Farmer are free to sell the agricultural produce as they may choose. It may come as rude shock that until today every farmer was bound to sell it’s agricultural produce at the ‘specified market’ which was a euphemism of a close corporation consisting of politicians rather their proxies. The ‘Management’ of ‘Market’ had the power to dictate the price of the produce.
The Agricultural Produce Market Committee (APMC) was introduced as a reform to uplift the living of farmers but it subjugated them forcing them to make ‘illegal’ sale to outsiders without intervention of APMC. It was a cause of corruption and hardship for farmers. India had a unique institution called ‘Aadhatiya’ which was a mixture of middle man for sale and a money lander to finance agriculture operation. These Aadhatiya which were to be replaced by APMC but they became management of APMC. Three bills will pave the way for the sale of agricultural produce free from traders / Aadhatia/Dalal/Middle man. It will also protects to the farmers from market fluctuations through ‘Contract Farming’.
In most APMCs, buyers have to route all purchases through licenced Aadhatiyas(middlemen). These middlemen charge a commission for their “services” — many times, both from the buyer and seller. The Aadhatiya is also often a moneylender, supplying seeds, fertilizers and pesticides to farmers on credit. They, then, are forced to sell through him and settle their dues in perpetuity. Also, mandi fees ranges from 0.5% to 5% on the value of the sale, while varying across states and commodities. (Here is a good article explaining the issues in detail.)
Here is Congress leader Kapil explaining the the Dalal or Middleman at work:
The three Bills named as Agriculture Reforms Bill 2020 Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, Farmers (Empowerment and Protection) Price Assurance and Contract Bill for Agricultural Services and Essential Commodities (Amendment) Bill were enacted as Ordinance on 5 June 2020. Continue reading