In India, markets in agricultural products are regulated under the
Contents17
- AEssential Commodities Act, 1955
- BAgricultural Produce Market Committee Act enacted by States
- CAgricultural Produce (Grading and Marking) Act, 1937
- DFood Products Order, 1956 and Meat and Food Products Order, 1973
Show answer
Answer: (B) Agricultural Produce Market Committee Act enacted by States
As mentioned in the Economic Survey 2014-15 (Chapter 8):
In India, agricultural markets are regulated under the Agricultural Produce Market Committee (APMC) Act enacted by individual States.
Here is how it works:
Each state passes its own APMC Act, which divides the state into market areas.
In each market area, an APMC (a committee of farmers, traders, and government nominees) manages the 'mandi' (wholesale market).
Farmers are typically required to sell their produce only in these regulated mandis, where licensed traders bid on the produce.
Why are the other options wrong?
(a) Essential Commodities Act, 1955 — this deals with controlling prices, supply, and distribution of essential commodities (like food grains, petroleum, drugs). It is about preventing hoarding and black marketing, not about regulating agricultural market yards.
(c) Agricultural Produce (Grading and Marking) Act, 1937 — this deals with quality grading and standardization (like AGMARK certification), not market regulation.
(d) Food Products Order and Meat Food Products Order deal with food processing standards, not agricultural market regulation.
Key distinction:
APMC = market/mandi regulation, Essential Commodities Act = price and supply control, AGMARK = quality grading.
APMC Acts create state-wise regulated mandis where farmers must sell through licensed traders, forming the backbone of India's agricultural marketing system.
The Economic Survey 2014-15 highlighted APMC reforms as a key policy priority, making this a relevant exam topic that year.
UPSC is testing whether students can distinguish between market regulation (APMC), supply control (Essential Commodities Act), and quality standards (AGMARK).
APMC Agricultural Markets
Indian Economy Agricultural Produce Market Committee APMC mandi
APMC Agricultural Markets: Structure & Regulation
APMC Acts are enacted by individual states to regulate agricultural markets
Each APMC manages one market area with licensed traders and mandis
Farmers are typically required to sell only in regulated mandis
APMC committees include farmers, traders, and government nominees
What is APMC
Agricultural Produce Market Committee (APMC) is India's system for regulating wholesale agricultural markets. Each state enacts its own APMC Act, creating a network of regulated market yards called mandis where farmers must sell their produce to licensed traders.
How APMC Works
%%{init: {"flowchart": {"wrappingWidth": 460}}}%%
flowchart TD
s1["`**State enacts APMC Act**
Each state passes its own legislation`"]
s2["`**State divided into market areas**
Geographic zones with one APMC each`"]
s3["`**APMC committee formed**
Mix of farmers, traders, government nominees`"]
s4["`**Market yard (mandi) established**
Physical wholesale market infrastructure`"]
s5["`**Farmers bring produce**
Required to sell only in regulated mandis`"]
s6["`**Licensed traders bid**
Only registered traders can purchase`"]
s1 --> s2
s2 --> s3
s3 --> s4
s4 --> s5
s5 --> s6Key Features
State subject: Agriculture is in State List, so each state has its own APMC Act
Monopoly structure: Farmers cannot sell directly to consumers or processors in many states
Commission charges: APMCs levy fees on transactions (market fee, commission, etc.)
Licensed intermediaries: Only registered commission agents and traders can operate
Physical mandis: Designated market yards with warehousing and auction facilities
APMC Acts are state laws, not a single central act
APMC regulates markets and trading, not commodity prices or supply
Don't confuse with Essential Commodities Act which controls hoarding/prices
Each state has its own APMC Act - there's no uniform national law
Essential Commodities Act 1955
Indian Economy Essential Commodities Act 1955
Essential Commodities Act 1955: Price & Supply Control
Central Act to control production, supply, and distribution of essential commodities
Prevents hoarding, black marketing, and artificial scarcity
Covers food grains, petroleum, drugs, fertilizers, etc.
