Agricultural sector reforms; are they really bad ?

Agriculture is one of the biggest sources of livelihood but also a major contributor to the Gross Domestic Product (GDP) of India.

Some days back the government with an intention to alter the agricultural sector introduced the Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 (Trade and Commerce Act) , Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 (Contract Farming Act) and has made necessary amendments to the Essential Commodities (Amendment) Act, 2020 (ECA).

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But the government’s decision on this has got strong opposition not only from the opposition parties but also from its own allies such as the Shiromani Akali Dal who walked out of the alliance.

The policy has created a system in which the farmers and traders can sell their purchase outside the market places meant for food and agricultural commodities called ‘mandis’. This is in line with the Competition Commission of India’s Annual Report of 2009-10 which said that there is a need to avoid the competitive bottlenecks prevalent in the APMC laws and the pricing policy of agriculture for the greater good of farmers.

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This encourages intra-state but also inter-state trade activities of farmers, thus reducing the cost of transportation. It also provides for electronic trading by farmers for the sale and purchase of the farmers produce online (FPO) wherein the farmers can trade directly means selling their produce online without any intermediaries.


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