Bangalore: The State Cabinet is expected to consider later this week controversial draft legislation to amend the Agricultural Produce Marketing Committee (APMC) Act.

The amended Act will pave the way for contract farming and free marketing, organised retailing, smooth flow of raw material to agro-processing industries, competitive trading and adoption of innovative marketing systems and technologies.

"The draft legislation will be placed before the Cabinet by Thursday or Friday," a senior Agriculture Ministry official told The Hindu .

The Act is being amended despite strong opposition to the move from various stakeholders involved. The previous Dharam Singh government had soft-pedalled the move to amend the Act in the face of objections from farmers and trade bodies.

The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) says that the proposed Act, which will allow multinationals to operate in the country and encourage corporate farming, is likely to be detrimental to all stakeholders. It is not favourable to the existing APMC network and will result in breaking the cordial relationship prevailing among traders, farmers and consumers.

A top FKCCI official said that it would be highly undesirable to allow multinationals to enter the sector without providing a level playing field to domestic traders.

The Bangalore Grain Merchants Association has said that the proposed Act will be detrimental to the interests of the domestic trading community, which cannot match multinational companies in terms of capital, infrastructure and technology. If multinationals are allowed to operate in the country, farmers will be forced to raise crops tailor-made for the Western market, thus threatening the food security of the nation, the association says.

The Food Processing Industries Association has urged the State Government to allow members to buy raw material directly from farmers and exclude members from the purview of the proposed Act.

Representatives of the Food and Vegetable Merchants Association and the Wood and Timber Association have also pleaded with the Government to drop the move to amend the Act.

The Agriculture Ministry official said these concerns had been taken care of while amending the Act. The proposed amendment would also help link all mandis electronically, thereby enabling farmers to get the latest price for their produce. "The proposed amendment is beneficial to the farmers," he said. Chief Minister H.D. Kumaraswamy would have to take the final decision on amending the Act, he said.

Prime Minister's appeal

Addressing a meeting of the full Planning Commission in Delhi on September 27, 2005, Prime Minister Manmohan Singh exhorted the States to "accelerate and urgently complete" agricultural marketing reforms to ensure that farmers got a legitimate share in the final value of their produce.

Several States have already amended the APMC Act to facilitate free movement of agricultural produce between States.

Multinationals keen on setting up distribution centres say they are not being allowed to deal in agricultural produce due to restrictions imposed by the APMC Act, which requires them to carry out business only in designated markets.

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