Empowers government to fix prices, stock limits, and licensing
Purpose
The Essential Commodities Act 1955 is a Central Act that empowers the government to control production, supply, distribution, and prices of essential commodities to prevent hoarding and ensure availability to common people.
Key Provisions
Power | What Government Can Do | Example |
|---|---|---|
Price Control | Fix maximum/minimum prices | MSP for wheat, rice |
Stock Limits | Set maximum storage quantities | Onion stock limits during shortage |
Licensing | Require permits for trade/storage | Sugar dealer licenses |
Requisition | Take over stocks in emergency | Procurement during scarcity |
Covered Commodities
Food items: Cereals, pulses, oilseeds, edible oils, onions, potatoes
Energy: Petroleum products, coal, natural gas
Healthcare: Drugs, medicines, medical equipment
Agriculture: Fertilizers, seeds, cattle fodder
Industrial: Iron, steel, cement (when declared essential)
Not about market regulation - focuses on supply/price control only
Central Act but states also have powers under it
Deals with commodity control, not agricultural market structure
Recently amended (2020) to remove cereals, pulses, oils from automatic control
Agricultural Produce Grading & Marking Act 1937
Indian Economy Agricultural Produce (Grading and Marking) Act 1937 AGMARK
Agricultural Produce Grading & Marking Act 1937: Quality Standards
Central Act for standardizing quality of agricultural produce
Establishes AGMARK certification for quality assurance
Covers grading, marking, packaging standards
Voluntary certification - not mandatory for all products
Purpose
The Agricultural Produce (Grading and Marking) Act 1937 establishes uniform quality standards for agricultural commodities through the AGMARK certification system, helping consumers identify quality products and enabling better pricing.
AGMARK Standards
Aspect | What it Covers | Benefit |
|---|---|---|
Grading | Quality classification (Grade I, II, III) | Price differentiation by quality |
Marking | AGMARK logo and grade on packaging | Consumer confidence |
Standardization | Uniform specifications across India | Interstate trade facilitation |
Testing | Laboratory verification of quality | Quality assurance |
Covered Products
Cereals: Rice, wheat, maize, millets
Pulses: Tur, gram, moong, masur
Spices: Turmeric, coriander, cumin, chilli
Oils: Mustard oil, groundnut oil, coconut oil
Others: Honey, basmati rice, ghee, jaggery
AGMARK Logo
Official AGMARK certification logo with quality grade markings on agricultural product packaging
AGMARK logo ensures standardized quality - look for Grade I, II, or III markings
About quality standards, not market regulation or trading
AGMARK certification is the key output, not market committee formation
Voluntary system - producers choose to get AGMARK certification
Enacted in 1937 - much older than APMC system in most states
Food Products Orders
Indian Economy Food Products Order Meat and Food Products Order 1956 1973
Food Products Orders: Processing & Safety Standards
Food Products Order 1956 regulates food processing industries
Meat and Food Products Order 1973 covers meat processing standards
Focus on manufacturing, licensing, and safety standards
Not related to agricultural market regulation
Purpose
These orders under the Essential Commodities Act regulate food processing industries by setting manufacturing standards, licensing requirements, and safety protocols for processed food and meat products.
Key Provisions
Order | Coverage | Key Requirements |
|---|---|---|
Food Products Order 1956 | Processed foods, beverages, packaged goods | Manufacturing licenses, quality standards, labeling |
Meat Products Order 1973 | Meat processing, slaughterhouses, meat products | Hygiene standards, veterinary inspection, export quality |
Regulatory Focus
Industrial licensing for food processing units
Hygiene and safety standards in manufacturing
Quality control measures for processed foods
Export standards for international trade
Labeling requirements for consumer information
These orders regulate food processing, not agricultural markets
Manufacturing standards focus, not farmer-trader relationships
Part of industrial policy, not agricultural marketing policy
Safety and quality of processed foods, not primary produce trading