Modi government seeks to give boost to rural India, cabinet clears key decisions to benefit farmers, transform agriculture

The union cabinet, chaired by Prime Minister Narendra Modi, on Wednesday took several landmark decisions concerning the farm sector to help boost farmers' incomes and transform the agriculture sector.

This includes approval to amendment to the Essential Commodities Act and two ordinances - Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020.

The amendment to Essential Commodities Act is a significant decision for the farm sector "to liberalise regulatory environment for farmers".

Commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes will be removed from list of essential commodities.

An official release said this will remove fears of private investors of excessive regulatory interference in their business operations.

"The freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector/foreign direct investment into the agriculture sector. It will help drive up investment in cold storages and modernization of the food supply chain," it said.

The release said that the amendment announced will help both farmers and consumers while bringing in price stability.

It will create a competitive market environment and also prevent wastage of agri-produce that happens due to lack of storage facilities.

The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 will pave the way for the creation of an ecosystem where farmers and traders will have the freedom of choice in sale and purchase of agri-produce.

An official release said it will promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations and help in unlocking the vastly regulated agriculture markets in the country.

The ordinance will help open more choices for the farmer, reduce marketing costs for the farmers and help them in getting better prices, it said.

The release said the ordinance will also help farmers of regions with surplus produce to get better prices and consumers of regions with shortages get lower prices.

The ordinance also proposes electronic trading in transaction platform for ensuring a seamless trade electronically.

The farmers will not be charged any cess or levy for sale of their produce. There will be a separate dispute resolution mechsm for the farmers.

The release said that the ordinance will "certainly pave the way for creating One India, One Agriculture Market".

The ordinance aims at creating additional trading opportunities outside the Agricultural Produce Market Committee (APMC) market yards to help farmers get remunerative prices due to additional competition.

"This will supplement the existing MSP procurement system which is providing stable income to farmers. It will certainly pave the way for creating One India, One Agriculture Market and will lay the foundation for ensuring golden harvests for our hard-working farmers," the release said.

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 will enable the farmers to engage with processors, aggregators, wholesalers, large retailers, exporters.

The release said that ordinance "will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs which will reduce the cost of marketing and improve the income of farmers."

"Farmers have been provided with adequate protection. Sale, lease or mortgage of farmers' land is totally prohibited and farmers' land is also protected against any recovery. Effective dispute resolution mechsm has been provided for with clear timelines for redressal," he said.

Finance Minister Nirmala Sitharaman had made the announcement about the government's intent to bring reforms in agriculture marketing while giving out details of the comprehensive economic package announced by Prime Minister Narendra Modi last month.

The release said that the central government has announced a series of steps to provide a boost to those engaged in agriculture and allied activities.

These include provision of concessional credit through Kisan Credit Cards, financing facility for agri-infra projects, Pradhan Mantri Matsya Sampada Yojana, vaccination against Foot and Mouth Disease and Brucellosis, herbal cultivation promotion and boost to beekeeping.

( With inputs from ANI )