cost benefit to the grower due to better

management practices enforced by the standard.It is important to note that

GLOBALGAP only covers produce up to the farm gate and thereafter other

systems such as GMP, HACCP etc. will become essential. All food

industries must also implement GMP and GHP, both of which are

prerequisite programs for HACCP. The South African fish industry,

represent a classical case study in terms of its adoption of HACCP.

73

List of GLOBALGA certification agencies in India –

GLOBALGAP has recognised this need and intends to provide input from the experiences

gained in other sectors to draw similar draft documents. Approved Certification Bodies :-

Source: https://www.msamb.com/export/globalgap.htm

74

KESAR MANGO – GLOBALGAP Certificates received under Primary

Marketing Organization (PMO) – 10

Source: https://www.msamb.com/export/globalgap_certificate.htm

https://www.msamb.com/export/globalgap_certificate.htm

75

AGRI EXPORT ZONE

- Jaggery

With the objective of promoting greater exports of fresh and processed

agricultural produce from the country the Government of India (GoI) has

announced the creation of Agri Export Zone (AEZ). The scheme is

implemented by the Ministry of Commerce, GoI, through APEDA (the

Agriculture and Processed Food Export Development Authority), New Delhi

– the nodal agency for AEZ. The AEZ is expected to give a focus and

direction for exports of key agricultural produce with potential from the

country. It involves a detailed action plan for the development of a specified

geographic area /s for effecting systematically greater exports of a specific

produce.

Under the AEZ all aspects of agriculture such as production, research,

development, extension, post-harvest management and marketing are

addressed in a focused manner for successful implementation. For instance

modern production practices are introduced for production of exportable

quality produce and improved productivity. There is an emphasis on setting

up of appropriate produce-specific post-harvest infrastructure and introduce

post-harvest practices, right from farm all the way to market. Another

important area of focus under AEZ is marketing, market promotion and

market development for Indian produce.

The need for market oriented research, development and extension

activities have been recognized under the AEZ and appropriate activities

proposed to achieve both near term and long term goals of the Indian export

industry. All this is achieved under AEZ by instituting appropriate

interventions at the Government level and producer-exporter level.

In this context, the State of Maharashtra has added nearly 10 lacs Ha.

Under Horticulture over the past 10 years. Production from 50% of this

newly added area is expected to start yielding in the next few years.

76

This will mean substantially greater potential for marketing of horticulture

produce from the State with possibility for greater export, Keeping this in

mind, the State of Maharashtra, the leading State in exports of fresh and

processed fruits and vegetables from the country today, has identified eight

potential horticultural crops of commercial importance for AEZ. Creation of

AEZ will give required momentum for steady and systematic growth of

exports of these produce from the State.

Under AEZ a number of specific activities or interventions, agency

responsible for implementation and funding needs have been identified.

Interventions are suggested in the areas of production, post-harvest

management, marketing and research and development areas.

Responsibility for coordination lies with the nodal agency, the Maharashtra

State Agricultural Marketing Board.

The nodal agency with support and cooperation from the Department of

Horticulture, the Department of Agriculture, the Department of Industries,

the Department of Finance, Maharashtra State Electricity Board (MSEB)

and other agency/agencies would implement the AEZ in a time bound and

effective manner. Requirement of funds under AEZ are proposed to be met

from private and co-operative sector with subsidies/grants from Central and

State Government and loan availed from bank and financial institutions.

Agri Export Zones in Maharashtra and implementing agencies

Source: https://www.msamb.com/export/default_aez.htm

77

BE AN EXPORTER

Establishment of Firm

For import or export of any item, Import - Export Code (IEC) is mandatory. For

availing IEC, establishment needs to be registered with appropriate

authorities‘ viz. Proprietorship / Partnership / Private Limited Company /

Public Limited Company / Co-operative Society / Farmer Producer

Organization /Trust etc. IEC can be availed on individual name also. Current

Account in any Nationalized / Scheduled Cooperative / Multinational Bank,

having a foreign exchange facility, is required in the name of establishment.

Formats can be downloaded from website http://dgft.delhi.nic.in/ and

download option ANF 2 A.

Import - Export Code (IEC)

IEC can be obtained on submission of information in prescribed formats (Part

A& Part D) completed filled and signed addressed to ―Joint Director General

of Foreign Trade‖ (JDGFT), Pune / Mumbai / Nagpur.

Set of SELF CERTIFIED documents should be enclosed with application as

follows:

1. Firm / Establishment registration certificate - Photo copy

2. Permanent Account Number (PAN) from Income Tax Department –Photo

copy (with Front / Back )

3. Banker's certificate in Part ‗B‘.

4. Two Passport size photographs of the Chairperson / Proprietor of the

establishment. Photos pasted on the Bank Certificate should be endorsed by

the bankers.

5. Demand Draft of Rs. 500/- favouring ―Joint Director General of Foreign

Trade‖ payable at Pune or Mumbai or Nagpur as per the jurisdiction.

78

6. RBI / NRI Declarations on Letterhead (As per the formats)

7. Memorandum and Articles of Association for Pvt Ltd Companies, Partner

Ship Deed for Partnership Companies etc.

8. A4 Size Two Envelopes &Rs. 50/- Postal Stamp.

9. MSAMB charges Rs. 500/- to farmers, Rs. 1000/- to cooperative

organizations &Rs. 2000/- to private exporters (plus 14.5% Service tax)

towards guidance fees.

The forms completely filled in all respects to be submitted in ONE copy to

Joint Director General of Foreign Trade at the addresses given below, by

hand or by post (Registered AD).

How to locate Importer?

An importer can be located through various searches. Following sources will

be helpful to find such importers.

Agricultural and Processed Food Products Export Development Authority

(APEDA),

Indian Trade Promotion Organisation (ITPO)

Mahratta Chamber of Commerce, Industries and Agriculture (MCCI&A)

After getting this information,

Exporter can directly approach to the importer with the details of product, rate,

packing etc. through fax / email and negotiate further to finalize the order. If

necessary, samples should be forwarded to the importer and it should

represent the material.

