Cabinet clears ordinances for agriculture market reforms

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SME Times News Bureau | 04 Jun, 2020
The Union Cabinet on Wednesday gave its approval to three landmark decisions for helping farmers and transforming the agriculture sector, which include amendment to the Essential Commodities Act, Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020.

Briefing on the decisions taken in the Cabinet meeting headed by Prime Minister Narendra Modi, Minister of Agriculture and Farmers' Welfare Narendra Singh Tomar said the ordinance will create an ecosystem where farmers and traders will enjoy freedom of choice of sale and purchase of agri-produce.

The Minister said the country has approximately 14 crore farmers and 85 per cent of them do not get remunerative prices for their produce, but these reforms will enable them to get better prices.

With the amendment to the Essential Commodities Act, commodities such as cereals, pulses, oilseeds, edible oils, onion and potatoes will be removed from the list of essential commodities. The government says this will remove fears of private investors about excessive regulatory interference in their business operations.

Tomar said Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance will promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under the state Agricultural Produce Marketing legislations. "This is a historic step in unlocking the vastly regulated agriculture markets in the country," said the Minister.

There are restrictions on farmers for selling agri-produce outside the notified APMC market yards. The farmers are also restricted to sell the produce only to the registered licensees of state governments.

Barriers exist in free-flow of agricultural produce between various states owing to the prevalence of various APMC laws enacted by the state governments.

The ordinance basically aims at creating additional trading opportunities outside the APMC market yards to help farmers get remunerative prices due to additional competition.

"The ordinance will certainly pave the way for creating One India, One Agriculture Market", said the Agriculture Ministry.

Tomar said The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers and exporters on a level-playing field without any fear of exploitation.

This Ordinance will act as a catalyst to attract private sector investment for building supply chains for Indian farm produce across global markets. Farmers will get access to technology and advice for high-value agriculture products and get ready market for such produce, said Agriculture Ministry in a statement.