Govt to announce changes in essential commodities act, dismantling of APMC: Sources

Amendments in the essential commodities act, dismantling of Agricultural Produce Market Committee (APMC) and a new price signalling system for farmers will be among the major agricultural reforms to be announced after the Union Cabinet’s meeting on Monday, sources said.

Officials, in the know of the developments, also said a new definition of Ministry of Micro, Small and Medium Enterprises will be put in place.

Prime Minister Narendra Modi chaired the meeting of the Union cabinet on Monday as the country entered the first day of the Centre’s three-phased unlocking plan throughout the country.

This was the first meeting of the Union cabinet after the central government entered into its second year in office.

The Centre had said in May it will amend the Essential Commodities Act to deregulate food items like cereals, pulses and onion besides bringing a new law to give marketing choice to farmers for enhancing their income.

Union finance minister Nirmala Sitharaman had said the government will amend the EC act to make the agriculture sector more competitive and ensure better price realisation to farmers. This will also help in attracting investment in the farm sector.

The government had also said it will also frame a new law to provide marketing choices to farmers.

The central law will be formulated to provide adequate choices to farmers to sell their produce at an attractive price. It will enable interstate trade without restrictions and create a framework for electronic trading of farm products.

Farmers currently are bound to sell agriculture produce only through APMC mandis, which restrict the free flow of farm products. At present, farmers lack an enforceable standard mechanism for predictable prices of crops at the time of sowing, the government had said.

The Economic Survey had earlier this year pitched for the scrapping of the essential commodities act, saying the law is “anachronistic” that leads to harassment and is of no help in checking price volatility.

The act was enacted to control production, supply and distribution of, and trade and commerce in, certain goods considered as essential commodities.

The act does not lay out rules and regulations but allows states to issue control orders related to dealer licensing, regulate stock limits, restrict the movement of goods and requirements of compulsory purchases under a levy system.

(With agency inputs)