Farmers’ Produce Trade and Commerce (Promotion and Facilitation), bill 2020

Introduced: Lok Sabha (14th Sept 2020)

Passed: Lok Sabha (17th Sept 2020)

Passed: Rajya Sabha (20th Sept 2020)

Present status: Received assent of the President on 24th Sept 2020 & converted to Act. But recently the government has repealed the Act.

About Farmers’ Produce Trade and Commerce (Promotion and Facilitation), bill 2020

Ministry: Agriculture and Farmers Welfare


  • Break the monopoly of government-regulated mandis and provide farmers and traders freedom of choice of sale and purchase of Agri-produce.

Key provisions  

  1. Trade of farmers’ produce:
    1. It allows intrastate and inter-state trade of farmers’ produce outside the physical premises of markets notified under State Agricultural Produce Marketing legislation.
    2. In addition to mandis, freedom to do trading at farmgate, cold storage, warehouse, processing units etc.
  2. Electronic trading: It proposes electronic trading in transaction platform for ensuring a seamless trade electronically.
  3. Abolition of cess or levy for sale: The farmers will not be charged any market fee, cess or levy for sale of their produce and will not have to bear transport costs.

Issues with Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020:

  • Lack of regulatory oversight and reporting: The bill provides for non-APMC markets but does not provide any mechanism for its regulation. There are concerns that the lack of regulation might lead to unregulated trade detrimental to the primary purpose of providing market access to farmers. Further, it does not provide proper grievance redressal mechanism.
  • Loss in revenue for states: The market fee, rural development fee, and arhatiya’s commission are big sources of revenue for some states. With states not permitted to levy market fee/cess outside APMC areas under the new legislation, Punjab and Haryana could lose an estimated Rs 3,500 crore and Rs 1,600 crore each year respectively.
  • Fear over MSP: According to critics, the dismantling of the monopoly of the APMCs is the sign of ending the assured procurement of food grains at minimum support prices (MSP).
  • Setting Price: APMC continues to set the reference price even for private players. In the absence of APMC, there will be no alternative for a large market that can actually set price signals. Global experience such as the French dairy producers and the dairy farmers’ co-operatives in the U.S suggest that buyer cartels will start fixing the market price.
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