Finance Minister Nirmala Sitharaman proposed amendments to the Essential Commodities Act

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On Friday, Finance Minister Nirmala Sitharaman proposed amendments to the Essential Commodities Act to enable better price realisation for farmers and said no stock limit should apply to processors or value chain participants.

The Essential Commodities Act 1955 was enacted in days of scarcity. The Govt. will amend it. Agriculture foodstuff including cereals, edible oils, oilseeds, pulses, onions and potatoes will be deregulated and stock limits will be imposed under exceptional circumstances, Sitharaman said.

“We need to enable better price realisation for farmers by attracting investments and making agriculture sector competitive. Stock limits will apply under very exceptional circumstances like national calamities or famines with a surge in prices.”

The Finance Minister also proposed another radical agriculture marketing reform for providing marketing choices to farmers.

She said that “A central law will be formulated to provide adequate choice to farmers to sell produce at an attractive price. A farmer should have no barriers for inter-state trade and there should be a framework for e-trading of agriculture produce”.

At the moment, farmers are bound to seel agriculture produce only to licensees in the agricultural produce market committee. Such restriction is not there for industrial products, said Sitharaman.

Besides, she proposed a legal framework for agriculture produce price and quality assurance. At present, farmers lack an enforceable standard mechanism for predictable prices of crops at the time of sowing.

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As a result, private sector investment in the provision of inputs and know-how is hindered.

The Finance Minister said that “The facilitative legal framework will be created to enable farmers for engaging with processors, aggregators, large retailers and exporters. Risk mitigation for farmers, assured returns and quality standardisation will form an integral part of the framework”.

She added, “In today’s situation, if a challenge can be treated as an opportunity to improve the system and bring new technology for the benefit of farmers and people, then why not do it?” 

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