Government Approves Amendment of Essential Commodity Act to Benefit Farmers

The government approves the amendment of the Essential Commodity Act, 1955 to benefit farmers. The government finally makes a move to attract investment in the farming sector.

Amendment of Essential Commodity Act

The Union Cabinet approved the amendments to the six-decade-old Essential Commodities Act on 3rd June. The move will deregulate the production, purchase, and sales of cereals, edible oils, oilseeds, pulses, onions, and potato.

While addressing the media Union Minister Prakash Javadekar stated that farmers being freed from constraints of the Agriculture Produce Marketing Committee (APMC). Further, he added that the formation of ECA was based on shortage and now that the country produces surplus agricultural commodities, the act has become a constraint.

Transformation of Agriculture

Union Agriculture Minister, Narendra Singh Tomar said that the Essential Commodities Act Amendment envisions the transformation of the agriculture sector and increasing farmers’ income. The freedom to sell will help farmers to harness economies of scale and will attract private and foreign direct investments.

Further, it will help boost investment in cold storages and modernization of the food supply chain. Also, this will free farmers from selling their produce to their filed level APMC mandis. The act will allay the fears of private investors over excessive regulatory interferences.

Essential Commodity Act Amendment to Encourage Efficiency in Farming Operations

The officials noted that though India produces a surplus of agricultural commodities, farmers are unable to get attractive prices. Despite bumper harvests, they suffer losses. With deregulation will come the freedom to achieve efficiency in processing facilities and reduction in wastage.

Other Ordinances 

The Cabinet also approved Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020. This ordinance will allow farmers to engage with processors, aggregators, large retailers, and exporters.

The government announced the Farmers Empowerment and Protection Agreement on Price Assurance and Farm Services Ordinance, 2020. This ordinance will transfer the risk of market unpredictability from the farmer to the sponsor. Besides, it will enable farmers to access modern technology and better inputs. Also, it will reduce the cost of marketing and improve the income of farmers.

Nirmala Sitharaman announced the Essential Commodity Act amendment as a part of the Rs 20 lakh crore stimulus package. The package aimed at helping the poor and vulnerable, farmers, small businesses, and corporates hit by the coronavirus epidemic.

In all, the decision will give more choices and will help farmers to get better prices.

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