Punjab province is divided into 135 notified areas. There is one Market Committee for every notified area. Market Committees are self sustaining entities which earn income from market fee, license fee etc. A Market Committee is a corporate body. It exercises control on sale and purchase of agriculture produce in its area notified.

The Agriculture Produce Markets Act. 1939 was promulgated on the recommendation of royal commission constituted by the British India Government during 1927. The sole intention of the act was to regulate the Agri. Business so as to do away the evils and vices which ultimately tended to the deprivation of the grower from his fair return of his produce. The Market committees were established under the provisions of above said act which were assigned Nobel pursuit.i.e. Safeguard the interest of grower.

The Act of 1939 was replaced by the Punjab Local Government Act, 1975, but for legal and technical reasons, the provisions of the act could not be enforced. Later the relevant provisions of the Punjab Local Government Act, 1975 were replaced by the Punjab Agricultural Produce Markets Ordinance (PAPMO), 1978 and Rules were farmed during 1979.