The men behind APMC, MSP and procurement -Harish Damodaran

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published Published on Sep 27, 2020   modified Modified on Sep 27, 2020

-The Indian Express

The idea of a Minimum Support Price for crops came first from a visiting US soil scientist and fertiliser expert

The institution of ‘mandis’ is as old as markets where wholesale trading in primary produce has been taking place since time immemorial.

APMCs or Agricultural Produce Market Committees are of more recent vintage and the creation of Sir Chhotu Ram. In 1939, the legendary farmer leader, as Development Minister in the provincial government of his Unionist Party, got the Punjab Agricultural Produce Markets Act passed. It provided for the constitution of “market committees” having two-thirds farmer representation to oversee the functioning of mandis and curb malpractices by traders. This was complemented by another law that made the use of false or non-standard weights and scales in mandis a cognizable offence.

Thus, “mandis” became “APMC mandis”. In course of time, almost all states enacted their own APMC Acts to regulate mandis and outlaw any wholesale transactions in farm produce outside these market yards or “notified areas”. At last count, there were over 7,300 APMC mandis, both principal and sub-market yards, across India.

The origin of MSPs or minimum support prices is even newer. Its progenitor was an American, Dr Frank W Parker, who was the chief agriculturalist of a USAID (US Agency for International Development) mission to India and adviser to the Ministry of Food and Agriculture.

In a letter dated February 1959 to the then minister Ajit Prasad Jain, Parker pointed to the problem of low crop prices faced by farmers during harvest time. It deterred them from investing in good seeds, fertilisers and other productivity-boosting inputs. “One of the greatest economic incentives for production is a satisfactory and dependable level of prices,” he wrote, while recommending that the government “establish minimum or support prices for all major crops at least one year before harvest”.

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The Indian Express, 27 September, 2020, https://indianexpress.com/article/opinion/columns/the-men-behind-apmc-msp-and-procurement-6617277/


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