In a major step to revive rural economy which got severely impacted due to fallout of coronavirus pandemic and the two month long lockdown which was imposed to control its spread, Prime Minister Narendra Modi led union government on Wednesday announced a series of steps to help farmers sell their produce better by amending the Essential Commodities Act (ECA).

The union government feels the move will help promote ‘freedom to produce, hold, move, distribute and supply’ and attract private sector as well as foreign direct investment in agriculture. Experts feel the move is politically significant not just because the government is looking to address distress in the rural sector by making institutional changes but add that it could receive pushback from state particularly those under opposition governments.

“Cabinet decisions will have a very positive impact on rural India, especially our industrious farmers. Long-pending agrarian reforms will enable the transformation of the sector,” tweeted Prime Minister Narendra Modi soon after the decision.

Interestingly the steps taken by the union government at the national level have already been announced by a few states that are under the rule of Bharatiya Janata Party (BJP) governments. Among the states that have amended the rules are Uttar Pradesh, Karnataka, Gujarat and Madhya Pradesh giving the farmers the freedom to sell their produce to an entity of their choice by amending the Agricultural Produce Marketing Committee (APMC) Act.

“Through this ordinance, the union government’s attempt is to free farmers from the regulations they were bound by. Mandis will stay. APMC (agriculture produce market committee) Act of states will stay but in areas outside of its purview, even if it is a farmer’s house, any company, organization, processing industry can go and buy their produce at optimum price…no tax will be imposed on it,” union agriculture minister Narendra Singh Tomar said while addressing a media briefing about decisions taken in the union cabinet earlier in the day.

Simply put, the amendments to the ESA will do two key things – promote barrier-free inter-state as well as intra-state trade in agriculture produce and allow farmers to directly engage with processors, aggregators, wholesalers, large retailers and exporters. The union government’s push for “One India, One Agriculture Market” has come at a time when the rural economy has been hit not just by the fallout of pandemic but is also facing a reverse migration by lakhs of migrants particularly in states like Uttar Pradesh, Bihar and Jharkhand triggering demand for more local employment.

“The union government is trying to open up the process for all farmers. After the push for One Nation, One Ration Card the proposed amendments to ECA also points out to the larger trend of creating a unified approach towards agriculture. While some of the proposals, including allowing inter and intra state trade, has been demanded for long, it is bound to face pushback from some of the state governments which have an alternative point of view,” said Yatindra Singh Sisodia, director at the Madhya Pradesh Institute of Social Science Research, Ujjain and a political analyst.

“It is politically significant because the union government is aware of the havoc that the pandemic has created and is looking for key interventions to tackle it,” he said adding that state elections in Bihar and West Bengal are also a key concern.

Over the next one year, two key states – Bihar and West Bengal – are set to go to polls and both of which are high stake elections for the Bharatiya Janata Party (BJP). In agriculture dominated state of Bihar, the NDA is looking to tide the anti-incumbency sentiment against the 15 year long tenure of chief minister Nitish Kumar while in West Bengal, BJP is looking to be the main contender against incumbent Trinamool Congress. The decision is also significant because BJP will also face assembly election in Uttar Pradesh in 2022 which also has considerable number of farmers. The party has made an election promises of doubling the income of farmers by 2022.

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