Karnataka Agricultural Policy - Institute for Social and Economic ...

Karnataka Agicultural Policy 2006
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One of the main reasons for stagnation in net farm income is that the schemes aimed at production
enhancement never considered factor and product markets as important economic levels. This
emphasizes the role of agricultural/rural markets as an institution affecting income flow to farm
households. This in turn is determined by the operational efficiency and the prices prevailing in these
markets.
The agricultural product markets are largely governed through both unorganized private trade and
organized marketing institutions. In the organized sector, the Commodity boards, Corporations,
Export Councils and Cooperatives play a predominant role.
27.4 Policy Steps Needed
The Karnataka Agricultural Produce Marketing (Regulation) Act, 1966 has been amended
several times over the years. It is necessary to review provisions of the Act and Rules in the
present scenario in the economy for improvement of the organized agricultural marketing
system. The Model APMC Act can be used to effect amendments in APMC Act. Private
investment will be allowed for creating infrastructure in the agricultural marketing network
and an atmosphere of healthy competition will be created. The market charges and fees will
be rationalized so as to reduce the cost of marketing and enhance the competitiveness to
favour the farmers.
The existing KAPM(R) Act will be reviewed for giving incentives for setting up regional
commodity exchanges, auction houses and terminal markets by way of public- private
participation to create competitive trade environment. The charges and fees will be more in
the nature of service charges based on quality of service provided and its applications will be
at different slabs in consonance with the type/scale of service/facilities provided to market
users. This will be rationalised.
The State shall endeavour to provide remunerative price to farmers’ produce by harmonizing
domestic prices with world prices and improving the efficiency in marketing system. The
broad policy of the state would be to encourage free trade and to go by the overall demand
and supply conditions. This would be combined with the policy of providing protection to the
farming community by ensuring remunerative prices and supplying quality products to the
consumers at reasonable prices. A market linked insurance scheme will be worked out on the
basis of past marketing experience.
The wholesaler/processors/retailers etc. will be permitted to procure commodities directly
from the farmers or traders in production or trade centers. Marketing as part of contract
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