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Recent Reforms will boost agri biz investments-Nikhil Sawhney

Article by Nikhil Sawhney


Confederation of Indian Industry (CII) Northern Region

The recent amendments to the decades-old Essential Commodities Act, following

up on Finance Minister Nirmala Sitharaman’s ‘Atmanirbhar Bharat’ economic

stimulus measures, have ushered in major deregulation of the agricultural market

in India. The reforms that Government has undertaken in these testing times for

making “One Country, One Market” for agriculture would enableachievement of

the vision of doubling farmers’ income by 2022.

We at CII had for long been advocating with the Central and State Governments to

deregulate the agriculture sector and empower the farmer to sell his produce

wherever he gets the best remuneration for his harvest. These amendments, while

enhancing the income of farmers, are also likely have a domino effect in improving

the entire agriculturevalue chain right from Farm to the Fork wherein the industry

would also now feel encouraged to bring in more investments in cold storage,

warehouses, processing and export creating opportunities that are waiting to be


We all know that because of its diverse geographic and climatic conditions, India

has been one of biggest farm producers in the world for a wide array of cereals,

pulses, oilseeds, edible oils and staples such as onion and potatoes.However with

Government regulating the stock and supply of these under the Essential

Commodities Act, 1955, industry players were restricted from infusing

investments, adding the right inputs and introducing efficiency into the sector.

The amendments in the APMC have now also provided much needed

independence to farmers from vastly regulated agricultural markets in the country.

The farmers are now free to sell their produce outside their defined APMC

markets. These decisions would now also empower our farmers to engage with

processors, aggregators, large retailers, exporters etc without fear of exploitation.

Additionally, reform of the APMC system would help them connect with new

technologies, varieties and farm practices which will bring more income and

sources of revenue to our farm andrural sector.

The ordinance to promote contract farming is another landmark move which will

enable greater private sector participation in agriculture. Farmer producer groups

can now enter into agreements with large retailers, exporters, and aggregators for

purchase of crops on a large scale. With corporates supporting production with

better inputs and technology, the stage is set for enhancing yield and output of

crops including fruits and vegetables. As a significant agri producer, India can also

address global food markets more successfully through this linkage introduced in

the new policies.While the facilitative legal framework is a move in the right

direction it is hoped that this framework would be transparent and fair to both the

seller and the buyer.

The other measures such as to accept the recommendation of Dr M S Swaminathan

Committee, to enhance the MSP to 50% higher than input cost would greatly add

to the cheer of our farmer brethren.

While Government of India has surely undertaken agriculture reforms in the right

direction, the states now have the onus to move forward by facilitating inter and

intra state trade of agri commodities without any disruptions. I do hope that states

will also expedite and fast track the reforms pending at their end which will allow

the Industry and the farming fraternity to join forces and unlock the opportunities

to makeIndia’s agriculture sector globally competitive.

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