← All questionsGS3 · 2014 · Agriculture ·APMCs and Food Inflation
QUESTION 4
GS3
12.5 marks

There is a point of view that Agricultural Produce Market Committees (APMCs) set up under State Acts have not only impeded development of agriculture but also caused food inflation in India. Critically examine.

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9 min
200 words

What the examiner wants

Critically examine whether APMCs hindered agriculture and fuelled food inflation.

Critically examineWeigh the strengths and the weaknesses, then give a balanced verdict.

Demand-wise check

  1. 1Problems: monopoly of licensed traders, cartels, high commissions and fees, limited markets, delays in payment, intermediaries' share≈35 words
  2. 2Inflation link: supply chain inefficiencies, hoarding, price markups≈35 words
  3. 3Counter: APMCs gave regulated price discovery and infrastructure; inflation also due to supply shocks, MSP hikes, rising demand≈35 words
  4. 4Reforms: Model APMC Act 2003, Model APLM Act 2017, e-NAM, FPOs; experience of Bihar≈35 words

Open in about 30 words and close in about 30.

Answer plan

Purpose of APMCsProblemsInflation linkCounter-argumentsReformsConclusion

Where marks usually go

  • Not addressing the 'food inflation' part
  • Ignoring that some states abolished APMCs with mixed results

Draw this

  • Flowchart: farmer → commission agent → trader → retailer → consumer with price markups

Value addition

  • ExampleBihar abolished the APMC Act in 2006, but private markets did not develop and farmers' prices stayed low.State experience, NITI studies
  • CommitteeShanta Kumar Committee (2015) found only about 6% of farmers sell to government at MSP.Shanta Kumar Committee, 2015
  • Schemee-NAM launched in April 2016 to link APMC mandis online.Ministry of Agriculture, 2016

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