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New farm laws herald new era of market freedom: Economic Survey

New farm laws herald new era of market freedom: Economic Survey
Image Source : ANI

New farm laws herald new era of market freedom: Economic Survey

Amid raging protests over new farm laws, the federal government’s pre-Budget state of financial system doc on Friday went the additional mile to record advantages of the three contentious laws, saying that apart from giving market freedom, they are going to assist elevate incomes of small and marginal farmers. The Economic Survey 2020-21, tabled in Parliament by Finance Minister Nirmala Sitharaman, had in two sections talked about concerning the three payments, detailing their salient options in addition to the advantages that they are going to convey.

Defending the three new farm laws strongly, the Survey mentioned they herald a new era of market freedom which may go a good distance in enhancing lives of small and marginal farmers in India.

These legislations had been designed “primarily” for the profit of “small and marginal farmers”, which represent round 85 per cent of the entire quantity of farmers and are the largest sufferer of the “regressive” APMC-regulated market regime, it added.

Thousands of farmers, primarily from Punjab, Haryana and Western Uttar Pradesh, are protesting at varied borders of the nationwide capital in search of repeal of these legislations. They have expressed issues that the laws are pro-corporate and will weaken government-regulated mandis, additionally referred to as Agriculture Produce Marketing Committees (APMCs).

Eleven rounds of talks between the federal government and round 40 unions have failed to interrupt the impasse.

“The reforms in the agricultural sector were more overdue than even the labour reforms as the existing laws kept the Indian farmer enslaved to the local mandi and their rent-seeking intermediaries. While every other category of producer in India had the freedom to decide where to sell his/ her produce, the Indian farmer did not,” the doc noticed.

The native monopolists created by this authorized infrastructure enabled the intermediaries to prosper on the value of the farmer, particularly the poor ones.

The survey highlighted that “agricultural reforms enable the farmer to sell where he gets the best deal and thereby enable competition that is sine qua non to create welfare for the small farmer”.

Listing the advantages, the doc mentioned that reforms in agriculture markets will allow creation of ‘One India one market’ for agri-products, create innumerable alternatives for farmers to maneuver up the worth chain in meals processing — from farm to fork, create jobs and enhance incomes.

Several Economic Surveys have expressed concern on the functioning of the APMCs and the truth that they sponsor monopolies. Specifically, Economic

Surveys for the years 2011-12, 2012-13, 2013-14, 2014-15, 2016-17, 2019-20 centered on the reforms required on this context.

Many committees have beneficial agri-market reforms since 2001, together with by the National Commission on Farmers chaired by M S Swaminathan and Taskforce on Employment Opportunities headed by Montek Singh Ahluwalia, as per the survey.

In September 2020, Parliament handed three farm laws — The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 and The Essential Commodities(Amendment) Act, 2020.

“The newly introduced farm laws herald a new era of market freedom which can go a long way in the improvement of farmer welfare in India,” the survey mentioned.      

According to the survey, the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020 will empower farmers of their engagement with processors, wholesalers, aggregators, giant retailers, exporters and can present a degree taking part in discipline.

It will switch the danger of market unpredictability from the farmer to the sponsor and in addition allow the farmer to entry fashionable know-how and higher inputs. Farmers have been supplied enough safety as sale, lease or mortgage of farmers’ land is completely prohibited and farmers’ land can be protected in opposition to any restoration.

The farmers could have full energy within the contract to repair a sale value of their selection for the produce. They will obtain cost inside a most of three days.

As half of this legislation, 10,000 Farmer Producer Organizations are being fashioned all through the nation. These FPOs will convey collectively small farmers and work to make sure remunerative pricing for farm produce.

After signing the contract, farmers is not going to have to hunt out merchants because the buying client might want to take the produce instantly from the farm.

The Essential Commodities (Amendment) Act 2020 removes commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the record of important commodities. This goals to take away fears in non-public buyers from extreme regulatory interference of their enterprise operations.

The freedom to supply, maintain, transfer, distribute and provide will result in harnessing of economies of scale and can entice non-public sector/ international direct funding into the agriculture sector. The laws will assist drive up funding in chilly storages and modernisation of the meals provide chain, the survey mentioned.

Pointing out farmers’ plight, the report mentioned that farmers have suffered from varied restrictions in advertising their produce.

They weren’t allowed to promote exterior the notified APMC market yards. The farmers had been restricted to promote their produce solely to registered licensees of the state governments.

Further, limitations existed in free circulate of agriculture produce between varied states owing to the prevalence of varied APMC legislations enacted by the state governments.

The APMC laws have certainly resulted in a quantity of “inefficiencies and consequent loss to the farmers”.

“The presence of multiple intermediaries between the farmers and the final consumers has led to low realisation by farmers. Further, a large range of taxes and cesses levied by APMCs cuts into farmers’ price realisation while only a small proportion is ploughed back into the development of mandi infrastructure. Poor infrastructure at the mandis compounds the problem of price realisation for the farmers,” it mentioned.

Long queues of farmers ready, most frequently, within the scorching solar to promote their produce with restricted means to take their produce elsewhere even when the worth is greater in one other mandi is a attribute characteristic of APMC mandis, the survey mentioned.

The delays lead to giant post-harvest losses to the tune of 4-6 per cent in cereals and pulses, 7-12 per cent in greens and 6-18 per cent in fruits.

Total post-harvest losses had been estimated at Rs 44,000 crore at 2009 wholesale costs.

“Recognising the above limitations of existing market regulations, various committees had recommended several reforms in the marketing of agricultural commodities,” the survey mentioned. 

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