COVID-19 And Agricultural Reforms

The pandemic had caused serious economic consequences for the economy and had invited multiple disruptions. The government launched a major push towards self-reliance by announcing the “Atmanirbhar Abhiyan” in May 2020.

Reforms

The Campaign included three historic policy decisions towards the agricultural reforms.

  • Essential Commodities Act amended – the Act of 1955 was amended to help both the farmers and consumers while bringing in price stability by creating competitive market environment and preventing wastage of agri-produce that happens due to lack of storage facilities.

In most of the agri-commodities, India has become surplus but the farmers have been unable to get better prices due to lack of investment in cold-storage, warehouses, processing and export as the entrepreneurial spirit gets dampened due to hanging sword of the Act. As the commodities are of perishable nature, farmers face huge losses even there are bumper harvests. The wastage could be reduced through adequate processing facilities.

Through this reform following benefits will be ensued-

  • Commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes will be removed from the list of essential commodities. Hence, it would remove the fear of private investors of excessive regulatory interference in their business operations.
  • The freedom to hold, produce, move, distribute and supply will lead to harnessing of the economies of scale and affect private sector and foreign direct investment into agricultural sector.
  • It will help drive up investment in cold storages and modernization of food supply chain.
  • In situations such as war, famine, extraordinary price rise and natural calamity, such as agricultural food stuff can be regulated.
  • Barrier Free Trade – in order to produce barrier free trade of farm produce the Farming Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 has been passed. There are several restrictions imposed on farmers for selling their agri produce outside the notified APMCs (Agricultural Producing Marketing Committees) market yards. The farmers are also restricted to sell the produce only to the registered licensees  of the State Governments.

This historic step of unlocking the vastly regulated agricultural markets in the country would bring the following benefits to the farmers –

  • It will create an ecosystem where the farmers and traders will enjoy the choice of sale and purchase of agri-produce.
  • It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under state APMC legislations.
  • It will open more choices for the farmer, reduce marketing costs for the farmers and help them in getting better prices.
  • It will help farmers of regions with surplus produce to get better prices and consumers of regions with shortages, lower prices.
  • Farmers not to be charged any cess or levy for sale of their produce under it.
  • A separate dispute resolution mechanism to be set up for the farmers.

It was aimed at creating additional trading opportunities outside the APMC market yards to help farmers to get remunerative prices by inducing additional competition-paving the way for creating “One India, One Agricultural Market”.

  • Freedom to engage with buyers : the government has passed the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020. This Act will act as a catalyst to attract private sector investment for building supply chains for farm produce to global markets and enable farmers to get access to technology and advice for high value agriculture. Indian agricultural is characterized by fragmentation due to small holdings and has certain weakness such as weather dependence, production uncertainties and market unpredictability, which makes agriculture risk and inefficient in respect of both input and output management.

Following benefits would be ensued through these reforms-

  • It would empower farmers for engaging with processors, wholesalers, aggregators, large retailers, exporters on a level playing field without any fear of exploitation.
  • It would transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs.
  • It will remove the cost of marketing and improve income of farmers,
  • Farmers will engage in direct marketing and it would enable eliminating intermediaries resulting in full realisation of price.

Conclusion-

The new farm laws have been criticized by the farm leaders and political opposition alike and the country has seen a prolonged farm protest since late November 2020 from the farmers of Haryana, Punjab and Western Uttar Pradesh. The Government claims that these laws are meant for the benefit of farmers.

References

Ramesh Singh, “Indian Economy (Mc Graw Hill Education (India) Private Limited, 13th edn.) 8.30

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

If you are interested in participating in the same, do let me know.

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We are also running a series Inspirational Women from January 2021 to March 31,2021, featuring around 1000 stories about Indian Women, who changed the world. #choosetochallenge

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