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Reforms in agriculture sector will augment exports, boost agri-value chain , May 20, 2020

With the announcement made by Union Finance Minister Nirmala Sitharaman regarding reforms in the Agriculture Produce Marketing Committee (APMC) Act aimed at freeing of restrictions on sale of agri produce by farmers, experts say that the much-awaited reforms in the agriculture sector will help India to increase its agri exports share in global trade.

Agriculture is the only product where the producer (farmer) has to sell only through a fixed channel which is the APMC. This reform in APMC will be a significant boost to the farmers' income, feel experts.

Sharad Kumar Saraf, president, FIEO, commenting on the announcement said that it was most opportune time for the reforms as countries are looking towards India as a supply hub for food including processed food, marine, meat, fruits and vegetables, tea, rice and other cereals. This is particularly noteworthy as the country is mulling moving away from China- centric supplies.

“Removal of barrier for inter-state agri trade will help in exports in a big way as many states had put restrictions on sugar, rice, cotton etc. depriving us to realise their exports potential in the past,” he said.

“Further, amendment in Essential Commodities Act will not only enable better price realisation for farmers in respect of edible oils, oilseeds, pulses, onions, potatoes and cereals but will also help exporters to stock them for timely delivery as just in time is very crucial in inventory management,” he said.

In the marine product export also, India is all set to be the world leader, said FIEO president while adding that the current downfall is temporary. The creation of a separate Department of Fisheries in the budget this year and Rs 20,000 crore fund for fishermen will help in achieving the target 70 lakh tonne fish production much before than the prescribed five years.

Besides, he said, the strengthening of post-production facilities like cold chains, storage infra & farm-gate projects will not only address wastages but will improve unit realisation of agri products.

The finance minister has also announced Rs 15,000 crore dairy infrastructure fund. Amul MD RS Sodhi stated that this fund will help in creating extra capacity of 4-5 crore litre for the dairy sector thereby creating nearly 25 lakh employment opportunity in the rural regions.

Industry chambers also welcomed the move. “The Essential Commodities Act had outlived its utility and by bringing a change in this the government has ensured that investments in the agri-value chain will get a boost. Additionally, the announcement on introducing a Central law to free up inter- and intra-state trade of agri-products will help farmers in getting a better price for their produce and we hope that all states will adopt this in right earnest,” said Dr Sangeeta Reddy, president, FICCI.

She stated that the creation of a legal framework to provide farmers with certainty with regard to the offtake and pricing even before sowing is started is an indication that government is serious about promoting contract farming whose benefits were already seen in certain parts of the country. Also, connecting farmers with food processing companies, aggregators, bulk buyers and so on helps in improving certainty of sales as well as get other benefits like provision of better seeds and new technologies.

Meanwhile, traders opened shops across the country after 55 days of lockdown imposed due to Covid-19 pandemic. According to the traders’ body, CAIT, no business occurred on day one in commercial markets across the country including Delhi. Around 4.5 crore shops opened on Tuesday and at many parts of the country including Delhi, the government has imposed the Odd-Even system and only about 5 lakh shops having odd numbers could be opened in the National Capital Territory.