79

Mode of payment

Normally in the trade of agro exports (accept onion, rice, other cereals, mango

pulp), importer normally don‘t provide Letter of Credit (L/C). Such export is

done on consignment basis (payment as per actual sales). Exporters get the

payment after deducting port charges, transportation and commission etc. of

the importing country. In certain countries export is undertaken on fixed rates.

Market Credit of the importer should be checked before entering into the

trade. Importer's credit can be checked by international credit organizations

viz. Dun and Bradstreet.

Export Credit Guarantee Corporation of India (www.ecgc.in) ECGC also

undertakes such type of credit certification work along with Credit Insurance.

Trade for products like onion, rice, cereals, processed products is done

through Irrevocable 100% Letter of Credit (L/C) at site.

Customs / Excise Formalities and charges

For agro exports, excise stuffing is mandatory in producing area. Accordingly

stuffing permission can be availed from Local Excise authorities.

Understand the importers need

Quality parameters such as size, packing, temperature requirements should

be obtained from the importer before packing of the product. It is better to get

requirement from the importer in writing. Pack the material strictly as per the

samples provided to the importer. Confirm the standards of raw material,

packaging material with the importer‘s requirement.

80

Procedure of shipment

Services of Customs House Agents (CHAs) to be booked to carry out

necessary logistics and paperwork required for export. Job like space booking

for air exports, order for the container, custom clearance, certificate of origin

etc. is carried out by CHA. An efficient and competent CHA should be

appointed. Following is the list of documents required to be provided to CHA.

Letter of Credit (If available)

Invoice

Packing List (If items are more)

Certificate of origin.

Phytosanitary certificate–Can be availed from Directorate of Plant

Protection, Quarantine and Storage, Ministry of Agriculture.

Air transport charges are normally five times costlier than sea

transport. Perishable commodities like:

Sales Proceed:

Sales proceed gets deposited in the bank in foreign currency. Exporter gets

the amount in Indian rupees after conversion of the foreign currency. Bank

also deducts the commission from the converted amount. Bank also intimated

the exporter about the arrival of Foreign Exchange and generates Bank

Realization Certificate (BRC). Export documents including Shipping Bills,

Export Promotion (EP) copy should be retained by exporter. Credit worthiness

of the importer is of most importance. If by any chance the amount gets stuck

by any chance, the issue can be followed up with the help of ECGC or any

private Debt Collection Agency (DCA). Such agencies are available

worldwide. D&B is also working as DCA.

The exporter has to prepare Invoice while exporting the produce. The sample

for the same is as follows:

81

INVOICE FORMAT

Exporter : Address of the Exporter

Phone Fax No.

Invoice No.

Date

Exporters Ref.

Buyer's Order No. Date Other

reference(S)

Consignee : Address of the Importer

Phone Fax No.

Buyer (If other than consignee) N.A.

Pre Carriage by Place of Receipt of

per carrier

Country

of Origin

of

Goods

Country of Final

Destination

Vessel/Freight

No.

Port of Loading Terms of Delivery and Payment

Port of Discharge Final Destination

Marks No. Description

Nos./cont. Goods

no. & Kind of

package

Quantity Gr.

Wt.

Rate US$

/ carton

Amount

US$

TOTAL NT WT : F O B

GR WT. : FREIGHT

AWB/B/L NO. :

C

&

F

Total

Amount Chargeable: (In words)

Declaration

We declare that this invoice shows the

actual price of the goods described and

that all particulars are true and correct.

FOR <Name of the exporter>

Signature & Date,

Authorised Signatory,

82

FARMING

MSAMB has 150 Acres of land at Talegaon Dabhade, near Pune, Which is

being used for Training and Demonstration purpose. This land is divided into

two farms known as Main Farm and Gilbil Patti. The details of these two farms

are as follows:

Source: https://www.msamb.com/activities/farming.htm

Main Farm

The Total area under main farm is 100 acre, out of which 42 acre is under

natural lake, which is used for aqua culture and irrigation. 30 acre is cultivable

area.

Gillbill Patti

The Total area under Gilbill Patti farm is 50 acre, out of which 18 acre is under

NIPHT (Horticulture Training Centre) 22 acres under Horticulture crops, viz,

10 acre Guava, 2 acre Sapota, 8 acre Mango, 1 acre Aonla, 1 acre Coconut.

https://www.msamb.com/activities/farming.htm

83

Chapter – 6

History of APMC Market Mumbai

Agricultural Produce Market Committee (APMC) is a statutory market

committee constituted by a State Government in respect of trade in certain

notified agricultural or horticultural or livestock products, under the Agricultural

Produce Market Committee Act issued by that state government.

6.1 Vashi APMC: The trade hub that feeds Mumbai

Spread over a sprawling 122 hectares, the Mumbai Agricultural Produce

Market Committee at Vashi is entry point of all foodgrains and vegetables

meant for the extended region of Metropolitan Mumbai.

Every day, nearly 1,800 tonnes of vegetables — enough to provide 90 grams

to each of the 2.02 crore residents of Mumbai, Thane and Navi Mumbai — roll

into the yard from vegetable producing areas like Nashik, Pune, Satara,

Sangli and other parts of Maharashtra as well as from outside the state.

"The supply centres of vegetables change with season. At times, almost 80

per cent of the produce could be from the state. It can, however, dip to as low

as 40 per cent at times with vegetables coming from outside the state,"

Avinash Patil, deputy secretary of the APMC, said.

These vegetables ferried by farmers are then weighed and sorted in the yard

according to their quality. As per rules, a committee of APMC officials, traders

and farmers are supposed to grade the quality of the produce.

Farmers complain that only a part of this lot is graded, in violation of the rules.

As per rules, the farmer has to pay APMC a sum ranging from 0.2 % to 2 %

as fee for facilitating the sale of his produce.

84

After separation, the stock is then sold with the help of commission agents,

who charge anywhere between eight to 15 per cent from the farmer for

helping him sell his produce. Under the existing rules, they are supposed to

take only between 2 to eight per cent.

Interestingly, under the Model APMC Act, the central government has stated

that no commission should be taken from the farmer.

