The Punjab Agricultural produce is being regulated under the Punjab Agricultural Produce Markets Act, 1961. The preamble of the act is "An act to consolidate and amend the law relating to the better regulation of the purchase, sale, storage and processing of Agricultural produce and the establishment of the markets for Agricultural produces in the state of Punjab". The primary object of Punjab Mandi Board and Market Committees is to establish modern Markets for efficient marketing of agricultural produce by providing modern facilities in the mandis and to enforce the provisions of the Act, Rules Bye-laws framed there under. Punjab State Agricultural Marketing Board a body corporate as well as a local authority by the name of the State Agricultural Marketing Board, having perpetual succession and a common seal, with power, subject to the provisions of this Act, to acquire and hold property and shall by the said name sue and be sued.

Whereas Market Committees are to enforce the provisions of this Act and the rules and the bye-laws made there under in the notified market area and, when so required by the Board, to establish a market therein providing such facilities for persons visiting it in connection with the purchase, sale, storage, weighment and processing of Agricultural produce concerned. The Board may from time to time direct these market committees to control and regulate the admission to the markets. Market Committees are service rendering agencies and their main source of income is market fee. The existing rate of market fee on purchase or sale transactions of agricultural produce specified in the schedule are upto 3%. Timber and firewood has recently been added in the schedule of the Act and 1% fee is levied on the purchase or sale of the same.

In addition to this, the State Govt. has also levied 2% Rural Development fund on the purchase or sale of agricultural produce under the Rural Development Fund Act,1987 which is executed by Punjab Rural Development Board. The Market Committees have been made the collecting agencies for the same. The Punjab State Agricultural Marketing Board has taken many important decisions which would further strengthen the agricultural marketing system in the State and bring number of benefits to rural economy in the State.