Measures for Agri sector

18/05/2020

The lockdown has brought most of the economic activities to a standstill as factories and businesses were shut while rendering thousands temporarily unemployed, has since been extended twice through May 17, with some relaxations to allow resumption of economic activities. Now, in the third tranche of the COVID-19 economic package, the Government has announced a slew of measures for agriculture sector, including a Rs 1.63 lakh crore outlay, and amending the stringent Essential Commodities Act (ECA) to remove cereals, edible oil, oilseeds, pulses, onions and potato from its purview. Also, a new law will be framed to give farmers the option to choose the market where they want to sell their produce by removing inter-state trade barriers and providing e-trading of agriculture produce. Announcing the third tranche of an overall package of Rs 20 lakh crore to deal with the economic fallout of the COVID-19 pandemic, Finance Minister Nirmala Sitharaman said foodstuffs, including cereals, edible oils, oilseeds, pulses, onion, and potato, will be deregulated after the amendment to the six-and-half-decade old Essential Commodities Act. The Act empowers the Government to regulate price as well as stocks of commodities. The stock limit will be imposed only under very exceptional circumstances like national calamities and famine when there is a surge in prices. Further, no such stock limit shall apply to processors or value chain participants, subject to their installed capacity, or to any exporter, depending on the export demand.
Farmers currently are bound to sell agriculture produce only to licensees in APMCs (Agricultural Produce Market Committees) while no such restriction of sale applies for any industrial produce. These restrictions hinder the free flow of agriculture produce and lead to lower price realisation for farmers. To deal with the situation, a law will be formulated to provide adequate choices to farmer to sell produce at an attractive price, barrier-free inter-state trade and framework for e-trading of agriculture produce. The Rs 1.63 lakh crore agriculture package, aimed at strengthening infrastructure, logistics and capacity building, also has schemes for micro food enterprises, cattle vaccination, dairy sector, herbal plantation, beekeeping and fruits and vegetables. A Rs 15,000 crore Animal Husbandry Infrastructure Development Fund has also been announced to support private investment in dairy processing, value addition and cattle feed infrastructure.

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