New law for contract-farming 

#GS2 #Governance #GS3 #Agriculture 

  • Centre to push through agri-marketing reforms as part of stimulus package 
  • Making long-pending agricultural marketing reforms the centrepiece of the third tranche of the Atmanirbhar Bharat Abhiyan economic stimulus package, Union Finance Minister announced plans to enact a central law to permit barrier-free inter-State trade of farm commodities and ensure a legal framework to facilitate contract farming. 
  • The third tranche also included plans to invest ₹1.5 lakh crore to build farm-gate infrastructure and support logistics needs for fishworkers, livestock farmers, vegetable growers, beekeepers and related activities, although this includes some previously budgeted money and extensions of existing schemes.  
  • The Centre will deregulate the sale of six types of agricultural produce, including cereals, edible oils, oilseeds, pulses, onions and potatoes, by amending the Essential Commodities Act, 1955. 
  • Several agricultural economists and farm activists welcomed the reform and investment announcements, but questioned the lack of immediate support to help farmers survive the current crisis. 
  • The Essential Commodities Act was enacted at a time of food scarcity, and needs to reflect current concerns.  
  • Now what is happening is that farmers are producing.  
  • There is an abundance of crops, and this sometimes leads to issues because they would want to export, and we don’t permit that.  
  • Because of a flip-flop sometimes, farmers don’t get the benefit.  
  • Some other times, the consumers suffer, so there is a need to amend the Act. 

No stock limit 

  • Stock limits will not be imposed on these commodities except in case of national calamity or famine or an extraordinary surge in prices.  
  • The Centre has been attempting to reform agricultural marketing through a model Act which it encourages States to adopt.  
  • However, it now intends to enact a central law to allow farmers to sell produce at attractive prices beyond the current mandi system, facilitating barrier-free inter-State trade and e-trading.  
  • Asked how the Centre could enact a law on agricultural marketing, which remains on the State list, the Minister pointed out that inter-State trade falls in the central list. 
  • The Centre has been attempting to reform agricultural marketing through a model Act which it encourages States to adopt.  
  • However, it now intends to enact a central law to allow farmers to sell produce at attractive prices beyond the current mandi system, facilitating barrier-free inter-State trade and e-trading.  
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