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India’s export of agricultural produce is likely to get a boost with the government’s decision to amend the Essential Commodities Act (ECA) to deregulate key commodities, say experts.
Finance Minister Nirmala Sitharaman’s announcement on Friday, that the government will amend the ECA, after which cereals, edible oil, oilseeds, pulses, onions and potato will be deregulated, when implemented, can help farmers and traders in selling their rising stocks, pointed out Biswajit Dhar, Professor, Jawaharlal Nehru University.
“The ECA amendment will help in drawing down the stocks of cereals and to find markets for vegetables and oilseeds, now that the domestic demand is low,” Dhar told BusinessLine .
The announcement (on ECA) is most opportune as countries are looking towards India for processed food, marine, meat, fruits and vegetables, tea, rice and other cereals as countries are apprehensive about importing edible products from China, said Ajay Sahai from exporters body FIEO.
“Amendment in ECA 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,” Sahai added.
Sitharaman said the government intended to impose stock limits only under very exceptional circumstances like national calamities, famine after the amendment of ECA.
The ECA amendment is the first step by the government in deregulating the agriculture sector which will save the farmers from artificial price management activities by different forces, pointed out Mohit Singla, Chairman, Trade Promotion Council of India. “The dream of a ₹100 crore agriculture export sector now seems to be a possible reality,” said Singla.
The Commerce and Industry Ministry, as part of its Agriculture Export Policy, had initiated consultation among relevant stakeholders and Ministries to ensure that barring a few critical products, other agricultural items would not be brought under any export restrictions.
“Sometimes, a crisis expedites reforms like these. The amendment in ECA was long overdue. It is encouraging that it is now being brought about,” an official involved in the framing of the policy said.
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