The wholesellers who buy the produce then ferry the produce to the retailer

who then sells it to consumers. Along the chain, the farmer seems to come off

as the worst affected. There could be a price difference of almost 60 per cent

by the time the product reaches a consumer.

Development OF “APMC” (THE AGRICULTURAL PRODUCE MARKET

COMMITTEE)

There is running 101 year of co- operative activities in all over India. The main

aim of co- operative committee is to help the members or people and doing

the social activities.

In past, when the APMC was not created, there were several difficulties of

farmers to sell his agricultural products, because of the lack of the market for

selling the agricultural products.

If the farmers sell his product without the market they face many problem

related with transport, protection of product etc or raise the many complain

related with merchant. To solve this problem, some people were gathered and

decided to create the committee for relating to farmers, merchant and other

people. Then finally established the APMC in 1953 with Rs. 6267.74 income

and Rs. 1345.06 permanent fund.

The first chairperson of the committee was Shri. Dr.Hariprasad V. Bhatt. To

start this committee with aim to solve the farmers complains against the

merchant and to give the proper price of the farmer‘s products.

85

Now this committee completed 54 years and come in 55 years and his

development is very good during the 54 years. This is the appreciated aspect

of this committee.

The APMC created in 1952 the growth of this committee is very slow

comparing to others committee. But in last 16 months the young chairperson

Mr.P.P.Sojitra develops the APMC, which had not done in last 54 years. The

development is as under.

1. The APMC arrange the shades to protect the farmer‘s products.

2. The R.C.C. road arrange in all market ground.

3. The shops and godown arrangement for merchant.

4. The dining hall and canteen facility is also providing.

5. In farmer rest house it is providing facility like hotel in nominal charge.

6. The ambulance service is starting with nominal charge Rs. 3-/ per km

for farmers, merchants and whole district by APMC.

7. The farmer Information center is also start for giving the different

information to farmers relating to farming.

8. The cotton laboratory is arranged to know the cotton quality for

merchants and farmers.

6.2 Principles

APMC operate on two principles:

Ensure that farmers are not exploited by intermediaries (or money

lenders) who compel farmers to sell their produce at the farm gate for an

extremely low price.

All food produce should first be brought to a market yard and then sold

through auction.

86

6.3 Features

Each state which operates APMC markets geographically divide the state and

markets (mandis) are established at different places within the state. Farmers

are required to sell their produce via auction at the mandi in their region.

Traders require a license to operate within a mandi. Wholesale and retail

traders (e.g. shopping mall owners) and food processing companies cannot

buy produce directly from a farmer.

Some of the salient features of the APMC Model Act 2003 are as follows 1)

Facilitates Contract farming model 2) Special market for perishables 3)

Farmers, private persons can setup own market 4) Licensing norms relaxed

5) Single market fee 6) APMC Revenue to be used for improving market

infrastructure. However, not all States have passed the bill. Some States have

passed but neither framed rules nor notified it. Thus, inter-state barriers

continue. Further, Union Budget 2015 proposed to create United National

Agriculture Market with the help of State Government and NITI Ayog.

Examples within states:

Karnataka

The state government of Karnataka has created APMCs in many towns to

enable farmers to sell their produce at reasonable prices. Most APMCs have

a market where traders and other marketing agents are provided stalls and

shops to purchase agriculture produce from farmers. Farmers can sell their

produce to agents or traders under the supervision of the APMC.

Farmers cannot sell produce outside the APMC mechanism. However, the

government is now encouraging direct selling through 'Rautu Bazar' or to

supermarkets directly. The present APMC system makes farmers vulnerable

to traders' and marketing agents' price manipulations. The Government of

India is considering improving the APMC Act to benefit all parties involved.

https://en.wikipedia.org/wiki/Karnataka

https://en.wikipedia.org/wiki/Government_of_India



87

Maharashtra

The Maharashtra State Agricultural Marketing Board runs 295 APMCs

in Maharashtra, under the APMC Act enacted by the Government of India. In

July, 2016, the Maharashtra State Government removed fruits and vegetables

from the purview of the APMCs. The state government has urged the farmers

to directly bring their produce for sale in Mumbai. Of the 307 APMCs in the

state, 219 are operating, The government has granted 148 Direct Marketing

Licenses of which 91 are for fruits and vegetables. The Pune APMC,

meanwhile, appealed to the farmers from the state as well as from outside to

bring their produce to the market and sell those directly.

Tamil Naidu

In Tamil Nadu, the Tamil Nadu State Agricultural Marketing Board is the

regulatory board for agricultural markets which is successfully running since

1977. 21 Market committees are established for every notified area and 277

Regulated Markets are functioning under these committees for better

regulation of buying and selling of agricultural produce.

6.4 Export and Import Act

The exports and imports activities contribute significantly towards the healthy

growth of any economy. Imports imply bringing of goods into the country to

fulfil the domestic need and when the country supplies surplus goods to

foreign countries, it is termed as exports. When a wide gap between the

exports and imports rate arises then serious economic problems like inflation

and Balance of Payment weakens the integrity of the existing economy. Thus

for maintaining appropriate balances between exports and imports the state

authority has forged various types of legal frameworks in terms of different

Acts and policies.

https://en.wikipedia.org/wiki/Maharashtra

https://en.wikipedia.org/wiki/Tamil_Nadu

https://en.wikipedia.org/wiki/Tamil_Nadu_State_Agricultural_Marketing_Board

88

In India there are several Acts and policies enacted to have a uniform practice

in export & import trade practices. Among those Acts, Imports and Exports

(Control) Act 1947, Foreign Trade (Development and Regulation) Act 1992

and Import- Export (Exim) Policy 1997-2002 are few significant Acts and

policies. Import export act was introduced by Government during Second

World War and it lasted for around 45 years and in June 1992 this act was

superseded by the Foreign Trade (Development & Regulation Act), 1992. The

basic objective of this new act was to give effect to the new liberalized export

and import policy of the Government.

The Foreign Trade (Development and Regulation) Act 1992 has empowered

the Government to:

Enact provisions related to development and regulation of trades for

domestic as well as international market.

