New farm legal guidelines herald new period of market freedom: Economic Survey

Image Source : ANI New farm legal guidelines herald new period of market freedom: Economic Survey
Amid raging protests over new farm legal guidelines, the federal government’s pre-Budget state of financial system doc on Friday went the additional mile to record advantages of the three contentious legal guidelines, saying that moreover giving market freedom, they are going to assist increase incomes of small and marginal farmers. The Economic Survey 2020-21, tabled in Parliament by Finance Minister Nirmala Sitharaman, had in two sections talked about concerning the three payments, detailing their salient options in addition to the advantages that they are going to carry.
Defending the three new farm legal guidelines strongly, the Survey mentioned they herald a brand new period of market freedom which might go a good distance in bettering lives of small and marginal farmers in India.
These legislations have been designed “primarily” for the advantage of “small and marginal farmers”, which represent round 85 per cent of the entire variety of farmers and are the most important sufferer of the “regressive” APMC-regulated market regime, it added.
Thousands of farmers, primarily from Punjab, Haryana and Western Uttar Pradesh, are protesting at numerous borders of the nationwide capital in search of repeal of those legislations. They have expressed considerations that the legal guidelines are pro-corporate and will weaken government-regulated mandis, additionally known as Agriculture Produce Marketing Committees (APMCs).
Eleven rounds of talks between the federal government and round 40 unions have failed to interrupt the impasse.
“The reforms in the agricultural sector were more overdue than even the labour reforms as the existing laws kept the Indian farmer enslaved to the local mandi and their rent-seeking intermediaries. While every other category of producer in India had the freedom to decide where to sell his/ her produce, the Indian farmer did not,” the doc noticed.
The native monopolists created by this authorized infrastructure enabled the intermediaries to prosper at the price of the farmer, particularly the poor ones.
The survey highlighted that “agricultural reforms enable the farmer to sell where he gets the best deal and thereby enable competition that is sine qua non to create welfare for the small farmer”.
Listing the advantages, the doc mentioned that reforms in agriculture markets will allow creation of ‘One India one market’ for agri-products, create innumerable alternatives for farmers to maneuver up the worth chain in meals processing — from farm to fork, create jobs and improve incomes.
Several Economic Surveys have expressed concern on the functioning of the APMCs and the truth that they sponsor monopolies. Specifically, Economic
Surveys for the years 2011-12, 2012-13, 2013-14, 2014-15, 2016-17, 2019-20 centered on the reforms required on this context.
Many committees have really useful agri-market reforms since 2001, together with by the National Commission on Farmers chaired by M S Swaminathan and Taskforce on Employment Opportunities headed by Montek Singh Ahluwalia, as per the survey.
In September 2020, Parliament handed three farm legal guidelines — The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 and The Essential Commodities(Amendment) Act, 2020.
“The newly introduced farm laws herald a new era of market freedom which can go a long way in the improvement of farmer welfare in India,” the survey mentioned.      
According to the survey, the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020 will empower farmers of their engagement with processors, wholesalers, aggregators, massive retailers, exporters and can present a degree enjoying discipline.

It will switch the danger of market unpredictability from the farmer to the sponsor and in addition allow the farmer to entry fashionable know-how and higher inputs. Farmers have been offered satisfactory safety as sale, lease or mortgage of farmers’ land is completely prohibited and farmers’ land can be protected in opposition to any restoration.
The farmers can have full energy within the contract to repair a sale value of their alternative for the produce. They will obtain cost inside a most of three days.
As a part of this legislation, 10,000 Farmer Producer Organizations are being fashioned all through the nation. These FPOs will carry collectively small farmers and work to make sure remunerative pricing for farm produce.
After signing the contract, farmers won’t have to hunt out merchants because the buying client might want to take the produce immediately from the farm.
The Essential Commodities (Amendment) Act 2020 removes commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the record of important commodities. This goals to take away fears in personal traders from extreme regulatory interference of their enterprise operations.
The freedom to provide, maintain, transfer, distribute and provide will result in harnessing of economies of scale and can entice personal sector/ overseas direct funding into the agriculture sector. The laws will assist drive up funding in chilly storages and modernisation of the meals provide chain, the survey mentioned.
Pointing out farmers’ plight, the report mentioned that farmers have suffered from numerous restrictions in advertising and marketing their produce.
They weren’t allowed to promote outdoors the notified APMC market yards. The farmers have been restricted to promote their produce solely to registered licensees of the state governments.
Further, limitations existed in free movement of agriculture produce between numerous states owing to the prevalence of assorted APMC legislations enacted by the state governments.
The APMC rules have certainly resulted in quite a few “inefficiencies and consequent loss to the farmers”.
“The presence of multiple intermediaries between the farmers and the final consumers has led to low realisation by farmers. Further, a large range of taxes and cesses levied by APMCs cuts into farmers’ price realisation while only a small proportion is ploughed back into the development of mandi infrastructure. Poor infrastructure at the mandis compounds the problem of price realisation for the farmers,” it mentioned.
Long queues of farmers ready, most frequently, within the sizzling solar to promote their produce with restricted capacity to take their produce elsewhere even when the worth is larger in one other mandi is a attribute function of APMC mandis, the survey mentioned.
The delays lead to massive post-harvest losses to the tune of 4-6 per cent in cereals and pulses, 7-12 per cent in greens and 6-18 per cent in fruits.
Total post-harvest losses have been estimated at Rs 44,000 crore at 2009 wholesale costs.
“Recognising the above limitations of existing market regulations, various committees had recommended several reforms in the marketing of agricultural commodities,” the survey mentioned. 
Latest Business News