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Govt lockdown package frees farmers from mandi monopoly, strips essentials of stock limits

Soumitra

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Govt lockdown package frees farmers from mandi monopoly, strips essentials of stock limits

New Delhi: The Modi government announced major reforms in the agriculture sector, including freeing farmers from mandi monopoly, as it continued to unveil the contours of its Rs 20 lakh crore lockdown relief package.

At a press conference Friday, the third in as many days with regard to the package, Finance Minister Nirmala Sitharaman said the government will amend the Essential Commodities Act to exclude cereals, edible oils, oil seeds, pulses, onions and potato.

The government, she added, will also bring in a central law that will allow farmers to directly sell their produce to buyers of their choice, and even undertake inter-state trade.

These steps will enable price realisation for Indian farmers, Sitharaman said. “The focus of the announcements so far has been more about empowerment than entitlement,” she added.

New Delhi: The Modi government announced major reforms in the agriculture sector, including freeing farmers from mandi monopoly, as it continued to unveil the contours of its Rs 20 lakh crore lockdown relief package.

At a press conference Friday, the third in as many days with regard to the package, Finance Minister Nirmala Sitharaman said the government will amend the Essential Commodities Act to exclude cereals, edible oils, oil seeds, pulses, onions and potato.

The government, she added, will also bring in a central law that will allow farmers to directly sell their produce to buyers of their choice, and even undertake inter-state trade.


These steps will enable price realisation for Indian farmers, Sitharaman said. “The focus of the announcements so far has been more about empowerment than entitlement,” she added.
Amendments to Essential Commodities Act
Stock limits are enforced by the government to check hoarding and price rise of essential commodities.

The government’s proposed amendments to the Essential Commodities Act will ensure stock limits are not imposed on any of the aforementioned commodities except in circumstances like national calamities or a huge surge in prices.

For instance, under the proposed framework, the stock limit will only become applicable in the event of a 100 per cent price increase for horticulture produce like onion and 50 per cent for non-perishable commodities like edible oil.


Stock limits will also not apply to food processors or value chain firms, subject to their installed capacity, and on exporters, subject to their export demand.

This reform will remove a major hurdle for farmers and the food supply chain industry. The amendment was also suggested in the Economic Survey 2020.

Doing away with mandi monopoly
The government has also decided to free farmers from Agricultural Produce Market Committee (APMC) monopoly after a number of states did the same in recent days through ordinances.

Farmers can currently only sell their produce to traders who have a mandi licence under the APMC Act.

Pointing out that no such restrictions are placed on industrial produce, Sitharaman said the proposed central law will look to empower farmers to sell their produce at attractive prices while facilitating barrier-free inter-state trade.

The central law will also provide a framework for e-trading of agricultural produce.


In addition, the government said it will bring in a “legal framework” that will help farmers predict the prices of crops at the time of sowing, and engage with processors, aggregators, large retailers and exporters.

The framework will also help mitigate risks for farmers and standardise quality in the agriculture sector, Sitharaman added.

A Rs 10,000 crore boost to agri infrastructure
Other measures for farmers include a Rs 1 lakh crore agri infrastructure fund, to be created by the National bank for agriculture and rural development (NABARD), to bolster infrastructure.

This will help in the creation of adequate cold supply chains and post-harvest management infrastructure, Sitharaman said.

The government also announced a fund of Rs 10,000 crore for setting up micro food enterprises on a “cluster approach”.

The reforms announced Friday have been long-pending. Although the government said it will help boost farmer earnings, they are expected to provide little immediate assistance to farmers who have seen their incomes fall on account of the COVID-19 pandemic and the subsequent lockdown.

https://theprint.in/economy/govt-lo...oly-strips-essentials-of-stock-limits/422582/
 

Nilgiri

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@Soumitra

Its long overdue, actually something BJP should have done in 1st term early on. But glad to see it now.

Farmers always need access to as wide a selection of buyers as possible to improve the market in general! More information = better prices for all.
 

jamahir

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I wonder where is @jamahir he keeps on lamenting about poor farmers and now he is no where to be found
Firstly, in one of the tweets, Contract Farming is mentioned. This was already part of the farming policy before these new regulations. There is a TV ad, I think by Aashirwaad aata, which says that the aata processor company buys the wheat directly from the farmers, without I suppose going though the APMC process.

Secondly, these new regulations do not remove the socio-economic problems that the farmers already face. Their poverty will not end. On Wednesday I was watching the repeat of Indian Idol Season 10 and a young married woman was a contestant from a Northeastern state. She had come to the auditions in Calcutta or Delhi. Her husband, who was a farmer, had taken a loan of five lakhs by pawning his farmland for them to make the trip to the auditions. Yes, one of the judges, Neha Kakkar, gifted five lakhs to the husband and wife to take back their land but it will give you an idea of life of farmers. It would have been very difficult for the young couple to pay back the five lakh loan plus interest if it hadn't been for Neha's gift. Indian Idol Season 10 is recent.
 
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Naofumi

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Good questions. And we were discussing the last one yesterday.

@Soumitra
There's also questions about the real effect which includes factors like inertia, poor execution and a general miscalculation like we saw in demonetisation and GST but I leaved it for now because in theory we can always call a success, so let's wait.

Swamy has some concerns too though I don't know how much to take him seriously
 

Nilgiri

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1) Is there a government's/any scholar's estimation to calculate how much it'll increase the farmer's income?
Nope. All depends somewhat on the particular farmer, but there will be a general increase, as more direct connection to buyers always helps them (and the buyer too)....more information = basis of free efficient market and wealth.

2) Where will those now jobless Mandiwalas go?
Find other more productive work. We prefer them to keep taking their cut through forced govt legislation?

It would be welcome model to look into. WB was ahead of curve. But federally there is movement toward that now as DBT etc..comes through individual basis rather than threshold+registration+qualification basis (subject to both intrinsic unfairness and also babu+goonda-ism). Hopefully there is movement to full coverage (at some rational level) for sharecropper + contract labourers given they dont own the land they till and work on.

Swamy has some concerns too though I don't know how much to take him seriously
He is 100% correct on this one, if thats true. That is some very big BS and should be remedied ASAP.

Worth watching:


Have to watch this one still, it looks promising:

 

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