Restrict and regulate all forms of exports and imports in case of

requirements and declare tariff exemption by accessing special needs.

Announce an EXIM policy and its episodic amendments by notification.

Authorise the concerned officials to issue „Importer Exporter Code.

Number (IEC) to the exporters and importers.

Till 1985 annual policies were made but from 1985-92, three year policy was

made and then 5 year policy was made coinciding with 5 year plans. 1992-97,

1997-02, 2002-07(2004-09); and 2009-14.

89


90


91


92


93

Chapter – 7

Contribution of APMC to India‟s Export Growth

Achievements OF ―APMC‖ (THE AGRICULTURAL PRODUCE MARKET

COMMITTEE) & Achievements:

The words awards and achievements are the same meaning but it quit

different. Awards means medal or shield for some achievement. So it‘s

combined words.

The APMC is not a trading firm or company but a committee for farmers. It

protects the farmer and give him the sufficient price of its products it is the

biggest achievement. Now a day the quality is the important things and in

every field it is very important for firm or company or committee.

The committee gets ISO 9001-2000 certificate from ICS (International

Certification Services (Asia) Pvt. Ltd.) for complying with the requirements of

the following international standard and this committee is the first in India to

get this certificate. Scope: Provides service and liaison to farmers,

Commission agent and businessman for agriculture, produced crops sale and

purchase as per market value.

Agricultural Produce Market Committee (APMC) is a statutory market

committee constituted by a State Government in respect of trade in certain

notified agricultural or horticultural or livestock products, under the Agricultural

Produce Market Committee Act issued by that state government.

APMCs are intended to be responsible for:

ensuring transparency in pricing system and transactions taking place in

market area;

providing market-led extension services to farmers;

94

ensuring payment for agricultural produce sold by farmers on the same

day;

promoting agricultural processing including activities for value addition in

agricultural produce;

Publicizing data on arrivals and rates of agricultural produce brought into

the market area for sale;

Setup and promote public private partnership in the management of

agricultural markets

There are about 2477 principal regulated markets based on geography (the

APMCs) and 4843 sub-market yards regulated by the respective APMCs in

India.

The typical amenities available in or around the APMCs are: auction halls,

weigh bridges, godowns, shops for retailers, canteens, roads, lights, drinking

water, police station, post-office, bore-wells, warehouse, farmers amenity

center, tanks, Water Treatment plant, soil-testing Laboratory, toilet blocks, etc.

Legal Background of APMCs

Under Constitution of India, agricultural marketing is a state (provincial)

subject. While intra-state trades fall under the jurisdiction of state

governments, inter-state trading comes under Central or Federal Government

(including intra-state trading in a few commodities like raw jute, cotton, etc.).

Thus, agricultural markets are established and regulated mostly under the

various State APMC Acts.

Most of the state governments and Union Territories have since enacted

legislations (Agriculture Produce Marketing Committee Act) to provide for

development of agricultural produce markets and to achieve an efficient

system of buying and selling of agricultural commodities. Except the States of

Jammu and Kashmir, Kerala, Manipur and small Union Territories such as

Dadra and Nagar Haveli, Andaman and Nicobar Islands, Lakshadweep, etc.

all other States and UTs in the country have enacted such State Marketing

95

Legislations. The purpose of these Acts is basically the same i.e. regulation of

trading practices, increased market efficiency through reduction in market

charges, elimination of superfluous intermediaries and protecting the interest

of producer-seller.

The whole geographical area in the State is divided and each one is declared

as a market area which is managed by the Market Committee (APMC)

constituted by the State Government. States also constitute a Market Board

which supervises these market committees. APMCs generally consist of

representatives of farmers, traders, warehousing entities, registrar of

cooperative societies etc. Market Boards generally consists of chairmen of all

APMCs, representatives from the relevant Government Departments etc.

Once a particular area is declared as a market area and falls under the

jurisdiction of a Market Committee, no person or agency is allowed to freely

carry on wholesale marketing activities. APMC Acts provide that first sale in

the notified agricultural commodities produced in the region such as cereals,

pulses, edible oilseed, fruits and vegetables and even chicken, goat, sheep,

sugar, fish etc., can be conducted only under the aegis of the APMC, through

its licensed commission agents, and subject to payment of various taxes and

fee. The producers of agricultural products are thus forced to do their first sale

in these markets.

The main differences in Acts of different states/UTs are noted in the

following areas:-

Commodity coverage –

A few states cover all the commodities while others provide the list.

Market Committee –

There are differences in no. of market committees and number of members

therein, the appointment of committee members etc.

96

Agricultural Marketing Boards –

Variations in powers exercised by the Boards in different states i.e. their role

vary from advisory to binding.

Demarcation of functions between Director Marketing and Board –

Administrative structure for the implementation structure of the Act vary from

state to state in terms of functions assigned.

Functioning of APMCs: Issues involved-

The APMC system was introduced to prevent distress sale by farmers to their

creditors, to protect farmers from the exploitation of intermediaries and traders

and to ensure better prices and timely payment for their produce through the

auctions in the APMC area. However, APMC Acts restrict the farmer from

entering into direct contract with any processor/ manufacturer/ bulk processor

as the produce is required to be routed through these regulated markets.

Over a period of time, these markets have acquired the status of restrictive

and Monopolistic markets, harming the farmers rather than helping them to

realise remunerative prices.

The APMC Act treats APMC as an arm of the state and the market fee as the

tax levied by the state, rather than as a fee charged for providing services,

which acts as a major impediment in creating a national common market.

Various taxes, fees/charges and cess levied on the trades conducted in the

markets or Mandis are also notified under the APMC Act.

APMCs charge a market fee from buyers, and a licensing fee from the

commissioning agents who mediate between buyers and farmers. They also

charge small licensing fees from a whole range of functionaries (warehousing

agents, loading agents etc.).

In addition, commissioning agents charge commission fees on transactions

between buyers and farmers. The levies and other market charges imposed

by states vary widely. Statutory levies/mandi tax, VAT etc. all add up to hefty

http://arthapedia.in/index.php?title=Mandi

97

amounts, create market distortions with cascading effects and strong entry

barriers. Further, multiple licences are necessary to trade in different market

areas in the same State.

