Landmark decision: Govt to amend Essential Commodities Act

The Cabinet today gave its approval to amend the Essential Commodities Act, 1955, in a bid to deregulate food items which will help increase farmers’ income. Besides, it has brought about two ordinances with to transform the agriculture sector.

Announcing the decision after the Cabinet meeting, Union Minister Prakash Javadekar said, “Farmers can now export or store these commodities as they wish.” These have been our farmers’ demands pending for nearly 50 years now, he added.

Last month, while announcing the Rs 20-lakh economic package, Finance Minister Nirmala Sitharaman had laid out the Centre’s intentions to bring in structural reforms in various sectors including agriculture.

The Cabinet has also given its nod for the Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, which will facilitate free trade in agricultural produce.

Agriculture Minister Narendra Singh Tomar said, “This will go a long way in helping India’s farmers, while also transforming the agriculture sector.”

“This is a historic-step in unlocking the vastly regulated agricultural markets in the country,” he added.

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Tomar said that while India has been sitting on surplus produce of most agri-commodities, due to the Essential Commodities Act, farmers have not been able to get better prices because of the dearth of cold storages and infrastructure facilitating processing and exports.

“Farmers suffer huge losses when there are bumper harvests of perishable commodities. With adequate processing facilities, much of this wastage can be reduced. This will remove fears of private investors of excessive regulatory interference,” he said.

The Cabinet also approved the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020, to empower farmers to engage with processors, aggregators, wholesalers, large retailers and exporters.

Until now, farmers had to sell agriculture produce only to the licensees in Agricultural Produce Market Committees (APMCs).

“The APMC Act of the states will remain. The Ordinance is separate from the model APMC Act. It does not touch the market of states. All states are on board,” Tomar said, adding that Punjab and Haryana will be big beneficiaries..