Written By Nikhil Sawhney
The recent amendments to the decades-old Essential Commodities Act (ECA), following up on Finance Minister Nirmala Sitharaman’s ‘Atmanirbhar Bharat’ economic stimulus measures, have ushered in major deregulation of the agricultural market in India.
The reforms that government has undertaken in these testing times for making “One Country, One Market” for agriculture will enable achievement of the vision of doubling farmers’ income by 2022.
We at CII had for long been advocating with the central and state governments to deregulate the agriculture sector and empower the farmer to sell his produce wherever he gets the best remuneration for his harvest.
These amendments, while enhancing the income of farmers, are also likely to have a domino effect in improving the entire agriculture value chain right from Farm to the Fork wherein the industry would also now feel encouraged to bring in more investments in cold storage, warehouses, processing and export creating opportunities that are waiting to be unlocked.
We all know that because of its diverse geographic and climatic conditions, India has been one of biggest farm producers in the world for a wide array of cereals, pulses, oilseeds, edible oils and staples such as onion and potatoes.
However with government regulating the stock and supply of these under the ECA 1955, industry players were restricted from infusing investments, adding the right inputs and introducing efficiency into the sector.
The amendments in the APMC (Agricultural Produce Market Committee) Act have now also provided much needed independence to farmers from vastly regulated agricultural markets in the country. The farmers are now free to sell their produce outside their defined APMC markets.
These decisions would now also empower our farmers to engage with processors, aggregators, large retailers, exporters etc without the fear of exploitation. Additionally, reform of the APMC system would help them connect with new technologies, varieties and farm practices which will bring more income and sources of revenue to our farm and rural sector.
The ordinance to promote contract farming is another landmark move which will enable greater private sector participation in agriculture. Farmer producer groups can now enter into agreements with large retailers, exporters, and aggregators for purchase of crops on a large scale. With corporates supporting production with better inputs and technology, the stage is set for enhancing yield and output of crops including fruits and vegetables.
As a significant agri producer, India can also address global food markets more successfully through this linkage introduced in the new policies. While the facilitative legal framework is a move in the right direction it is hoped that this framework would be transparent and fair to both the seller and the buyer.
The other measures such as to accept the recommendation of Dr M S Swaminathan Committee, to enhance the MSP to 50% higher than input cost would greatly add to the cheer of our farmer brethren.
While Government of India has surely undertaken agriculture reforms in the right direction, the states now carry the onus to move forward by facilitating inter and intra-state trade of agri commodities without any disruptions. I do hope that states will also expedite and fast track the reforms pending at their end which will allow the Industry and the farming fraternity to join forces and unlock the opportunities to make India’s agriculture sector globally competitive.
(The writer is Chairman, CII Northern Region)
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