All this has led to a highly fragmented and high-cost agricultural economy,

which prevents economies of scale and seamless movement of agri goods

across district and State borders.

APMC operations are hidden from scrutiny as the fee collected, which are at

times exorbitant, is not under State legislature‘s approval. Agents in an

APMC may get together to form a cartel. This creates a monopoly (a market

situation where there is only one buyer who then exercises control over the

price at which he buys) situation. Produce is procured at manipulatively

discovered price and sold at higher price, defeating the very purpose of

APMCs. Further, APMCs play dual role of regulator and Market.

Consequently, their role as regulator is undermined by vested interest in

lucrative trade. Generally, member and chairman are nominated/elected out

of the agents operating in that market.

Exporters, processors and retail chain operators cannot procure directly from

the farmers as the produce is required to be channelized through regulated

markets and licensed traders. There is, in the process, an enormous increase

in the cost of marketing and farmers end up getting a low price for their

produce.

Monopolistic practices and modalities of the state-controlled markets have

prevented private investment in the sector. Thus, the monopoly of

Government regulated wholesale markets has prevented development of a

competitive marketing system on a pan-India basis, providing no help to

farmers in direct marketing, organizing retailing, a smooth raw material supply

to agro-processing industries and adoption of innovative marketing system

and technologies.

98

Model APMC Act of 2003

An efficient agricultural marketing is essential for the development of the

agriculture sector as it provides outlets and incentives for increased

production and contribute to the commercialization of subsistence farmers.

Worldwide Governments have recognized the importance of liberalized

agriculture markets. Keeping, this in view, Ministry of Agriculture formulated a

model law on agricultural marketing - State Agricultural Produce Marketing

(Development and Regulation) Act, 2003 and requested the state

governments to suitably amend their respective APMC Acts for deregulation

of the marketing system in India, to promote investment in marketing

infrastructure, thereby motivating the corporate sector to undertake direct

marketing and to facilitate a national market.

The Model APMC Act, 2003 provided for the freedom of farmers to sell their

produce. The farmers could sell their produce directly to the contract-sponsors

or in the market set up by private individuals, consumers or producers. The

Model Act also increases the competitiveness of the market of agricultural

produce by allowing common registration of market intermediaries.

Salient Features of the Model APMC Act:

The Preamble of the Act is to provide for development of efficient

marketing system, promotion of agri-processing and agricultural exports and

to lay down procedures and systems for putting in place an effective

infrastructure for the marketing of agricultural produce.

Legal persons, growers and local authorities are permitted to apply for the

establishment of new markets for agricultural produce in any area. Under the

existing law, markets are setup at the initiative of State Governments alone.

Consequently, in a market area, more than one market can be established by

private persons, farmers and consumers.

http://agmarknet.nic.in/amrscheme/modelact.htm#Background



99

There will be no compulsion on the growers to sell their produce through

existing markets administered by the Agricultural Produce Market Committee

(APMC). However, agriculturist who does not bring his produce to the market

area for sale will not be eligible for election to the APMC.

Separate provision is made for notification of ‗Special Markets‘ or ‗Special

Commodities Markets‘ in any market area for specified agricultural

commodities to be operated in addition to existing markets.

A new Chapter on ‗Contract Farming‘ added to provide for compulsory

registration of all contract farming sponsors, recording of contract farming

agreements, resolution of disputes, if any, arising out of such agreement,

exemption from levy of market fee on produce covered by contract farming

agreements and to provide for indemnity to producers‘ title/ possession over

his land from any claim arising out of the agreement.

Provision made for direct sale of farm produce to contract farming

sponsor from farmers‘ field without the necessity of routing it through notified

markets.

Provision made for imposition of single point levy of market fee on the

sale of notified agricultural commodities in any market area and discretion

provided to the State Government to fix graded levy of market fee on different

types of sales.

Licensing of market functionaries is dispensed with and a time bound

procedure for registration is laid down. Registration for market functionaries

provided to operate in one or more than one market areas.

Commission agency in any transaction relating to notified agricultural

produce involving an agriculturist is prohibited and there will be no deduction

towards commission from the sale proceeds payable to agriculturist seller.

100

Provision made for the purchase of agricultural produce through private

yards or directly from agriculturists in one or more than one market area.

Provision made for the establishment of consumers‘/ farmers‘ market to

facilitate direct sale of agricultural produce to consumers.

Provision made for resolving of disputes, if any, arising between private

market/ consumer market and Market Committee.

State Governments conferred power to exempt any agricultural produce

brought for sale in market area, from payment of market fee.

The State Agricultural Marketing Board made specifically responsible

for:

Setting up of a separate marketing extension cell in the Board to provide

market-led extension services to farmers;

Promoting grading, standardization and quality certification of notified

agricultural produce and for the purpose to set up a separate Agricultural

Produce Marketing Standards Bureau.

Funds of the State Agricultural Marketing Board permitted to be utilized for

promoting either on its own or through public private partnership, for the

following:

market survey, research, grading, standardization, quality certification, etc.;

Development of quality testing and communication infrastructure.

Development of media, cyber and long distance infrastructure relevant to

marketing of agricultural and allied commodities.

As per the final report of the Committee of State Ministers, in-charge of

Agriculture Marketing to Promote Reforms, submitted in January 2013, only

16 States have amended their Act and only six states have notified the

amended Rules. There are some States which do not have APMC Act and

some have partially amended their Act.

http://agmarknet.nic.in/stminprreform.pdf

101

Karnataka Model provides for a single licensing system, offers automated

auction and post auction facilities. It also facilitate warehouse-based sale of

produce, facilitate commodity funding, prices dissemination by leveraging

technology and private sector investment in marketing infrastructure.

The Model APMC Act does not go far enough to create a national or even

state level common market for agriculture commodities. The Act retains the

mandatory requirement of the buyers having to pay APMC charges even

when the produce is sold directly outside the APMC area.

Though the Model Act provides for setting up of markets by private sector, this

is not adequate to create competition even within the state since the owner

will have to collect fees/taxes on behalf of the APMC in addition to their own

charges.

