NEW DELHI :
The Centre on Friday said it will introduce a slew of reforms to change the way farmers in India market their produce in a bid to help them receive better prices at the farm gate. The proposed marketing reforms comes close on the heels of heightened distress when farmers across India are either dumping or selling their perishable produce at measly prices due to a lockdown-induced supply disruption and fall in demand.
The proposed reforms—from amending the Essential Commodities Act to electronic marketing of harvests—are steps towards a new regime where farm produce is traded seamlessly across state borders and farmers have multiple options to sell their produce.
“The proposed reforms may turn out to be useful for farmers in the long run but these will not compensate farmers for the losses they suffered during the lockdown,” said Sudhir Panwar, a farm activist and former member of the Uttar Pradesh state planning board.
Currently, farmers across India are forced to sell their produce at the nearest registered markets regulated by state laws, primarily Agriculture Produce Marketing Committee or APMC Acts. In these markets, non-transparent trader cartels determine prices leaving farmers with little choice.
In the third tranche of relief measures to counter the coronavirus lockdown woes, finance minister Nirmala Sitharaman announced that the “government will bring in a law to introduce agriculture marketing reforms to provide adequate choices to farmers to sell their produce at attractive rates.” However, it remains unclear how long a roll-out may take. Agriculture marketing is a state subject and the Centre can only propose a law that can be adopted by states.
In fact, the Centre had introduced a model marketing law more than three years back with a similar intent, which states were slow to adopt. Also, some states such as Maharashtra had removed perishables from the ambit of APMCs, but that did not stop the distress faced by farmers during the ongoing lockdown.
The other crucial announcement, amending the Essential Commodities Act, 1955, will allow buyers to stock farm produce without a limit, which the government hopes, will lead to higher investments in creating infrastructure and make the farm sector competitive. The state will only impose stock limits in “exceptional circumstances” like natural calamities and a surge in retail prices, the government said. The caveat is how frequently the government will invoke these provisions; for instance, the government has always kept a hawk’s eye on rising food inflation by carrying out raids on traders whenever retail prices surged. But it has been slow to act when farmers dump their produce, be it onions or tomatoes, for want of a better price.
At the moment, it remains unclear how other proposed reforms to introduce predictability of prices at the time of planting will be implemented. Other than the minimum support price regime for crops like rice and wheat, price guarantees are difficult to implement for perishables. Also, a model contract farming Act introduced by the government did not change the ground reality for farmers.
The government also said it will introduce barrier-free inter-state trade and set up a framework for electronic trading. The history here is chequered. The existing electronic National Agriculture Market did not take off since inter-state trade was not allowed by state governments. The Centre is yet to spell out if the proposed changes will entail a single trade licence for the entire country or do away with licences altogether.