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.