Third tranche offers sweeping reforms for farm sector

Finance minister Nirmala Sitharaman on Friday rolled out sweeping reforms for the farm sector including a central law to allow farmers to sell his produce freely and amendment to the essential commodities act moving cereals, edible oils, pulses, onions and potatoes out of its purview.
She also unveiled a Rs 1.50 lakh crore package for the farm sector including a dedicated fund to create farm gate infrastructure and aid formalisation of micro food enterprises to take them global.

“Why should a farmer be restricted to sell to a licensed entity? There should be no barriers to his trade... He should be allowed to e-trade... A central is being proposed,” Finance minister Nirmala Sitharaman said announcing the third part of the Rs 20 lakh crore stimulus package aimed at reviving growth, which has stalled because of the Covid-19 pandemic and the lockdown that’s been put in place to curb the outbreak.

She said the aspects that the central legislation covers come under the centre’s purview.

“This is a major reform... farmer will be able to sell to whosoever he wants to even inter-state..,” said Tarun Bajaj, sectetary, department of economic affairs said. Bajaj said central law will prevail it as an concurrent subject.

A separate legal framework will also be created to enforce a standard mechanism predictable prices of crops.

On the essential commodities act, curbs would not be placed on these commodities except in certain situations like national calamity.

The government has been unveiling the overall Rs 20 lakh crore programme in stages since Wednesday, when Sitharaman announced schemes worth Rs 5.94 lakh, which included a Rs 3 lakh crore credit guarantee for micro, small and medium enterprises (MSMEs). On Thursday, she unveiled steps aimed at benefiting migrant workers, farmers, street vendors and the urban poor. They included free food grains, credit support and a new affordable rental housing scheme, adding up to about Rs 2.46 lakh crore.

Prime Minister Narendra Modi had said Tuesday that the Atmanirbhar Bharat Abhiyaan, equivalent to about 10% of GDP, was aimed at creating a self-reliant India. The total figure includes earlier packages announced by the government and the Reserve Bank of India.
Funding Agriculture

“This will immediately address the funding gap...It will strengthen farm gate infrastructure,” Sitharaman said.

Friday’s package includes creation of a special Rs 1 lakh crore for farm aggregators, Farmer Producer Organisations and primary Cooperative Societies to strengthen cold chains, storage centres. It would fund agri-related entities including start ups working in farm sector. “This fund would be created immediately,” She said.