Chapter I PRELIMINARY

E-Commerce Platform

131-K. Establishment of E-Commerce Platform.- (1) No person shall establish and run e-commerce platform for trading in notified agricultural produce without obtaining a license under this section.

1. (2) Subject to such conditions, and such fees and such security deposit as may be prescribed, the Director of Agricultural Marketing shall grant license to setup e-commerce platform for facilitating trading in the notified agricultural produce.
2. (3) Any person who desires to establish and run e-commerce platform may apply to the Director of Agricultural Marketing in such manner along with such fee and security deposit as may be prescribed.
3. (4) The e-commerce platform shall,-
   • (i) provide payment facility for notified agricultural produce traded by traders in the platform;
   • (ii) allow only the licensed traders licensed by the appropriate authority under the Act for registering with the e-commerce platform.
   • (iii) ensure transparency in operation, decision making related to entire trading operations taking place in the platform.
   • (iv) provide for collection of fees, charges etc., relating to registration, trading transactions taken place in the platform.
   • (v) maintain records in electronic format of all the transactions traded in the platform;
   • (vi) provide services relating to grading, quality certification and standardization of commodities, collateral financing, borrowing and other services required by the participants of the platform;
   • (vii) trade only in the market fee suffered goods offered for sale by the licensed traders and in case, contrary to the above takes place, the licensee of the platform has to pay the market fee applicable to the concerned market committee; and
   • (viii) provide the operational and working guidelines to the licensing authority and after approval of the same, function the platform accordingly.

131-L. Reports of E-commerce Platform Licensee.- The licensee shall maintain record of all the transactions taken place on the e-commerce platform in the electronic format and submit such periodical reports and returns at such times and in such forms as specified by the Director of Agricultural Marketing from time to time to the licensing authority or any officer authorized by him in this behalf.

131-M. Power to cancel or suspend e-commerce license.- The Director of Agricultural Marketing for reasons shall recorded in writing suspend or cancel e-commerce platform license granted by him in the following circumstances, namely:-

1. (i) if the license has been obtained through willful misrepresentation or fraud;
2. (ii) if the license holder or any one acting on his behalf with his express or implied permission commits a breach of any of the terms or conditions of the license;
3. (iii) if the license holder in combination with licensed traders or other licensed e- commerce platform holders, commits any act or abstains from carrying normal business in the platform with an intention of willfully obstructing, suspending or stopping of marketing of notified agricultural produce in the market area which had a consequence on the business operations in the market yards.
4. (iv) if the license holder becomes an insolvent; and
5. (v) if the license holder incurs any disqualification in such manner as may be prescribed; Provided that, no order shall be made without giving notice to the licensee. 131-N. Appeal.- Any person aggrieved by an order of the Director of Agricultural

Marketing prefer an appeal to the Karnataka Appellate Tribunal within thirty days of receipt of the order communicated in this regard.

131-O. Redressal of disputes.- Any dispute between the e-commerce platform licensee, licensed trader permitted to operate in the platform or the buyer of the produce offered in the platform, as the case may be regarding payment to be made to the licensed traders for the sale of agricultural produce in the platform, jurisdiction of operation, weight of agricultural produce, quality, price, charges, fees etc., shall in writing file a complaint by himself or through his authorized representative before the Director of Agricultural Marketing within thirty days from the date of arising the dispute with necessary documents.

1. (2) The Director of Agricultural Marketing on receipt of the complaint, after giving an opportunity of being heard with the concerned parties and making necessary enquiry, decide the dispute within a period of sixty days from the date of receipt of the complaint. 131-P. Penalty for contravention of section 131-K.- Whoever contravenes the provisions of section 131-K shall, on conviction, shall punished with imprisonment for a term which may extend to six months or with a fine of rupees one lakh or with both.]

1. Section 131K, 131L, 131M, 131N, 131O, 131P Inserted by Act 19 of 2025 w.e.f. 25.03.2025.

of notified agricultural produce in the market yards has been removed and the role of the APMCs has been restricted to the market yards only. The restriction under section 8(2) of the Act which prohibited the trade outside the market yards and for its violation, levy and conviction prescribed under section 117 has been omitted.

