Modi government’s Agri-market reforms can be game-changer

Amid the Coronavirus pandemic struggle and prolonging lockdown, the Narendra Modi government last week announced an economic package worth Rs 20 lakh crore, with a slew of measures aiming to achieve the mission of an ‘Atma-nirbhar Bharat’ (self-reliant India).

With the agricultural sector facing major crises due to closure of markets and supply chain disruption, the government announced some prominent and long-overdue reforms to boost the agricultural sector. In the Rs 1,50,000 crore worth-third tranche of the economic package, Finance Minister Nirmala Sitharaman announced 11 major points for the expansion of agriculture and animal husbandry sectors.

One of the most crucial announcements was the proposed amendments to the archaic Essential Commodities Act and the Agricultural Produce Marketing Committee (APMC) Act, attempting to liberate the farmers from an obsolete regulation system. With the declaration that the Essential Commodities Act, 1955 will be amended, Finance Minister Nirmala Sitharaman said that edible oils, cereals, oilseeds, potatoes, pulses, and onion will be deregulated. This will enable price stabilization for both farmers and consumers and will facilitate investments in storage. Since the Atal Bihari Vajpayee regime, the Centre has been seeking to reform the APMC act to provide freedom to farmers to sell to buyers of their choice outside the mandi system.

The Finance Minister also announced that the government will be passing a central law allowing the farmers to sell their products to anyone with barrier-free inter-state trade, and an outlay to promote e-trading of agricultural produce.

Furthermore, the government has earmarked Rs. 1 lakh crore towards strengthening the farm-gate infrastructure through aggregators, agricultural startups, and farmers producers organizations. The funding will be run by the National Bank for Agriculture and Rural Development which will support the creation of economical and financially viable post-harvest management infrastructure and aggregation. A legal framework can potentially ensure contract farming that would allow the farmers to fix a price at the time of sowing the crops. It will facilitate cropping decisions based on fixed prices and mitigating market risks.

Notably, these crucial announcements for India’s agriculture sector are aimed at helping the stakeholder realize their potential, freeing pricing, and fostering supply chain.

The stimulus focuses on various branches of the agriculture and allied sector and farm industries. Agri experts have asserted that with such bold reforms for the promotion of the agricultural sector, it is a step in the right direction. Significantly, the agricultural sector has been subjected to certain restrictions that have been hindering the process and are no longer needed. Effective implementation of these reforms will help in securing India’s food security and supply chain in a self-sufficient manner in the longer-run.

Other announcements made by the Centre include an expansion of the Operation Greens from tomatoes, onion and potatoes to all fruits and vegetables, a vaccination drive against foot and mouth disease among cattle, supporting the fishermen community through the Pradhan Mantri Matsya Sampada Yojana, Rs 4,000 crore for development of herbal cultivation, a Rs 15,000-crore Animal Husbandry Infrastructure Development Fund, and a Rs 500 crore scheme for boosting beekeeping.

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