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New Delhi : The Union Cabinet chaired by Prime Minister Narendra Modi met on June 3, 2020, and took several landmark and historic decisions at the meeting, which will go a long way in helping India’s farmers while also transforming the agriculture sector.
Historic Amendment to Essential Commodities Act : The Cabinet on June 3 approved historic amendment to the Essential Commodities Act. This is a visionary step towards transformation of agriculture and raising farmers’ income.
Background – 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, warehouses, processing and export as the entrepreneurial spirit gets dampened due to the hanging sword of Essential Commodities Act. Farmers suffer huge losses when there are bumper harvests, especially of perishable commodities. With adequate processing facilities, much of this wastage can be reduced.
Benefits- 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 in their business operations. 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 storage and modernisation of food supply chain.
Safeguarding interest of consumers- The Government, while liberalizing the regulatory environment, has also ensured that interests of consumers are 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.
Barrier-free trade in agriculture produce- Cabinet also approved ‘The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020’.
Background- Farmers in India today suffer from various restrictions in marketing their produce. There are restrictions for farmers in selling agri-produce outside the notified APMC market yards. The farmers are also restricted to sell the produce only to registered licensees of the State Governments.Further, Barriers exist in free flow of agriculture produce between various States owing to the prevalence of various APMC legislations enacted by the State Governments.
Benefits- The Ordinance 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 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 lower prices. The ordinance also proposes an electronic trading in transaction platform for ensuring a seamless trade electronically.The farmers will not be charged any cess or levy for sale of their produce under this Act.
One India, One Agriculture Market- The ordinance basically aims at creating additional trading opportunities outside the APMC market yards to help farmers get remunerative prices due to additional competition. This will supplement the existing MSP procurement system which is providing stable income to farmers. It will certainly pave the way for creating ‘One India, One Agriculture Market’ and will lay the foundation for ensuring golden harvests for our hard working farmers.
Farmers empowered to engage with processors, aggregators, wholesalers, large retailers, exporters — Cabinet approved ‘The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020’.It also approved ‘The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020’.