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Business News/ News / India/  Rajya Sabha okays Bill that lifts controls on key farm produce
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Rajya Sabha okays Bill that lifts controls on key farm produce

By amending the Essential Commodities Act, govt hopes to woo investments, strengthen supply chain

The government has been facing opposition from political parties and farmer bodies over the agri reform Bills.ptiPremium
The government has been facing opposition from political parties and farmer bodies over the agri reform Bills.pti

The Rajya Sabha on Tuesday passed the Essential Commodities (Amendment) Bill, 2020 that removes controls on the holding and supply of key farm produce like cereals, pulses, oilseeds, edible oils, onion and potatoes.

According to the government, dropping these items from the list of highly regulated essential commodities will free up the market, ensure supplies for exports and boost investments in agriculture sector and improve price realisation for farmers.

This was one of the three farm Bills passed by the Rajya Sabha in the current session as the government pressed ahead with farm sector reforms as part of efforts to boost economic growth. Two other Bills—one that gives freedom to trade in farm produce anywhere in the country and another one creating a framework for contract farming—were passed in Rajya Sabha on Sunday.

Stock holding limits have been used to check price rise and the government can still prescribe holding limits on these items during extreme situations like war or famine in order to protect consumer interest. However, the installed capacity of a value chain participant and the export demand of an exporter will remain exempt from such stock limit imposition so that investments in agriculture are not discouraged, an official statement said after the Bill was passed.

By amending the Essential Commodities Act, the government hopes to attract more investments into agriculture and allied activities, the largest employer in the economy. The freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector or foreign direct investment into agriculture sector, said the statement. It will help drive up investment in cold storages and modernization of food supply chain, it said.

Minister of state (MoS) for consumer affairs, food and public distribution Danve Raosaheb Dadarao said the amendment was required to prevent wastage of agricultural produce due to lack of storage facilities, and that it will also strengthen the overall supply chain mechanism of the agriculture sector. Farmers often suffer huge losses during bumper harvests, especially of perishable commodities due to lack of storage facilities.

The amendment will create a positive environment for farmers, consumers and investors and aims to make the country self-reliant, he said in Rajya Sabha.

The government, however, faced opposition from political parties, farmer bodies and from within the National Democratic Alliance coalition. Senior leader of Shiromani Akali Dal (SAD) and food processing minister Harsimrat Kaur Badal resigned from the Union cabinet last week in protest against the Bills. Farmers in Punjab and Haryana have been protesting against the legislation, fearing it could weaken the minimum support price (MSP) regime.

Prime Minister Modi has sought to assure farmers saying farm sector reforms bring more opportunities for farmers and that they should not be misled by those who want to keep farmers in shackles.

“Now it is being propagated that the benefit of MSP will not be given to the farmers by the government. It is also being said that the government will not buy paddy, wheat etc. from farmers. This is a sheer lie. Farmers are being deceived. Our government is committed to provide fair prices to farmers through MSP. Government procurement will continue as before," Modi had said last week.

shreya.n@livemint.com

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Published: 23 Sep 2020, 08:00 AM IST
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