Government unleashes pending reforms to reform agriculture

NEW DELHI: The Center launched three crucial, long-overdue reforms on Friday to reshape the architecture of the ties between farmers and the market, allowing them to sell their products without restrictions, and also unveiled a fund of Rs 1 lakh crore to build agricultural infrastructure to raise productivity and make the sector globally competitive.

The finance minister announced the fund and said the far-reaching political reforms were part of an 11-point action plan to revive the sector and guarantee better yields for farmers. The government will amend the Commodity Law of 1955, draft a central law on agricultural marketing, and create a legal framework to provide price guarantees to farmers and help improve the quality of their products.

This was the third tranche of the Rs 20-lakh-crore package that the Prime Minister Narendra Modi has announced that the nurse's economy will return to health. Atmanirbhar Bharat's policy aims to make the Indian economy competitive and become a major player in the global supply chain behind the backs of Make in India products.

Seen with recent announcements, the measures aim to increase farm incomes and encourage partner industries to offset the impact of Covid-19 on the farm sector, even as the Center has taken steps to secure acquisition to keep the rural economy in movement.

The Rs 1 lakh crore agricultural infrastructure fund will be created immediately, Sitharaman said, adding that the money would be spent on setting up infrastructure projects at the farm gates and at aggregation points (primary agricultural cooperative societies, organizations agricultural producers, agricultural entrepreneurs and new companies))

The need to improve the connection between the farm gate and retail has been on the table for a long time, but action has been late.

More about Covid-19


Better infrastructure is intended to complement the flexibility farmers are expected to gain from the proposed agricultural reforms. They must be able to directly sell agricultural products to any private entity or food processing company from the farm gates and registered warehouses without the licensing mechanism of the mandis (agricultural markets) currently registered under the Product Marketing Committee Act Agricultural.

Experts said the reforms put forward by the FM will help improve the linkage of the agricultural sector to markets and will also boost contract agriculture, while private sector participation will help attract better technology, inputs and market knowledge for farmers. farmers.

These are big reforms. They should have happened in the first term of the Narendra Modi government. Now, they have done it so der aye durust aye (better late than never), said Ashok Gulati, Infosys chair professor at economic thinktank ICRIER .

He said the reform and Quality Assurance were aimed at allowing contract farming. Previously, it was based on state discretion and was on a case-by-case basis, but now there will be a central law that will allow direct purchase from farmers, Gulati said. He added that the quality of agricultural products would improve as large retail buyers would insist on quality. Most importantly, it will allow markets to intervene. Farmers will not sow by looking at prices in the past but prices in the future. Therefore, the planting pattern will change somewhat as the market assures him of a particular price, he said.

Authorities explained that the interstate movement or sale of food grains was governed by central laws, even when Sitharaman said the law would address this aspect. It will assist in interstate commerce without barriers and provide a suitable option for farmers to sell their products at attractive prices, he said, adding that it would also assist in e-commerce for agricultural products.

The Center integrated 38 additional new mandis with the e-NAM (National Agriculture Market) platform on Friday, reaching a milestone of 1,000 mandis on this e-commerce portal for Indian agricultural products.

The amendment to the EC Law will deregulate agricultural foods, including cereals, edible oils, oilseeds, legumes, onions and potatoes. Unlike the existing law, the new law will impose stock limits in very exceptional circumstances, such as national calamities or an unexpected increase in prices.

No inventory limit will apply to processors or value chain participants, subject to their installed capacity or to any exporter subject to export demand, the FM said.

The third point of reform, a facilitating legal framework, will help farmers engage with processors, aggregators, large retailers, and exporters in a fair and transparent manner. It will help farmers to agree in advance with large merchants, processors and exporters to obtain the pre-agreed price for their products in terms of a contract farming type mechanism.

Other measures include a Rs 10,000-crore scheme for the formalization of food microenterprises with the aim of promoting the government's vision of vowels for the local approach with a global approach, a movement that will give impetus to a cluster-based approach to promote products. local through export. The finance minister cited examples such as makhana in Bihar, mango in UP, saffron in J&K, bamboo shoots in the northeast, chili peppers in Andhra Pradesh and tapioca in Tamil Nadu, among others, for advocacy and support through the cluster-based approach.

Sitharaman referred to the schemes announced in the Budget and said that the focus would be their implementation. She spoke of an allocation of Rs 20 billion for fishermen through the Pradhan Mantri Matsya Sampada Yojana, the ongoing national animal disease control program and the development of animal husbandry infrastructure through a fund of Rs 15 billion. rupees.