Markets in Transition: Assessing the Role and Functions of the Shift from APMC to PACS in Bihar

Over the past few decades, Bihar's agriculture has experienced a significant transition. Many factors, such as the change in the agricultural markets, are affecting most of the agricultural activities. The agricultural markets are essential for agricultural produce, where the primary agricultural producer meets the first buyer. This paper analyses the transitions in Bihar's regulated agricultural market to a completely open market system. Regulated agricultural markets were established in Bihar in the 1960s and 1970s through the Agricultural Produce Marketing Committee Act (APMC Act). However, the Bihar government repealed the Agricultural Produce Market Committee Act (APMC Act) in 2006, aiming to encourage private investment and traders to buy agricultural commodities directly from farmers. It is also supposed to provide farmers with more options to sell their produce. As a result of the abolition of APMCs in Bihar, Primary Agricultural Credit Societies (PACS) have emerged as key institutions in rural financial assistance and in the public procurement process. However, this transition in the agricultural market in Bihar has raised many questions, such as the state intervention in agriculture markets, the limitation of market liberalisation, the importance of the regulated agricultural markets, and which types of markets emerged for agricultural produce after the abolition of APMC Act regulated markets in Bihar. This study attempts to evaluate the role and function of agricultural markets that emerged in Bihar after the abolition of regulated agricultural markets.