Farmers can soon sell their produce to any buyer

New Delhi | Pune: Farmers will soon enjoy the freedom to sell their produce to any buyer and strike deals with corporate clients for their harvest, while traders too will get to operate more efficiently and fearlessly with the government announcing a slew of reforms.

The government will overhaul the Essential Commodities Act, 1955, which the Economic Survey had blamed for the sudden spike in onion prices, and deregularise cereals, edible oils, oilseeds, pulses, onions and potato, finance minister Nirmala Sitharaman said on Friday.

Stock limit will be imposed only in exceptional circumstances, she said. Also, stock limits will not be imposed on processors, value chain participants and exports. “This will enable better price realisation for farmers by attracting investments and making agriculture sector competitive,” the finance minister said.


This is a big relief for traders.

“We welcome removal of pulses from the EC Act,” said Suresh Aggarwal, president of All India Pulses Producers Association. “This will help us do business without any fear of the government babus.”

Atul Chaturvedi, president of Solvent Extractors Association, said it is important to keep stocks of commodities. “There was no sense in having the EC Act,” he said.

The Economic Survey 2019-20 had called for “jettisoning” the antiquated Essential Commodities Act, saying it was a major cause of harassment as the conviction rate under the statute was negligible.

The government will also promulgate a central law to allow farmers to freely trade their produce anywhere in the country.

Farmers will also have the option to sell their produce directly to farmer producer organisations (FPOs), big retailers, and cooperatives without bringing produce to mandis.

“This will act as a marketing channel parallel to APMCs giving bargaining power to farmers,” a senior agriculture ministry official said on condition of anonymity.

Simon George, president of Cargill India, said the proposed reforms, along with promised investments, need proper implementation. If that is done, then it would help farmers as well as the agro-processing industry, he said.

The initiative will promote trading in the nationwide electronic market for farm produce.