Government to amend Essential Commodities Act; agri foodstuffs to be deregulated

New Delhi, May 15: Finance Minister Nirmala Sitharaman on Friday said that the government will amend the Essential Commodities Act, 1955 to deregulate food items, including cereals, edible oil, oilseeds, pulses, onion and potato.

While announcing the third tranche of COVID-19 relief package, Sitharaman said that Agriculture foodstuff including cereals, edible oils, oilseeds, pulses, onions and potatoes to be deregulated under the Essential Commodities Act.

The amendment, besides deregulating production and sale of food products, will provide for no stock limit to be imposed on any produce. A stock limit will be imposed only under very exceptional circumstances like national calamities, famine with a surge in prices.

Also, no stock limit shall apply to processors or value chain participants, she said announcing the third tranche of economic relief package to deal with COVID-19 disruptions.

Also, agriculture marketing reforms will be done to provide marketing choices to farmers. She also announced new funds for fisheries, dairy development, herbal plantation and livestock vaccination. She said Rs 15,000 crore Animal Husbandry Infrastructure Development Fund will be set up to support investment in dairy processing, value addition and cattle feed infrastructure.

To ensure 100 per cent vaccination of all livestock against foot and mouth disease (FMD) Rs 13,343 crore will be provided, she said. As much as Rs 10,000 crore will be provided for fishermen through Pradhan Mantri Matsya Sampada Yojana (PMMSY).

For promoting herbal cultivation, Rs 4,000 crore National Medicinal Plants Fund will be started to help 10 lakh hectares to be covered under herbal cultivation.

Also, Operation Greens will be extended from tomato, onion and potato to all fruit and vegetables by providing 50 per cent subsidy on transportation and storage of these commodities, she said.

For beekeepers, a Rs 500-crore scheme was announced for infrastructure development and post-harvest facilities.

The EC Act is considered a major impediment in the growth of agriculture sector as traders are scared to buy more on the fear of imposition of stock holding limits anytime.

What is the Essential Commodities Act?

According to Essential Commodities Act 1955, If the central government is of opinion that it is necessary for maintaining or increasing supplies of any essential commodity, securing their equitable distribution and availability at fair prices or securing any essential commodity for the defence of India, it may provide for regulating or prohibiting the production, supply and distribution and trade and commerce therein.

In her third consecutive press briefing, Finance Minister Nirmala Sitharaman lays down the third tranche of the 20 lakh crore economic package announced under 'Atmanirbhar Bharat Abhiyan' for agriculture, dairy, animal husbandry, fisheries and other allied activities.

Sitharaman has been announcing measures under the Rs 20 lakh crore package announced by Prime Minister Narendra Modi, to mitigate the damage done by the coronavirus-induced lockdown since 25 March.