Union Cabinet amends Essential Commodities Act

New Delhi: The Union Cabinet today has approved an amendment to the Essential Commodities Act. With the amendment to the Act, commodities like cereals, pulses, oilseeds, edible oils, onion, and potatoes will be removed from the 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 the agriculture sector. It will help drive up investment in cold storages and modernization of food supply chain,” said Union Agriculture Minister, Narendra Singh Tomar.

Commenting on the same, Vijay Sardana, leading Agri-Food Business & Techno-Legal Expert, said, “It is a very good development. It gives a direct connection between farmers and buyers. The farmer will be in a position to decide whom to sell. If he does not want to sell, he can store the material wherever he wants. He has full freedom now. It will benefit consumers also. Because consumers can directly deal with farmers now. There is no need for them to go to mandis to buy any material.”

Sardana further added, “The law will also create a new set of rules, a new set of players in the market. Many players will buy from farmers and stock. That will also create a lot of infrastructures. There will be a competition now. There are 14 crore families.  There are 140 crore consumers.  There will be a lot of demand now. A new set of entrepreneurs will come up. Infrastructure will come up. Even international buyers can buy from farmers.”

While India has become surplus in most agri-commodities, farmers have been unable to get better prices due to lack of investment in cold storage, warehouses, processing, and export. Farmers suffer losses when there are bumper harvests, especially of perishable commodities. With adequate processing facilities, much of this wastage can be reduced.

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.