New ordinance to help prevent price collapse of farm produce: Mangaluru CII

Our Bureau Mangaluru | Updated on June 08, 2020

The Confederation of Indian Industry (CII), Mangaluru chapter, has said that the ‘Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020’ will provide huge opportunities to farmers and farmer producer organisations (FPOs).

K Prakash Rao, Chairman of the Mangaluru chapter of CII, said the ordinance is a major step forward in unshackling the regulations and providing huge opportunities for farmers and FPOs to get into contract farming with big retail marketers. This will help ensure that there is no sudden collapse of price mechanism and distress selling by farmers.

This ordinance will be critical to ensure substantial gain of farm income and may even result in introducing value addition to the farm produces by the farmers. These relief measures will provide a major fillip to farmers, he said.


On the ‘Farmers' Produce Trade and Commerce (Promotion and Facilitation) Ordinance 2020’, he said the Agricultural Produce Marketing (Regulation) Act, which was introduced almost five decades ago, had failed miserably to serve the interest of farmers, and was a major source of ‘harassment’ to the market functionaries operating in the notified agricultural produce.

“It failed to provide any service other than creating unplanned and unscientific market yards in the country with over half of them today defunct and dead assets. In the last five decades, though the markets have expanded many folds in terms of demand for these farm produces, APMCs failed miserably to facilitate this trade in favour of farmers. They were not proactive in adapting to the changing marketing scenario in the country,” he said.

Instead, APMCs only focussed on enforcing the redundant law on all types of transactions with the sole interest of only garnering huge revenue for their growing administrative expenses. APMCs failed to understand the difference between fee and tax, and settled for enforcing the law as though it was a tax.

The markets were crying for ages to abolish this irrelevant law and finally it took a crisis for this major decision to come about, Rao said.

The farmer now has the freedom even to move his goods inter-State and sell to anyone who has just a PAN (permanent account number). Further, the Centre is not levying any cess or fee for such transactions outside the local APMC yards and thereby ensuring that farmer gets a much better price and not take the burden of regulation expenses, he said.

Published on June 08, 2020

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