Page 628 - ES 2020-21_Volume-1-2 [28-01-21]

Agriculture & Food Management 255

produce. After signing the contract, farmer will not have to seek out traders as the purchasing
consumer will need to take the produce directly from the farm.

7.69 The Essential Commodities (Amendment) Act 2020 removes commodities like cereals,
pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. This aims
to remove fears in private investors from 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 will attract private sector/foreign direct investment into the agriculture
sector. The legislation will help drive up investment in cold storages and modernization of food
supply chain.

7.70 The three agricultural reform legislations are designed and intended primarily for the
benefit of small and marginal farmers which constitute around 85 per cent of the total number
of farmers and are the biggest sufferer of the regressive APMC regulated market regime. 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.

Box 3: Some illustrations of Reports recommending Agricultural Market
Reforms and the Amendments to the Essential Commodities Act

1. Expert Committee on Strengthening and Development of Agricultural Marketing – Chairman:
Shri Shankerlal Guru (June 2001)

The Committee underlined the need for a thorough overhaul of existing policies, regulations and
legal provisions which inhibit a free marketing system. It stated that direct marketing is one of the
alternative marketing structure that needs to be promoted and that the role of the private sector
may be encouraged outside the purview of the APMCs. Need for development of infrastructure
for quality assurance, standardization of grading and quality control was highlighted. It
recommended that the Essential Commodities Act be repealed to allow a free play of market
forces.
2. Report on the Taskforce on Employment Opportunities – Chairman: Shri Montek Singh
Ahluwalia (July 2001)
The task force recommended that benefit of decontrol must be extended to agriculture and that
the Essential Commodities Act should be repealed. It was stated that restrictions on marketing
of agricultural produce through APMC should be removed as they act as an impediment to
development of a national market.
3. Inter-Ministerial Task Force on Marketing Reforms- Chairman: Shri R.C.A Jain (July 2001)

The task force recommended that the APMC Acts should be amended by the state governments
to enable the private sector to develop alternate marketing infrastructure and support services.
It recommended that the Essential Commodities Act may be amended to remove restrictions on
storage of agricultural produce so that substantial warehousing capacity can be created in the
private sector.
4. Model Act on Agricultural Marketing - (September 2003)

Under the Model Act, legal persons, growers and local authorities were permitted to apply for the
establishment of new markets for agricultural produce in any area, as against the existing provisions