Union Cabinet amends Essential Commodities Act, cereals, pulses removed from list

The Union Cabinet on June 3^rd, 2020, approved an amendment to the Essential Commodities Act to deregulate food items, including cereals and onion.

Calling it a historic amendment to the act, the government claimed that it is a visionary step towards transformation of agriculture and raising farmers’ income.

Under this amendment, farm produce like cereals, pulses, oilseeds, edible oils, onion and potatoes will be removed from the list of essential commodities. The freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract the private sector, foreign direct investment into the agriculture sector, the government said in a press release, adding that it will help drive up investment in cold storages and modernization of food supply chain.

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The Government, while liberalizing the regulatory environment, has also ensured that interests of consumers are safeguarded.  It has been provided in the Amendment, that in situations such as war, famine, extraordinary price rise and natural calamity, such agricultural foodstuff can be regulated.  However, the installed capacity of a value chain participant and the export demand of an exporter will remain exempted from such stock limit imposition so as to ensure that investments in agriculture are not discouraged.

The amendment announced will help both farmers and consumers while bringing in price stability.  It will also prevent wastage of agri-produce that happens due to lack of storage facilities.

"It has been provided in the Amendment, that in situations such as war, famine, extraordinary price rise and natural calamity, such agricultural foodstuff can be regulated.  However, the installed capacity of a value chain participant and the export demand of an exporter will remain exempted from such stock limit imposition so as to ensure that investments in agriculture are not discouraged," the press release said.

The amendment announced will help both farmers and consumers while bringing in price stability, it said, adding that it will also prevent wastage of agri-produce that happens due to lack of storage facilities.

In another major decision, the Union Cabinet headed by Prime Minister Narendra Modi also approved 'The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020' which will remove restrictions for farmers in selling agri-produce outside the notified APMC market yards.

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