Photo by Nandhu Kumar on Unsplash
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– globalbihari bureau
New Delhi: The Union Cabinet today approved amendment to the Essential Commodities Act in an attempt to raise farmers’ income and “transform” agriculture. It further approved ‘The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020’, as well as ‘The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020’.
With the amendment to Essential Commodities Act, commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes will be removed from list of essential commodities. “This will remove fears of private investors of excessive regulatory interference,” the government stated. It hoped that the freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector/foreign direct investment into agriculture sector. “It will help drive up investment in cold storages and modernization of food supply chain,” it said. “The freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector/foreign direct investment into agriculture sector. It will help drive up investment in cold storages and modernization of food supply chain,” it added
While India has become surplus in most agri-commodities, farmers have been unable to get better prices due to lack of investment in cold storage, processing and export as the entrepreneurial spirit gets dampened due to hanging sword of Essential Commodities Act. “Farmers suffer huge losses when there are bumper harvests of perishable commodities. With adequate processing facilities, much of this wastage can be reduced,” it said.
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The government further claimed that while liberalizing the regulatory environment, it had also ensured that interests of consumers were safeguarded. “It has been provided in the Amendment, that in situations such as war, famine, extraordinary price rise and natural calamity, such agricultural foodstuff can be regulated. However, the installed capacity of a value chain participant and the export demand of an exporter will remain exempted from such stock limit imposition so as to ensure that investments in agriculture are not discouraged,” it said. With the amendment, the government hoped it will help both farmers and consumers while bringing in price stability, and will also prevent wastage of agri-produce that happens due to lack of storage facilities.
The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020
The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 basically aims at creating additional trading opportunities outside the APMC market yards to help farmers get remunerative prices due to additional competition. The government said, will create an ecosystem where the farmers and traders will enjoy freedom of choice of sale and purchase of agri-produce. ‘It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations. This is a historic-step in unlocking the vastly regulated agriculture markets in the country,” it claimed. It further added that this ordinance will open more choices for the farmer, reduce marketing costs for the farmers and help them in getting better prices. “It will also help farmers of regions with surplus produce to get better prices and consumers of regions with shortages, lower prices. The ordinance also proposes an electronic trading in transaction platform for ensuring a seamless trade electronically,” it said and added it was in line with paving the way for creating One India, One Agriculture Market.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 is meant to “empower farmers for engaging with processors, aggregators, large retailers, exporters etc., on a level playing field without any fear of exploitation”. The government said it will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs. It will reduce cost of marketing and improve income of farmers. It pointed out that Indian Agriculture was characterized by fragmentation due to small holding sizes and had certain weaknesses such as weather dependence, production uncertainties and market unpredictability.
“This Ordinance will act as a catalyst to attract private sector investment for building supply chains for supply of Indian farm produce to global markets. Farmers will get access to technology and advice for high value agriculture and get ready market for such produce. Farmers will engage in direct marketing thereby eliminating intermediaries resulting in full realization of price. Farmers have been provided adequate protection and effective dispute resolution mechanism has been provided for with clear time lines for redressal,” it said.
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