Suggestions in Economic Survey 2014-15 to Create a National Common

Market in Agricultural Commodities:

The Economic Survey 2014-15 emphasizes on the need for a national

common agricultural market (a Budget Announcement of 2014-15) and

identifies un-integrated and distortion ridden agricultural market as the one of

the most striking problems in agriculture growth.

The Economic Survey suggests 3 incremental steps as possible solutions for

setting up a national market.

It may be possible to get all States to drop fruits and vegetables from

APMC schedule of regulated commodities and followed by other

commodities.

State governments may be specifically persuaded to provide policy support

for alternative or special markets in private sector.

http://indiabudget.nic.in/

102

In view of the difficulties in attracting domestic capital for the setting-up

marketing infrastructure, liberalization in FDI in retail could create possibilities

for filling in the massive investment and infrastructure deficit in supply chain

inefficiencies.

As a last resort, the Economic Survey suggests using Constitutional

provisions to create a national common market for agricultural commodities.

Economic Survey reemphasize that India needs a national common market

for agricultural commodities by making the Agricultural Produce Market

Committee just one among many options available for the farmers to sell their

produce.

The National Agricultural Market (NAM)

Union Budget 2014-15 (para 82) and Union Budget 2015-16 (para 33) had

suggested the creation of a National Agricultural Market (NAM) as a priority

issue. On 2 July 2015, Union Cabinet unveiled its plan to go ahead with the

project amidst the constitutional constrains as mentioned above.

The National Agriculture Market is envisaged as a pan-India electronic trading

portal which seeks to network the existing APMCs and other market yards to

create a unified national market for agricultural commodities. NAM is a

―virtual‖ market but it has a physical market (mandi) at the back end. NAM is

proposed to be achieved through the setting up of a common e-platform to

which initially 585 APMCs selected by the states will be linked. The Central

Government will provide the software free of cost to the states and in addition

a grant of up to Rs. 30 lakhs per mandi will be given as a onetime measure for

related equipment and infrastructure requirements. In order to promote

genuine price discovery, it is proposed to provide the private mandis also with

access to the software but they would not have any monetary support from

Government.

http://indiabudget.nic.in/budget2014-2015/index.asp

http://indiabudget.nic.in/

http://www.arthapedia.in/index.php?title=The_National_Agricultural_Market_(NAM)

103

Chapter– 8

Data Interpretations and Major Findings of the Research

1. Nature of the Business?

Particulars Percentage (%)

Vegetable 15

Fruits 15

Food Grains 5

Nuts 15

Dry Fruits 30

Any Other 20

Narration: -

The graphical representation of the table shows that out of 100 respondents,

15 are in Vegetable business, 15 are in Fruit business, 5 are in Food grains

business, 15 are in nuts business, 30 are in Dry Fruits business, and

remaining20 are doing other businesses.

0

5

10

15

20

25

30

35

Vegetable Fruits Food Grains

Nuts Dry Fruits Any Other

Percentage (%)

104

2. What is your monthly turnover of your business firm?


Between Rs. 10 - 20 Lakhs 10



Rs. 50 Lakhs & More 40

Narration: -


10 respondents monthly turnover is Between Rs. 10 - 20 Lakhs, 20

respondents monthly turnover is Between Rs. 20 - 40 Lakhs, 30 respondents

monthly turnover is Between Rs. 40 - 50 Lakhs, and remaining 40

respondents monthly turnover is above 50 Lakhs.

0

5

10

15

20

25

30

35

40

Between Rs. 10 - 20 Lakhs



Rs. 50 Lakhs & More

Percentage (%)

105

3. Does your firm import/export to other countries?


Yes 100

No 0

Narration: -


100 Percent of respondents are in Export / Import Business none of the

respondents are in job doing work.

0

10

20

30

40

50

60

70

80

90

100

Yes No

Percentage (%)

106

4. If your firm import then products that they input?


Vegetable 0

Fruits 5

Food Grains 5

Nuts 10

Dry Fruits 30

Any Other 50

Narration: -


Zero number of respondents are importing Vegetable outside the country,

Five number of respondents are importing Fruits outside the country, Five

number of respondents are importing Food grains outside the country, Ten

number of respondents are importing Nuts outside the country, Thirty number

of respondents are importing Dry Fruits outside the country, and remaining

Fifty Number of respondents are importing other kind of goods outside the

country.

0

10

20

30

40

50

60



Percentage (%)

107

5. Annual value of import?


Between 1 Crore to 3 Crore 20



5 Crore& Above 30

Narration: -


20 respondents annual value of import is Between Rs. 1 Crore to 3 Crore, 30

respondents annual value of import is Between Rs. 3 Crore to 4 Crore, 20

respondents annual value of import is Between Rs. 4 Crore to 5 Crore, and

remaining 30 respondents annual value of import is 5 Crore& above.

0

5

10

15

20

25

30

Between 1 Crore to 3

Crore


Crore


Crore

5 Crore & Above

108

6. Countries from where they import?


UAE 20

Iran 25

Iraq 25

Others 30

Narration: -


20 numbers of respondents are importing their goods from UAE, 25 number of

respondents are importing their goods from Iran, 25 number of respondents

are importing their goods from Iraq, and remaining 30 number of respondents

are importing their goods from other countries.

0

5

10

15

20

25

30

UAEIran

IraqOthers

Percentage (%)

109

7. If your firm export then products that they output?


Vegetable 15

Fruits 15

Food Grains 5

Nuts 5

Dry Fruits 20

Any Other 40

Narration: -


15 number of respondents are exporting Vegetable outside the country, 15

number of respondents are exporting Fruits outside the country, 5 number of

respondents are exporting Food grains outside the country, 5 number of

respondents are exporting Nuts outside the country, 20 number of

respondents are exporting Dry Fruits outside the country, and remaining40

Number of respondents are exporting other kind of goods outside the country.

