Mandatory MSP and Levies on non-APMC markets will be an assault on the reforms the Union government has ushered in with the new farm laws Currently, under the APMC system, a farmer has to pay three levies on the produce she brings to the mandi, notified by the state government under its APMC Act. —————————————————————— To address the concerns of agitating farmers over the three farm bills enacted in September, the Union minister for agriculture & farmers welfare, NS Tomar, has agreed to consider (i) strengthening the APMC (Agricultural Produce Market Committee) by imposing levies at ‘uniform’ rate on purchase at APMC and non-APMC platforms—latter now permitted under the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; and...
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Category: Pricing Policies & Subsidies
Don’t kill the goose that lays the golden egg
In a bid to accommodate the concerns of agitating farmers over the three farm bills enacted by Modi – government in September, 2020, the Union Minister for Agriculture & Farmers Welfare, Narendra S Tomar has given positive signal on following points:- (i) require every trader transacting with the farmers to register (under the extant law, the former only needs to have PAN number); (ii) in the event of dispute, allow farmer to go to higher courts (the present law provides for dispute resolution at magistrate’s level); (iii) strengthen the APMC (Agricultural Produce Market Committee) by imposing levies at ‘uniform’ rate on purchase at APMC and non-APMC platforms – transactions at the latter are permitted following enactment of the Central law...
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Plug the leaks
The Government should stop selling food at a subsidised price through the PDS. Instead, it should limit its role to crediting subsidy directly to the accounts of beneficiaries Since 2014, the Narendra Modi Government has weeded out close to 44 million bogus ration cards by using the Information Technology (IT) infrastructure viz. digitisation, seeding of Aadhaar on ration cards, electronic point of sale machines at retail shops and so on. However, this addresses only a small aspect of the problem and that, too, is unlikely to be rooted out completely with the use of technology alone. Besides, large-scale diversion and black marketing of grain, inclusion of the privileged among beneficiaries, a ballooning subsidy bill and so on will persist so long as...
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Food distribution – stem the rot
During the past seven years or so, the government has weeded out close to 44 million bogus ration cards with 17 million junked in Uttar Pradesh (UP) alone (other states where substantial number of bogus ration cards have been weeded out include West Bengal 7 million, Maharashtra 4 million besides Karnataka, Rajasthan and Telangana where more than a million each have been eliminated). This has happened mostly under Modi – government. It successfully used the IT infrastructure (digitization, seeding of ration cards with Aadhar and installation of electronic PoS machine at retail shops). Currently, there are 230 million ration cards (815 million individual beneficiaries). The weeded out bogus cards or 44 million is about 20%. This is creditable especially when...
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Food for thought
The co-existence of APMC and non-APMC markets giving competition to each other is the best foot forward for ensuring a fair deal to farmers The enactment of the three farm laws by the Central Government has triggered agitations by farmers’ organisations and a spate of counters, specially from non-NDA ruled States. Their main worry is that growers won’t get the Minimum Support Price (MSP) on sales made outside the Agricultural Produce Market Committee (APMC) mandis (markets). All this, when it is well-known that under the APMC, agriculturists are already getting a raw deal. The constitutional validity of the farm laws has been challenged in the Supreme Court, too, with the Chhattisgarh Government arguing that these have in effect repealed the...
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Agri – reform bills – don’t mislead farmers
On June 5, 2020, the Government of India (GOI) had promulgated three Ordinances to bring about far reaching reforms in the marketing of agricultural produce. During the current (Monsoon) session, it got the relevant bills passed by the Parliament. Put simply, the bills and their objectives are as under:- The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 provides for freedom of choice to the farmer or trader to conduct trade and commerce while any trader having a permanent account number (PAN) is allowed to buy directly from farmers outside the designated APMCs (Agricultural Produce Market Committee). The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 on ‘contract farming’ provides a legal framework...
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Future mortgaged for food
Tax collections are far from adequate to pay for free food and the Govt is borrowing heavily to make up for the shortfall, thereby imposing an unsustainable burden on the future generation of taxpayers To shield millions of poor from the devastation caused by the Covid-19, Finance Minister Nirmala Sitharaman had announced that the Government would give five kg of rice or wheat per person per month for “free” to around 80 crore people through the Public Distribution System (PDS) for three months. It would also give for “free” one kg of pulses per household for three months. This was in addition to five kg of cereals per person per month that 80 crore beneficiaries are already getting at a heavily-subsidised price...
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Securing food by mortgaging future
To shield millions of poor against devastation caused by Covid – 19, on March 26, 2020, the finance minister, Nirmala Sitharaman had announced that the government would give 5 kg of rice or wheat per person per month for ‘free’ to around 80 crore people through the public distribution system (PDS) for 3 months; it would also give for ‘free’ one kg of preferred and region specific choice of pulse per household for 3 months. This was in addition to 5 kg of cereals per person per month, 80 crore persons are already getting at a heavily subsidized price of Rs 3 per kg rice, Rs 2 per kg wheat & Rs 1 per kg under the National Food Security...
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Hope sprouts in the farm
The Government deserves some credit for at least putting on the table long-pending reforms in agri-marketing, which if carried through, will be truly revolutionary Heralding a new chapter in agricultural market reforms in India, on May 15 Finance Minister Nirmala Sitharaman made three major announcements under the “Atma Nirbhar Bharat Abhiyan.” The first announcement was about the Centre’s decision to enact a legislation to enable direct purchase of specified commodities — under entry 42 of the Union List and entry 33 of the Concurrent List — from farmers outside the designated Agricultural Produce Market Committees (APMCs). Next was the move to enact a Central law on contract farming to provide a legal framework for farmers to engage with processors, aggregators,...
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Agri-market reforms – the big bang
Heralding a new chapter in agricultural market reforms in India, on May 15, 2020, the finance minister, Nirmala Sitharaman made three major announcements under ‘Atmanirbhar Bharat Abhiyan’. (i) enact a central legislation to enable direct purchase of specified commodities – under Entry 42 of the Union List and Entry 33 of the Concurrent List – from the farmers outside the designated APMCs [Agricultural Produce Market Committee]; (ii) enact a Central law on ‘contract farming’ to provide a legal framework for farmers to engage with processors, aggregators, large retailers and exporters in a ‘fair’ and ‘transparent’ manner; (iii) amend the Essential Commodities Act [ECA] [1954] to take off pulses, cereals, edible oil, oil seeds, onions and potatoes from the purview of...
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