Uttarakhand is likely to pass the much-awaited Agriculture Produce Marketing Committee (APMC) Act, setting the stage for private companies like RIL and ITC to get into contract farming in the state and set up private mandis.

Agriculture Minister Trivendra Singh Rawat today said Chief Minister Ramesh Pokhriyal Nishank has agreed to give the final nod to the proposal at the next Cabinet meeting.

The move follows the green signal being given by a sub-committee of the state Cabinet, which approved the draft bill for the APMC Act. A four-member expert team of agriculturists, which toured states like Andhra Pradesh and Karnataka to study the impact of the APMC Act there, also gave its approval.

The APMC Act contains provisions for setting up private mandis, enabling contract farming and constitution of a regulatory authority to ensure a level playing field between government-controlled and private mandis.

Private mandis would mean cutting out extra cess such as the mandi cess and other charges, reducing final costs for consumers and buyers and allowing better gains for farmers, top officials here said.

Both Reliance and ITC have evinced interest in contract farming in the state. "We have also given permission for contract farming in the draft bill," said Rawat.

In effect, the new APMC Act would mean direct purchase of commodities by trading and corporate houses from farmers at market-defined prices, either through individual purchase contracts or from farmer consumer markets.

The APMC draft bill has been gathering dust during the past two years after then Chief Minister B C Khanduri suggested certain changes, including a study of similar Acts in other states.

Senior officials admitted that the government was a bit hesitant earlier to pass the Act due to certain provisions like contract farming.

The sources said the government's inhibitions about the APMC Act had blocked companies like Reliance, ITC and Mother Dairy from entering into agriculture sector directly in the state. These companies are ready to invest in the state through different proposals, an official of the Agriculture Department said.