In most states, mandis are established and regulated under the State APMC (Agricultural Produce Marketing Committee) Acts. The state's geographical area is divided into smaller market areas, where the markets are managed by Market Committees constituted by the state government. A system of licenses bars the entry of traders from other states and other mandis. Since there is no mechanism for clearing and settlement of dues, no one does business with strangers. In short, these mandis are the place where politics meets economics in the agrarian economy.