0

5

10

15

20

25

30

35

40

45



Percentage (%)

110

8. Annual value of export?





5 Crore& Above 30

Narration: -


20 respondents annual value of export is Between Rs. 1 Crore to 3 Crore, 30

respondents annual value of export is Between Rs. 3 Crore to 4 Crore, 20

respondents annual value of export is Between Rs. 4 Crore to 5 Crore, and

remaining 30 respondents annual value of export is 5 Crore& above.

0

5

10

15

20

25

30


Crore


Crore


Crore

5 Crore & Above

111

9. Countries to where they export?


USA 30

China 20

UAE 30

Others 20

Narration: -


30 number of respondents are exporting their goods to USA, 20 number of

respondents are exporting their goods to China, 30 number of respondents

are exporting their goods to UAE, and remaining 20 number of respondents

are exporting their goods to several other countries.

0

5

10

15

20

25

30

USA China UAE Others

Percentage (%)

112

10. What are the challenges you are facing while import/export?


Yes 83

No 17

Narration: -


83 Percent of respondents are facing problems while Export / Import of goods

and remaining17 percent of the respondents are not facing any problems

while Export / Import of goods.

Yes

No

83

17

113

11. What type of help do you get from the government?


Trading 15

Financing 5

Documentation 10

Bank Support 35

Transportation 30

Any other 5

Narration: -


15 number of respondents are getting Trading as an help from the

government, 5 number of respondents are getting Finance as an help from

the government, 10 number of respondents are getting Documentation as an

help from the government, 35 number of respondents are getting Bank

Support as an help from the government, 30 number of respondents are

getting Transportation as an help from the government, and remaining 5

number of respondents are getting other kind of help from the government.

0

5

10

15

20

25

30

35

40

Percentage (%)

114

12. Are you aware of any promotional efforts due by the government to

help in import/export?


Yes 2

No 98

Narration: -


only 2 Percent of respondents are aware of promotional efforts taken by the

Government and remaining 98Percent of the respondents are not aware of

any promotional efforts taken by the Government.

0

10

20

30

40

50

60

70

80

90

100

Yes No

Percentage (%)

115

13. Do you think it is beneficial to have clusters like the APMC Market

which will help in promoting import/export?


Yes 98

No 2

Narration: -

The graphical representation of the table shows that out of 100

respondents,98 Percent of respondents are beneficial to have clusters like the

APMC Market which will help in promoting export/import of goods and

remaining 2 Percent of the respondents are not beneficial to have clusters like

the APMC Market which will help in promoting export/import.

0

10

20

30

40

50

60

70

80

90

100

Yes No

Percentage (%)

116

14. The government of India is emphasising on the ―Make in India‖

concept. What challenges do you see in the ―Make in India‖ concept

becoming a reality?


Yes 5

No 95

Narration: -


only 5 Percent in reality of respondents are facing challenges due to ‗Make in

India‘ concept brought by an Indian government and remaining 95 Percent in

reality of respondents are not facing any kind of challenges due to ‗Make in

India‘ concept brought by an Indian government.

0

10

20

30

40

50

60

70

80

90

100

Yes No

Percentage (%)

117

15. The Government has recently passes the ‗GST‘ Bill. Do you think the

‗GST‘ bill is useful to you?


Yes 80

No 20

Narration: -


80 Percent of respondents are saying that ‗GST‘ bill is useful to expand their

Export/Import of goods business and remaining 20 Percent of respondents

are saying that ‗GST‘ bill is not useful to expand their Export/Import of goods

business.

0

10

20

30

40

50

60

70

80

Yes No

Percentage (%)

118

Chapter–9

Recommendations and Conclusions

APMC should create more focused and cohesive efforts to help and assist

exporters to penetrate into new markets and support them wherever

necessary. The ultimate result of this should be to make India stand in the

forefront in creating the Brand India concept of the government, based on the

policy announcements. Another important point is that the APMC should act

as a catalyst for timely disbursement of the incentives falling under their

purview. Additional incentives announced under the special focus initiative as

per the policy for both focus products and focus markets are made available

to all the eligible exporters well in time and this will be a highly motivating

factor for the exporters. APMC should also understand that any delay

happening in disbursement of the incentives or delay in recommending for the

same will result in exporters losing faith in the government and their

announcements. Hosting an interactive website, and more focussed

newsletters providing the changes in various laws/ statutes affecting

exports/imports of different countries and also regularly updating the website

with such changes will be a welcome measure as this helps to keep the

exporters abreast of the basic information. APMC should add quality

improvement in their agenda in conducting training and updating programme

in the commercial fields. Risk management and mitigation of risk, spreading

the importance of various insurances and their impact on the sustenance of

business should be made as a part of the workshops / training programmes /

seminars etc. Ultimately the members should understand that covering the

risk should not be seen as statutory requirements, but it is for the safety of

their own business. APMC mainly network with Indian embassies abroad.

This should be made wider by networking with other global trade promotion

organisations and benefits of outcome / knowledge /information to be passed

on to members. Finally timely and quick response by APMC should be their

agenda of operations as time is an important factor in international trade and

ultimately Time is money.

119

Chapter – 10

Annexure

10.1 Bibliography

1. Anil Chopra September 15, 2015,

http://www.pcquest.com/imc-vashi-small-scale-industries/

2. NijhumRudra April 19, 2016,

http://www.pcquest.com/sme-expansion-faces-bottlenecks-due-to-lack-of-

capital-and-it/

3. ParthaSarathiBiswas June 16, 2016

http://indianexpress.com/article/india/india-news-india/agriculture-reform-

breaking-the-trader-cartel-2855435/

4. Abhishek Waghmare April 19, 2016

http://www.rediff.com/business/special/special-indias-biggest-farm-reform-is-

916-behind-target/20160419.htm

5. Economic Survey 2014-15

http://www.arthapedia.in/index.php?title=Agricultural_Produce_Market_Comm

ittee_(APMC)