Government of India framed 03 Farm Laws through an Ordinance No:10 of 2020 and gave effect from 05/06/2020. Subsequently, the said ordinance was replaced by Act no.21/2020 and gave effect from 27/09/2020. In view of the farmers opposing the said farm laws, Government of India decided to withdraw the said Act and repealed the same by Act No.40/2021 with effect from 01/12/2021. The same has been published in the official Gazette of the Government of India.

2020, the following adverse effect is noticed, namely:-

1. (a) the farmers who trade in the market area other than the market yards will be prone to exploitation by the traders since there is no regulatory mechanism for controlling the same;
2. (b) in view of the trade in notified agricultural produce taking place outside the market yards, the revenue for the Government under different heads through taxes/cess will be affected as there is no substantiate documents available for cross verification;
3. (c) the whole sale trade in notified agricultural produce is being carried in the market yards through the on-line mode (Unified Market Platform). The farmers are benefited by way of competitive and fair price for their produce sold under the Unified Market Platform. As there is no on-line system for the trade taking place outside the market yards, the farmers will not get fair and competitive prices for their grown produce; 4
4. (d) farmers are not assured of a system wherein they will get fair value of the produce sold outside the market yards;
5. (e) in the market yards, there is system provided under the Act for settlement of disputes arising between the farmer and the market functionaries regarding weight, payment of the produce sold etc., But, the same dispute mechanism is not available for the transactions taking place outside the market yards by the farmers;
6. (f) as the farmers are not aware of the prices prevailing in different markets in the State for the agricultural produce and the arrivals, the farmers will not be able to make a good decision on the price to be charged for their produce and hence they are denied in getting a competitive price;
7. (g) the market yards in the State are developed by the grants from Government of India, State Government and the funds of the market committees. The infrastructural facilities so far created will not be put to use fully and hence the said facilities will be wasted in due course;
8. (h) approximately, one lakh people are functioning in the market yards by obtaining license from the market committees and discharging the activities

related to trading namely; hamals, weighmen, cartmen, assistants working in trader, commission agents and stockiest shops. They will not get the employment throughout the year and their livelihood is in peril;

1. (i) the APMCs are contributing to the Revolving Fund setup by the Government for implementation of Minimum Support Price Scheme. When the prices of the agricultural produce comes below the minimum support prices declared by the Government of India, the Revolving Fund will be operated. Prior to the Act amendment, the APMCs were contributing approximately Rs. 125 crores to the Revolving Fund annually and in view of the amendment, the restriction of APMCs role is restricted to the market yards, it affected the income of the APMCs and hence the contribution to the Revolving Fund has come down to 50% i.e, Rs. 60 crores;

1. (j) the details of the marketing operations carried out in the market yards will provide information on the prices prevailing in the market yards and the arrivals of commodities which is helpful in framing the policy and programmes by the Government. Since the details of the trading activity taking place outside the market 5 yards are not available, the policy and programmes to be framed by the Government will be affected substantially for lack of credible data;
2. (k) the expectations of the State Government by bringing in the earlier amendment which allowed the trading outside the market yards, it is noticed that the farmers produce price and income has not increased; and
3. (l) the market fee levied and collected by the APMCs in the State is utilized for

providing infrastructural facilities in the market yards and maintenance of the

APMCs. In view of the trade taking place outside the market yards, the

APMCs have no control and cannot levy and collect market fee has affected their income considerably. Nearly, 50% of the income has come down which has affected the maintenance of market yards and other its obligations;

section 8(2), section 8(3) and section 117 of the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966 by Amendment Act No.59/2020, it is proposed for restoration of the earlier provision existed under the Act which will enable the APMCs to have control over the trading of notified agricultural produce in the market yards and also the market area which is of importance in protecting the interest of the growers of agricultural produce. Hence, amendment to section 8(2), section 8(3) and section 117 of the Karnataka