Government amended the Essential Commodities Act to boost Rural India

Government amended the Essential Commodities Act to boost Rural India

Landmark decisions to benefit farmers and transform the agriculture sector.

Regulatory environment liberalized for farmers through amendment to Essential Commodities Act.

Ordinance to promote barrier-free inter-state and intra-state trade in agriculture.

New Delhi: In a major boost to rural India, the Union government amended the Essential Commodities Act (ECA), empowering farmers to engage with processors, aggregators, wholesalers, large retailers and exporters. The Union Cabinet chaired by Prime Minister Narendra Modi took several historic decisions to help farmers while also transforming the agriculture sector.

While addressing a press brief on Wednesday, the Government said that it had approved the historic amendment to the Essential Commodities Act. Talking about the amendment, Union Minister for Information and Broadcasting Prakash Javadekar stated that the decision will transform the agriculture sector.

Prakash Javadekar said, “The amendment announced will help both farmers and consumers while bringing in price stability.  It will create competitive market environment and also prevent wastage of agri-produce that happens due to lack of storage facilities.”

With the amendment to Essential Commodities Act, commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes will be removed from list of essential commodities. This will remove fears of private investors of excessive regulatory interference in their business operations.

The freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector/foreign direct investment into agriculture sector. It will help drive up investment in cold storages and modernization of food supply chain.

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.

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