ri   lt re and ood       ana ement       8.25
               food subsidy bill. Food subsidy bill has    and 4,843 sub-market yards regulated by the
               increased to over 15 per cent of agri-GDP   respective APMCs in India. Thus, India has not
               by 2016-17 from 5 per cent of 2005-06       one, not 29 (number of states) but thousands of
               (as per the Commission for Agricultural     agricultural markets. This Act notifies agricultural
               Costs and Prices-CACP).                     commodities produced in the region such as
         (iv) The procurement incidentals of wheat         cereals, pulses, edible oilseed, fruits and vegetables
               and rice consist of costs related to mandi  and even chicken, goat, sheep, sugar, fish, etc.,
               charges and taxes, cost of gunny bags,      and provides that first sale in these commodities
               arhatiya commission, mandi labour,          can be conducted only under the aegis of the
               forwarding charges, internal movement,      APMC through the commission agents licensed
               storage charges, interest, administrative   by the APMCs set up under the Act.
               charges and others. Out of these costs,          The typical amenities available in or around
               mandi charges and taxes constitute more     the APMCs are: auction halls, weigh bridges,
               than 40 per cent of the total costs.        godowns, shops for retailers, canteens, roads,
           Opportunity cost of running the PDS             lights, drinking water, police station, post-
     have been very high. This is particularly due to      office, bore-wells, warehouse, farmers amenity
     increased levels of fund diversion for food subsidy,  center, tanks, water treatment plant, soil-testing
     the government could not support adequate             laboratory, toilet blocks, etc. Various taxes, fees/
     amount of investment in the agricultural sector.      charges and cess levied on the trades conducted in
     This prevented capacity building in the sector.       the mandis are also notified under the Act.
           Over the time, several discrepancies seeped
                                                                As per the Economic Survey 2014–15, the
     into the PDS, such as,
                                                           APMCs of the states levy multiples fees of
           (i) high operation costs,                       substantial magnitude which are non-transparent
          (ii) high levels of leakages,                    and hence work as a source of political power. The
        (iii) high administrative costs,                   functioning of the APMCs have always been a
         (iv) corruption, and                              matter of debate among experts and policymakers
          (v) mismanagement.                               alike—major issues being the following:
           Subsidies created some other problems, too.              They charge a market fee from buyers,
     Firstly, subsidies brought distortions in the market,          and they also charge a licensing fee from
     which hamper the domestic as well as the external              the commissioning agents who mediate
     interests and secondly, caused a heavy drain on the            between buyers and farmers.
     government exchequer. PDS poses even higher                    They also charge small licensing fees
     challenge when domestic or international prices                from a whole range of functionaries
     are on the rise and the government is forced to                (warehousing agents, loading agents, etc.).
     raise the MSPs of crops.                                       In addition, commissioning agents charge
                                                                    commission fees on transactions between
        AGrIculture mArKetInG                                       buyers and farmers.
     India’s agrimarket is presently regulated by the               The levies and other market charges vary
     Agricultural Produce Market Committee (APMC)                   widely in the states. Statutory levies/
     Act enacted by the state governments. There                    mandi tax, VAT, etc., are a major source
     are about 2,477 principal regulated agrimarkets                of market distortions.