An executive order tweaking the Essential Commodities Act -- dubbed "historic" by the government -- was approved today by the Union cabinet which will do away with regulations on a chunk of items like potatoes and onions, enabling farmers to get higher prices. A second executive order, or ordinance, to promote barrier-free trade in agricultural produce was also approved. This will allow farmers to engage with processors, aggregators, wholesalers, large retailers, exporters within and outside the state.
"We are all moving towards One Nation, One Market," Union minister Prakash Javadekar said after the Cabinet meeting, chaired by Prime Minister Narendra Modi. "This is a visionary step towards transformation of agriculture and raising farmers' income," the government said.
"Anaj (vegetables), oil, onion, potato have been removed from under the Essential Commodities Act. Now farmers can store their produce sell to whoever they want. When there is a natural calamity, war, price rise, only then the Act may be invoked," Mr Javadekar said.
"Farmers have wanted this for a long time. We are doing it. Farmers now have been freed from APMC. They now have the freedom to sell at the highest price available or offered," he added.
Later in the evening, PM Modi tweeted:
Today's Cabinet decisions will have a very positive impact on rural India, especially our industrious farmers.— Narendra Modi (@narendramodi) June 3, 2020
Long-pending agrarian reforms will enable the transformation of the sector. https://t.co/iLkNAGXgTH
The tweak in the Essential Commodities Act was meant to bring out cereals, pulses, oilseeds, edible oils, onion and potatoes from list of essential commodities that kept their prices under regulation. It kept private investors away, ensuring the lack of proper infrastructure and storage facilities and resulted in losses for farmers whenever there was a bumper crop.
Now with the bar of Essential Commodities gone, there is expectation that the sector will attract private and foreign direct investment.
"Amendment to the Essential Commodities Act will ensure better income for farmers. Furthermore, it would mean lesser regulatory influence, greater investment in food processing, cold storages and having modern supply chains," another tweet from PM Modi read.
'The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020', is meant to do away with the restrictions the farmers face while marketing produce.
In a tweet, PM Modi said, "Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 will 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."
The farmers are under a set of restrictions in selling their produce outside the notified APMC market yards. They are expected to sell the produce only to registered licensees of their respective state governments. The new Ordinance will allow farmers to choose where and to whom they sell their produce.