Unpacking The Reform

Context: Ordinances on agriculture to facilitate trade in agricultural produce shows unwise haste, may harm along with the good.

Analysis of recent ordinances on agriculture:

• Farming Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020:

• Formalisation:The largest informal sector in the country will be formalised and new business models will develop. 

• A different breed of aggregators will create the competition to the monopoly of local traders.

• Farmers cannot legally be charged commission :On the sale of farm produce when they sell outside APMC market yards.

• Due to this APMCs across the nation will rationalise mandi fee structure and limit the commission charged on sale of farmers’ produce.

• Concerns:

• An unregulated marketplace is created where 15 crore farmers will be exposed to the skulduggery of traders. 
• States will lose vital revenue to even upgrade and repair rural infrastructure.

• Amendment to the Essential Commodities Act (ECA), 1955: 

• Address the fears of traders: emitting from the bureaucracy’s draconian powers to arbitrarily evoke stock holding limits etc.

• Concerns:

• The amendment’s fine print makes it ambiguous and leaves space for interpretations. 
• Arbitrary import-export policy decisions of the government dilute the purpose of the amendment itself.

• The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020:

• Address the fears: of both the farmer and the contractor when they sign an agreement. 
• Not subject to obstructionist laws: for the products derived from contract farming operations.

• Concerns:

• For the farmers, the legal recourse is not a practical choice.
• Delay in legal proceedings - makes farmers not seek redressal or settle for unfavorable terms.

Conclusion: Ordinances on agriculture to facilitate trade in agricultural produce are well intended but there is a need to address the long term concerns.