India Approves Ordinance To Allow Farmers To Freely Sell Produce

India approved an ordinance to ensure a barrier-free trade in agricultural produce, a move that's aimed at increasing farmers' income at a time Asia's third-largest economy is gradually reopening after a more than two-month lockdown to contain the coronavirus.

The cabinet chaired by Prime Minister Narendra Modi approved the Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 that aims at promoting inter- and intra-state trade outside the markets notified under State Agricultural Produce Marketing legislations. It will help farmers with surplus produce to get better prices, according to a government statement.

The move is part of the government's ‘Atmanirbhar Bharat Abhiyan'. Last month, Finance Minister Nirmala Sitharaman announced a Rs 20-lakh-crore post-pandemic financial package, equivalent to 10% of the nation's GDP, to help revive the economy that's headed for its first full-year contraction in more than four decades.

“States APMC Act would continue but the areas that do not come under APMC, be it farmer's house, companies, processing industry, Farmer Produce Organizations can go to his house and buy the produce,” said Narendra Singh Tomar, minister of Agriculture and Farmers' Welfare. Outside APMC mandis, there will be a trading area, and no tax of any form will be levied on sale and purchases, he said.

Besides, a trader or entity, Farmer Produce Organizations, and cooperative sector holding a PAN card “can definitely” buy farmers' produce, Tomar said. That's aimed at preventing legal roadblocks and ‘Inspector Raj'.

But it isn't clear whether holding a PAN card will be mandatory to buy the produce.

The buyers, Tomar said, will have to pay farmers immediately or within three days. After the delivery, the buyer will have to give a receipt mentioning goods procured, and details of when the payment will be made.

The disputes between traders and farmers have been kept out of courts' ambit, Tomar said, adding the sub-divisional magistrate will hear the matter and settle it within 30 days. In case of an unsatisfactory order, a farmer can approach the collector.

The ordinance also proposes an online platform for a seamless trade. Any individual can create the electronic market but the rules will be formulated by the central government. The central government, according to Tomar, will take action if any online platform is found in any form of wrongdoing.

Among other decisions, the cabinet approved an ordinance to facilitate legal framework for farmers to engage with processors, aggregators, retailers, and exporters.

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 will provide a framework to offer risk mitigation for farmers, assured returns and quality standardisation.

Besides, the Essential Commodities Act will be amended to remove commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. Such products will be deregulated, helping farmers to better realise prices.