Agriculture reforms will transform rural economy: Ramesh Chand


NITI Aayog member and agriculture expert Ramesh Chand has hailed the three recently enacted agriculture-related legislations by the Centre saying if implemented in the right spirit, they will take Indian agriculture to new heights and usher in the transformation of the rural economy.

“The three policy reforms undertaken by the central government through the three new Acts are in keeping with the changing times and requirements of farmers and farming,” Chand said in his recent working paper.

“The reforms have generated optimism for India to become a global power in agriculture and a powerhouse for global food supply,” he added.


Commenting on the Farmers’ Produce Trade and Commerce Act, Chand said it gives farmers the choice to sell their produce within Agricultural Produce Market Committee (APMC) markets or outside them; to private channels, integrators, farmer producer organisations (FPOs), or cooperatives; through a physical market or on an electronic platform; and directly at farm or anywhere else.

“It has no intent or provision to tamper or dilute MSP and poses no threat by itself to APMC markets,” he clarified.

According to Chand, the real threat to APMC mandis and their business is from excessive and unjustified charges levied by states in these markets. “The new FPTC Act will only put pressure on APMC markets to become competitive,” he said, adding this will ensure healthy competition between APMC mandis and other channels permitted under the new Act with significant gain to farmers.

Talking about the impact of The Farmers’ Empowerment and Protection Agreement on Price Assurance and Farm Services Act, Chand said the Act is inclined towards farmers. “The Act will promote diversification, quality production for premium price, export and direct sale of produce with desired attributes to interested consumers,” he said. “It will also bring new capital and knowledge into agriculture and pave the way for farmers’ participation in the value chain,” Chand added.

Commenting on the modification in the Essential Commodities Act (ECA) for a group of agri-food commodities, Chand clarified that the modification specifies transparent criteria in terms of price trigger for imposing ECA rather than leaving it to arbitrary decisions by bureaucrats to invoke the Act. “The modification in ECA will attract much-needed private investments in agriculture from input to post-harvest activities,” he said.

Talking about the fiscal benefits to farmers, Chand said by removing all kinds of charges and levies on sale and purchase of farm produce, the new Central Act saves significant cost to buyers and thus improves the prospects of payment of MSP by private traders to farmers.

“In contrast to this, any move by the states to counter the Central Act and giving a legal status to MSP while keeping market fee, user charges, commissions, cess, etc., intact will work against private traders giving MSP to farmers, by making purchase price costlier,” he cautioned.

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