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*The essential commodities act.1955
*The essential commodities (Amendment) bill.2020
*Changes after amendment of act
*Impact of new bill on farmers and consumer
The Essential Commodities Act.1955
a. Cattle fodder including oil cakes and other concentrates.
b. coal including coke and other derivatives
c. components and accessories of automobiles.
d. Cotton and wooden textiles
e. Food stuffs including oil seeds and edible oil: food
crops includes Sugarcane also
f. Raw cotton, cotton seeds, raw jute.
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Need of Amendment:
* The central government claims that India has become surplus in most Agri-commodities, farmers have been unable to get better prices due to lack of investment in cold storage, warehouses, processing and export as the entrepreneurial spirit gets dampened due to Essential Commodities Act.
*According to the Economic Survey report the imposition of frequent and unpredictable blanket stock limits on commodities under EC act neither reduces the price nor the price volatility. Further such intervention does enable opportunities for unproductive income and harassment.
* Farmers suffer huge losses when there are bumper harvests, especially of perishable commodities due to lack of storage facilities.
Changes after the Amendment:
* The supply of such foodstuffs, including cereals, pulses,
potato, onions, edible oilseeds and oils, as the Central Government may, by
notification in the Official Gazette, specify, may be regulated only under
extraordinary circumstances which may include war, famine, extraordinary price
rise and natural calamity of grave nature.
*Any action on imposing stock limit shall be based on price
rise and an order for regulating stock limit of any agricultural produce may be
issued under this Act only if there is:
(i) Hundred per cent. Increase in the retail
price of horticultural produce; or
(ii) Fifty per cent. Increase in the retail price of
non-perishable agricultural foodstuffs.
* Order for regulating stock limit shall not apply to a
processor or value chain participant of any agricultural produce, if the stock
limit of such person does not exceed the overall ceiling of installed capacity
of processing, or the demand for export in case of an exporter.
The expression
"value chain participant", in relation to any agricultural product,
means and includes a set of participants, from production of any agricultural
produce in the field to final consumption, involving processing, packaging,
storage, transport and distribution, where at each stage value is added to the
product.
Benefits from new bill:
*The EC (Amendment) Bill 2020 aims to remove fears of
private investors of excessive regulatory interference in their business
operations.
*The freedom to produce, hold, move, distribute and supply
will lead to harnessing of economies of scale and attract private
sector/foreign direct investment into agriculture sector.
* It will help drive up investment in cold storages and
modernization of food supply chain.
* This amendment will create a positive environment not only
for farmers but also for consumers and investors and will definitely make our
country self-reliant.
* The amendment will strengthen the overall supply chain
mechanism of the agriculture sector and also help to achieve the government’s
promise to double the farmer’s income by promoting investment in this sector
and promote ease of doing business.
Difficulties/ Negative impacts:
* Removing many commodities from the essential commodities
list may lead to increase in rural poverty and may have an adverse impact on
the public distribution system (PDS).
*Excluding the foodstuffs like pulses, onions and edible
oils the daily essential commodities from list means the government not
regulating the supply of these commodities means chance of hoarding high by the
traders by creating artificial shortage of supply which will have direct effect
on the consumers.
*Due to bulk procurement by the large traders or hoarder the
price of these commodities will jump at farm level .AS this act allow big
businessmen to hoard essential commodities leading to rise in prices.
*Some expert say that the new amendments to EC acts were
highly centralizing in nature .It erodes the constitutional rights of state.
*The Minister said that the EC act was brought in the
country when we were not self-sufficient in food grain production but now the
situation so we bring the amendment .We agree that there was increase in food
production over the years but at ground reality the rural poverty, the purchasing
capacity of the poor people have not changed yet .They will suffer from price
rises.
The Government,
while liberalizing the regulatory environment, has also ensured that interests
of consumers are safeguarded. Instead of sudden removal of many commodities
from essential commodities the government should have done it in phased manner
after the seeing the impact of removal of certain commodities.
(Content source : pib.gov.in and theweek.in)
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