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Essential Commodities (Amendment) Bill, 2020

Essential Commodities (Amendment) Bill, 2020

Context:

Lok Sabha passes Essential Commodities (Amendment) Bill, 2020.

  • The Bill will replace the Essential Commodities (Amendment) Ordinance which was promulgated on 5th June 2020.

Highlights of the Ordinance:

  • The ordinance allows intra-state and inter-state trade of farmers’ produce beyond the physical premises of APMC markets.  State governments are prohibited from levying any market fee, cess, or levy outside APMC areas. 
  •  The ordinance creates a framework for contract farming through an agreement between a farmer and a buyer prior to the production or rearing of any farm produce.  It provides for a three-level dispute settlement mechanism: the conciliation board, Sub-Divisional Magistrate and Appellate Authority.
  •  It allows the central government to regulate the supply of certain food items only under extraordinary circumstances (such as war and famine).  Stock limits may be imposed on agricultural produce only if there is a steep price rise. 

Key Issues:

  • The ordinance aims to increase the availability of buyers for farmers’ produce, by allowing them to trade freely without any license or stock limit, so that an increase in competition among them results in better prices for farmers.  
  • While the Ordinances also aim to liberalize trade and increase the number of buyers, de-regulation alone may not be sufficient to attract more buyers.
  •  The Standing Committee on Agriculture noted that the availability of a transparent, easily accessible, and efficient marketing platform is a pre-requisite to ensure remunerative prices for farmers.  
    • Most farmers lack access to government procurement facilities and APMC markets.  It noted that small rural markets can emerge as a viable alternative for agricultural marketing if they are provided with adequate infrastructure facilities.  
  •  The Standing Committee also recommended that the Gramin Agricultural Markets scheme (which aims to improve infrastructure and civic facilities in 22,000 Gramin Haats across the country) should be made a fully funded central scheme and scaled to ensure the presence of a Haat in each panchayat of the country.

Essential Commodities (Amendment) Bill, 2020:

  • The Bill seeks to amend the Essential Commodities Act, 1955, and empowers the central government in terms of production, supply, distribution, trade, and commerce of certain commodities.
  • The bill also seeks to increase competition in the agriculture sector and enhance farmers’ income.  The bill aims to liberalize the regulatory system while protecting the interests of consumers.
  • The bill empowers the central government to designate certain commodities including food items, fertilizers, and petroleum products as essential commodities.
  • Supply of certain food items including cereals, pulses, potato, onions, edible oilseeds, and oils, can be regulated by the government under extraordinary circumstances as per the provisions of this bill.  
    • The extraordinary circumstances include war, famine, extraordinary price rise, and natural calamity of grave nature.
  • The bill empowers the central government to regulate the stock of an essential commodity that a person can hold.  
  • The provisions of the bill regarding the regulation of food items and the imposition of stock limits will however not apply to any government order relating to the Public Distribution System or the Targeted Public Distribution System.

Source: The Hindu