Agricultural reforms during COVID 19 and its impact on Agricultural Marketing

Agricultural reforms during COVID 19 and its impact on Agricultural Marketing

Covid 19 has affected every nook of life. Almost all the sectors of economy were badly affected by COVID 19 and the Lockdown which was imposed by the government to save the people from this pandemic. The lockdown 1.0 to 4.0 or maybe more has left people empty hands and there were expectations from government to provide some basic relief. Government also time to time announced various relief measures and sum of all the measures comes in the magic figure of Rs. 20 Lakhs Crores, which was announced by Prime Minister in his address to nation. He gave the basic idea about relief package and also proposed for self reliant India so called Aatamnirbhar Bharat.

The description of relief package came in 5 tranches, which were presented by Finance Minister through power point presentations. As per presentation number 3, lots of benefits in form of budgetary allocation, reforms, funds for allied activities etc. were announced for agriculture sector. Two of them are changes in essential commodity act 1955 and APMC Act.

These two acts are very important for agricultural marketing point of view. As per essential commodities Act 1955, there were provisions that the private players like agricultural wholesalers, food processors, private millers etc cannot store more than specified quantity to avoid hoarding or create artificial scarcity. By changing the law it is understood that these market participants will now store more and farmer have more choices to sell the produce and there will be competition in market. On the other side APMC Act is to be amended and farmer can now sell his produce to any other place and not compulsory have to sell in APMC Market. This will also enable the farmer to sell his produce to his choice and it is understood that this will increase his income.

These assumptions were proposed and marketed that it will be game changer in agricultural marketing field. But basic question arises is that who stopped the government to do these things in past. If the conditions of act were so harmful to farmers it should be the duty of government to abolish these provisions when the government feel that this is bad. However it is very much understood that farmers were already have option to sell the produce anywhere as per the provisions of model act 2003, but the condition is that he has to sell the produce to registered licensee so that in case of payment problem to farmers the money can be recovered from the defaulter buyers whose credentials were recorded in registering agency. This provision was there to avoid cheating to farmers considering that some clever trader will cheat with them. APMCs were concerned about their market fees and would check whether trader is giving correct returns or not. Management of APMC were also an area of concerns. Every APMC has a governing body which consist farmer members, trader member and officials from different disciplines. Initially the purpose of farmer members in committee is to highlight the farmer’s problem and plan for development of farmer friendly marketing infrastructure. Later on these positions became the positions to adjust the political people who were unable to find place in government.

It was observed that in field of agricultural marketing, conditions remain smooth when demand and supply are equal. But problem arises when there is more supply. The buyers deny buying more and farmer left no option to sell his produce at throw away price. This provision still prevails when there is marginally high supply, but in case of excessive supply the logistic system exhausts and there is no lifting of produce beyond that level and crops are thrown on roads. If the private players as mentioned above are also there, and their requirements are full, there will be no lifting of produce. Thus the changes which were made in essential commodity act of APMC Act will not have any positive effect.

In the case of low arrival scenario, there is demand from every side. The private players have targets to buy the produce to meet the year long industry requirement and government has its own buying targets. This is the best time to farmer to maximize his gains but at this time due to pressure from consumers and rising prices or excessive burden on government exchequer for central pool buying, Government will act through EC ACT. In both the ways farmer is on losing side. There is need for creative thinking and find alternatives to meet this demand supply chain rather than amending or scrapping the existing acts and system.

   

The random experimentation will lead to disruption in existing system which is already in place and taking away the markets from farmers reach.

#Essential Commodity ACT #APMC #Agricultural Marketing #Farmer Distress #COVID 19 and Indian Agriculture #Wholesale Markets #Mandis