Agriculture sector needs structured and functional markets, preferably in vicinity of farmers, to drive growth, employment, remunerative price and economic prosperity in rural areas of the country. Enabling mechanism were also required to be put in place for procurement of agricultural commodities directly from farmers’ field and to establish effective linkage between the farm production, the retail chain and food processing industries. Agriculture being a state subject, a Model APMC Act was formulated and circulated to the States/UTs in the year 2003 for adoption.
The Model Act provides for contract farming, direct marketing, setting up markets in private and co-operative sector, e-trading, single point levy of market fee, single registration of market functionaries, farmer-consumer market etc. Subsidy/eligibility under one central sector scheme( AMIGS) has been restricted to States/ UTs where reforms to APMC Act has been done providing for Direct Marketing, Contract Farming and Markets in Private/ Coop Sectors. States/UTs having done these three reforms are Andhra Pradesh, Arunachal Pradesh, Assam, Goa, Gujarat, Himachal Pradesh, Jharkhand, Karnataka, Maharashtra, Mizoram, Nagaland, Orissa, Rajasthan, Sikkim, Uttarakhand and Tripura. States/ UTs where reforms to APMC Act have been done partially are NCT of Delhi, Madhya Pradesh, Chhattisgarh, Haryana, Punjab and Chandigarh. States/ UTs where there is no APMC Act are Kerala, Bihar(APMC Act repealed in year 2006),Manipur, Andaman & Nicobar Islands, Dadra & Nagar Haveli, Daman & Diu, and Lakshadweep. Tamil Nadu has done reforms by executive orders instead of amending APMC Act. States/ UTs where reforms required to be done are Meghalaya, J & K, West Bengal, Puducherry, and Uttar Pradesh.