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‘Essential Commodities (Amendment) Act should be called Food Hoarding (Freedom for Corporates) Act’

“It has been established that when there is a price rise in the retail market, the benefit is not passed on to the farmers, who sell at low prices mostly, and high prices of commodities will affect consumers too,” it added.

Written by Anju Agnihotri Chaba | Jalandhar |
December 18, 2020 9:58:25 am
farmers protest, Essential Commodities Act, PDS (Public Distribution System, Bhartiya Kisan Union, MSP, All India Kisan Sangharsh Coordination Committee, AIKSCC, Indian Express News, Indian ExpressFarmer unions at a press conference at Singhu Border. (Express Photo by Praveen Khanna)

Farmer Groups say that while there has been much talk about two of the contentious farm laws, the government is still silent on the third one — the Essential Commodities (Amendment) Act. While the other two Acts will hit farmers hard, farm experts and unions believe that it is this third one that is “anti-human” and will affect not only farmers, but also the urban and rural poor that come under the Public Distribution System (PDS), jeopardising the food security of the consumer.

Jagmohan Singh Patiala, general secretary, Bharti Kisan Union (BKU) Ekta (Dakaunda), said, “This Act is not only anti-farmer, anti-consumer, but anti-human as it will hit the urban and rural poor consumers falling under the PDS. People will die of hunger if this is implemented.” Farm unions said that food security for consumers will be in jeopardy as PDS the could be wound up.

“While the government claims that the current Acts have got nothing to do with the procurement regime under the existing MSP regime, in the EC Amendment Act, it is stated that ‘nothing contained in this sub-section shall apply to any order relating to the PDS or the Targeted PDS, made by the Government under this Act or under any other law for the time being in force’,” said the All India Kisan Sangharsh Coordination Committee (AIKSCC), adding that the Act does not state that PDS will continue.

“In fact, TPDS is specifically stated along with PDS amid reports that the government will narrow down its support to food security for consumers with further targeting rather than universalisation. Importantly, it qualifies the non-applicability to PDS and TPDS ‘for the time being in force’ and this ‘time being in force’ is very sinister,” says the AIKSCC in its letter to the government.

“Even if the government give some cash to the people falling under PDS to purchase things from the market, it will not work as successful as PDS owing to several reasons including price fluctuation in the market and several other reasons like cash may lead people to purchase other things rather than the ration,” said Jagmohan, adding that it will lead to hunger deaths.

It will affect both farmers and common consumers. In their objections sent to the government regarding this Bill, farm unions jointly said that the preamble of this Act says that the purpose of it is “enhancing income of farmers” but the Essential Commodity (EC) Act, 1955, was never about farmers or their incomes. There was no restriction under ECA on farmers or Farmer Producer Organisations (FPOs) from stocking produce and selling it. The restriction was on agri-business companies and traders, which have the large means to stock farmers’ produce.

“Now, those restrictions are being removed for all food commodities, so it gives them to purchase and store any quantities, hence indulge in hoarding. Therefore it should be called the ‘Food Hoarding (Freedom for Corporates) Act’,” the AIKSCC further said in its letter.

The committee said that there used to be several regulatory tools with the government in the earlier ECA 1955 – licensing, price control, compulsory licensing, stocking, information collection and produce for inspection records, entry/search/examination of premises and seizure etc. but all of this is being thrown away now.

“‘Section 7’ of the Contract Farming Act states that the ‘obligation related to stock limit shall not be applicable to such quantities of farming produce as are purchased under a farming agreement entered into in accordance with the provisions of this Act’. Companies will now have freedom to stock any amount of food commodities and they will build huge storage and processing facilities, and build complete market domination. This means that they will dictate terms to farmers – which is likely to lead to less prices to farmers,” the AIKSCC said.

“When unlimited stocking of essential commodities like cereals, pulses, oilseed, onion, potato will lead to price rise and false shortage will be created by the hoarders to up the price of these essential commodities, the consumer will also come under a big burden due to high price of even essential goods,” said Prof. Gian Singh, a farm expert, adding that now the government has excluded all these food items from the list of essential commodities and will regulate these only under extraordinary circumstances like war, famine, extraordinary price rise or natural calamity and several things are also unexplained — like how an “extraordinary price rise” will be decided.

Farm unions said there is a big concern around invisibilising stocks in the country of different food stuffs. There are different regulatory regimes applicable between registered warehouses and private players now.

Apart from this, “the implications for trade and food support policies are apparent, when the government does not have information on food stocks and where they exist, whether they exist, in what quantities etc.,” said the AIKSCC letter.

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