The Union Cabinet on Wednesday approved an amendment to the Essential Commodities Act of 1955 to “deregulate” agricultural commodities like cereals, pulses, oil seeds, onions and potatoes. The Cabinet also promulgated an ordinance to allow farmers to engage with processors, aggregators, large retailers and exporters.
These proposals were part of the Rs 20 lakh crore economic relief package announced by Prime Minister Narendra Modi to revive the economy following the nationwide lockdown to contain the coronavirus.
Agriculture Minister Narendra Singh Tomar described the amendments to the six-and-a-half decade old act as historic and said that they will “go a long way in helping India’s farmers while also transforming the agriculture sector”. “The proposed amendment to the Essential Commodities Act will allay fears of private investors of excessive regulatory interference,” he added.
The Cabinet also approved “The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020” to ensure barrier-free trade in agriculture produce, Tomar said. “It will not bind farmers to sell their crop only to licensed traders in the Agricultural Produce Market Committee mandis of their respective talukas or districts,” he added. “Besides, the ‘Farmers [Empowerment and Protection] Agreement on Price Assurance and Farm Services Ordinance, 2020’ will empower farmers for engaging with processors, aggregators, large retailers, exporters on a level playing field without any fear of exploitation.”
On May 17, the Ministry of Consumer Affairs, Food and Public Distribution had circulated a draft of the ordinance to amend the Essential Commodities Act, according to The Indian Express. The Economic Survey 2019-’20 described the act as “anachronistic” and recommended the “jettisoning” of the law.
Meanwhile, Modi said the Centre’s decisions would have a “very positive impact” on rural India, especially on industrious farmers. “Long-pending agrarian reforms will enable the transformation of the sector,” he tweeted. “Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 would pave the way for the creation of ‘One India, One Agriculture Market’. There are provisions which increase usage of technology and enable effective dispute resolution mechanisms.”