India’s first APMC yard established with near-zero government assistance

The entrance to the Amreli APMC’s brand new market yard. (Express Photo: Gopal Kateshiya)

P P Sojitra, chairman of the Amreli Agricultural Produce Market Committee (APMC), recently earned praise from Prime Minister Narendra Modi. The reason: the unique model of financing that the APMC employed in developing its new market yard at Fatehpur, a village on the outskirts of Amreli town.

The new yard, costing Rs 125 crore, has 10 auction sheds of 25,000 square feet each, an open bidding space of three lakh square feet, 200 shops/offices, a well-appointed guest house, a farmer training centre, soil testing lab and produce grading facilities, underground cabling and storm-water drainage systems. But what sets it apart from other APMC-owned yards in India is its being built with hardly any state support or bank loans.

Started in 1953, the Amreli APMC is the oldest in the Saurashtra region. The existing yard spread over six hectares has, over time, become the heart of Amreli town. And with rising crop arrivals, on top of vehicular population linked to the town’s own growth, it has inevitably contributed to traffic snarls.

In 2008, Sojitra, then with the Congress, promised to develop a new and bigger yard outside the town. He repeated it while contesting the 2013 election to the APMC as well – this time as a BJP leader. Being with the ruling party, he thought, would make implementing the poll promise easier.

“We first approached the state government to allot us land, but got no response. So, we directly approached the farmers,” says Sojitra, who was the BJP’s Amreli district unit general secretary from 2012 to 2015.

The APMC initially bought 17 hectares from 10 farmers in Fatehpur, paying Rs 90 lakh per hectare each. But three farmers with three hectares refused, as their land was contiguous to the state highway. “We needed that tract, belonging to three brothers, to get the project going,” notes Sojitra.

Ghanshyam Kanpariya was paid Rs 51 lakh per bigha (six bigha make a hectare), plus two shops in the new yard free of cost. The second brother Rasik was also given the same rate, along with an auctioneer’s job in the APMC for his son Mehul. The last one Nanji, too, agreed after being offered Rs 55 lakh per bigha and a clerical job at the APMC for his mechanical engineering graduate son Vishal. Most farmers used the proceeds to buy cheaper land in nearby villages, in the process increasing their holding. Ghanshyam and Rasik Kanpariya even invested in embroidery work units at Surat, while Nanji bought a flat and shop in Ahmedabad for his elder son Jatin, who has a marketing job there.

While land acquisition costs, inclusive of registration charges, alone came to Rs 30 crore, the APMC had only Rs one crore of savings to start with. “To raise resources, we first demolished a dilapidated shed in the old yard and constructed 200 shops there. These were, then, auctioned off on a 99-year lease basis. Net of building costs, we could mobilise Rs 20 crore,” informs Sojitra.

The next step was to convert even the auction sheds in the old APMC yard into 132 platforms for vegetable retailing and 52 provision stores. The spaces were leased out in advance, with a condition that the possession would be granted only after three years. The APMC would till then continue to use the sheds for auctioning crops. By end-2013, all the assets in the old yard, barring office, had been leased out, generating Rs 37.24 crore.

But since this wasn’t enough, it was decided to solicit interest from traders for taking on lease 200 shops to be built in the new market yard. The response, however, was lukewarm. “Hence, we the Gujarat Agricultural Produce Market Act’s provisions, making it mandatory for the APMC’s 80 commission agents and 50 wholesalers to own offices in the new yard as a precondition for retaining their licences. We could, thus, sell around 150 shops. That, along with space sold to the Amar Dairy (Amreli District Cooperative Milk Producers’ Union) and a bank, helped garner Rs 22.39 crore,” adds Sojitra.

At the project construction stage, the APMC inserted a tender condition that required the private firm winning the contract to compulsorily purchase assets worth 25 per cent of the total cost. The total project cost, inclusive of land, was assessed at Rs 125 crore. The contractor’s share of that came to Rs 31.25 crore.

“Only for the balance amount, we had to avail of a Rs 25 crore NABARD loan, of which Rs 10 crore has been withdrawn. The only help we took from the state government was a Rs 5 crore grant under the Kisan Kalpvruksha Yojana, a scheme to fund creation of vegetable markets within APMC premises,” states Sojitra.

While the new yard was formally inaugurated by the Prime Minister on September 17, the APMC intends shifting its operations there by end-October after Diwali. There couldn’t be a more auspicious time for India’s first APMC yard, built with least government assistance, to take off.