6. Faisal Tandel | Posted 11-Jul-2016

http://www.mid-day.com/articles/mumbai-pay-more-for-vegetables-as-traders-

to-go-on-mass-leave/17419189

7. Ashok Valunj, a trader TNN | Dec 29, 2016,

http://timesofindia.indiatimes.com/city/mumbai/navi-mumbai-vashi-apmc-

traders-incur-20-per-cent-losses/articleshow/56226465.cms

http://www.pcquest.com/author/anilc/

http://www.pcquest.com/2015/09/

http://www.pcquest.com/imc-vashi-small-scale-industries/

http://www.pcquest.com/author/nijhumr/

http://www.pcquest.com/2016/04/

http://www.pcquest.com/sme-expansion-faces-bottlenecks-due-to-lack-of-capital-and-it/

http://www.pcquest.com/sme-expansion-faces-bottlenecks-due-to-lack-of-capital-and-it/

http://indianexpress.com/profile/author/parthasarathi-biswas/

http://indianexpress.com/article/india/india-news-india/agriculture-reform-breaking-the-trader-cartel-2855435/


http://www.rediff.com/business/special/special-indias-biggest-farm-reform-is-916-behind-target/20160419.htm

http://www.rediff.com/business/special/special-indias-biggest-farm-reform-is-916-behind-target/20160419.htm

http://www.arthapedia.in/index.php?title=Agricultural_Produce_Market_Committee_(APMC)

http://www.arthapedia.in/index.php?title=Agricultural_Produce_Market_Committee_(APMC)

http://www.mid-day.com/articles/mumbai-pay-more-for-vegetables-as-traders-to-go-on-mass-leave/17419189

http://www.mid-day.com/articles/mumbai-pay-more-for-vegetables-as-traders-to-go-on-mass-leave/17419189

http://timesofindia.indiatimes.com/city/mumbai/navi-mumbai-vashi-apmc-traders-incur-20-per-cent-losses/articleshow/56226465.cms

http://timesofindia.indiatimes.com/city/mumbai/navi-mumbai-vashi-apmc-traders-incur-20-per-cent-losses/articleshow/56226465.cms

120

8. Deepa Krishna, Saturday, June 20, 2009

http://mumbai-magic.blogspot.in/2009/06/wholesale-market-at-vashi-asias-

largest.html

9. Partha Sarathi Biswas | Vashi | Pune | Published: June 16, 2016

http://indianexpress.com/article/india/india-news-india/agriculture-reform-

breaking-the-trader-cartel-2855435/

10. CNBC-TV18 Nov 24, 2016

http://www.moneycontrol.com/news/business/cash-crunch-apmc-market-hit-

hard_8013841.html?utm_source=ref_article

15. AMIT SRIVASTAVA | Tue, 6 Dec 2016 DNA

http://www.dnaindia.com/mumbai/report-apmc-export-complex-at-vashi-

struggles-to-crack-a-deal-2280092

10.2 Webliography

1. http://www.apmcvashi.in/

2. www.msamb.com

3. https://en.wikipedia.org/wiki/Agricultural_produce_market_committee

4. http://www.navimumbai.com/apmc.aspx

http://mumbai-magic.blogspot.in/2009/06/wholesale-market-at-vashi-asias-largest.html

http://mumbai-magic.blogspot.in/2009/06/wholesale-market-at-vashi-asias-largest.html

http://indianexpress.com/profile/author/parthasarathi-biswas/



http://www.moneycontrol.com/news/business/cash-crunch-apmc-market-hit-hard_8013841.html?utm_source=ref_article

http://www.moneycontrol.com/news/business/cash-crunch-apmc-market-hit-hard_8013841.html?utm_source=ref_article

http://www.dnaindia.com/authors/amit-srivastava

http://www.msamb.com/

https://en.wikipedia.org/wiki/Agricultural_produce_market_committee

http://www.navimumbai.com/apmc.aspx

121

10.3 Appendix

Dear Sir,

Kindly allow me to introduce myself as an M Phil. student who is

currently working on the project “To Study The Issues And Challenges Of

Export Market With Special Reference To Vashi Agricultural Produce

Market Committee Market, Navi Mumbai” at the D Y Patil University School

of Management under the guidance of Prof. Dr. R. Gopal.

I would be grateful if you spare some time to fill the questions given

below. Needless to say that the informatics provided would be kept

confidential.

FORMAT OF CERTIFICATE

(To be filled in by the applicant)

1. Name of the Respondent ______________________________

2. Address of the Respondent ______________________________

_____________________________

3. Date of establishment _____________________________

4. Nature of the Business

o Vegetable

o Fruits

o Food Grains

o Nuts

o Dry Fruits

o Any Other (Specify) ______

5. What is your monthly turnover of your business firm?

o Between Rs. 10 - 20 Lakhs



o Rs. 50 Lakhs & More

122

6. Does your firm import/export to other countries?

o Yes

o No

7. If your firm import then products that they input?

______________________________________________________________

8. Annual value of import?

______________________________________________________________

9. Countries from where they import?

______________________________________________________________

10. If your firm export then products that they output?

______________________________________________________________

11. Annual value of export?

______________________________________________________________

12. Countries to where they export?

______________________________________________________________

13. What are the challenges you are facing while import/export?

______________________________________________________________

14. What type of help do you get from the government?

o Trading

o Financing

o Documentation

o Bank Support

o Transportation

o Any other (Specify) _________

15. Are you aware of any promotional efforts due by the government to help in

import/export?

o Yes (Specify) __________

o No

123

16. Do you think it is beneficial to have clusters like the APMC Market which

will help in promoting import/export?

o Yes

o No

17. If yes, what benefits do you see?

______________________________________________________________

18. If no, what are the challenges that you face?

______________________________________________________________

19. The government of India is emphasising on the ―Make in India‖ concept.

What challenges do you see in the ―Make in India‖ concept becoming a

reality?

______________________________________________________________

20. The Government has recently passes the ‗GST‘ Bill. Do you think the GST

bill is useful to you?

o Yes

o No

21. If yes, in what way?

______________________________________________________________

22. If no, what challenges do you see?

______________________________________________________________

This certificate is issued as per the details of our records.

Yours faithfully,

(Signature)

Place __________ Name _______________

Date __________ Designation _________

To Study The Issues And Challenges Of Export Market With ...€¦ · ECGC Export Credit and...

Documents

Transcript of To Study The Issues And Challenges Of Export Market With ...€¦ · ECGC Export Credit and...