Cabinet Approves Twin Ordinances to Let Farmers Sell Produce Directly to Traders, Retailers

The Union Cabinet on 3^rd June has approved ‘The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020’ to ensure barrier-free trade for Agri products. Before this ordinance, there were strict regulations on farmers who wished to sell their products outside of the notified APMC market. Farmers were also restricted to sell their produce to registered licensees of the State Government.

The ordinance aims to provide an environment of free choice for both the farmers and traders regarding the sale and purchase of Agri products. This will bar the state government from imposing taxes on crops being sold outside mandis, thus giving the farmer a free choice. The government for long has been trying to create an ecosystem outside of APMC market yards to boost prices for farmers due to additional competition.

Union Agriculture Minister Narendra Singh Tomar said: “This is a historic step in unlocking the vastly regulated agricultural markets in the country”. There will also be a separate mechanism to resolve disputes. The District Collectorate will be expected to deal with these matters within 30 days. The ordinance applies to only those produce which is sold outside the mandis with the state APMC law still applicable inside the mandis.

This ordinance aims at creating additional trading opportunities for farmers and it will be supplemented by the existing MSP procurement scheme to provide farmers with a stable income. This will help lay the foundation of “One India One Agriculture Market”.

The government also amended the Essential Commodities Act to deregulate several commodities like cereals, pulses, oilseeds, edible oils, onions, and potatoes thus allowing traders to increase stocking capacities of these products.

The government also approved “The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020” which will empower farmers to engage with processors, aggregators, wholesalers, large retailers, and exporters.