A spotlight of final week’s stimulus package deal was the authorized reforms proposed for agriculture. It has been likened to the 1991 reforms which reworked business and monetary markets. Agriculture stays shackled by antiquated legal guidelines. Furthermore, progress in creation of a nationwide marketplace for agricultural produce has been gradual. Subsequently, proposals to amend Important Commodities Act (ECA), create a central legislation to develop advertising and marketing choices by way of interstate commerce and digital buying and selling platforms, and introduce a facilitative authorized framework to boost farmer engagement with retailers and aggregators have drawn reward. They sign reformist intent.
Given the delay in reforming agriculture, reforms shouldn’t be incremental. As an example, ECA must be repealed outright. It was a laws framed within the backdrop of shortage and gave the state huge powers. It has merely no place in at the moment’s context. Equally the APMC Act created monopsony powers and erected entry obstacles for brand new brokers. A functioning market wants many consumers and sellers, making the Centre’s plans to create a authorized structure to facilitate it vital. However legal guidelines alone is not going to unlock agriculture’s full potential.
Authorities must play a extra proactive position, because it did within the 1991 monetary sector reforms, to create market infrastructure. For instance, 4 years in the past authorities launched e-NAM, an digital pan-India hyperlink of wholesale markets. The intention is to attach the prevailing mandi system to create a nationwide marketplace for farmers. However in 4 years barely 9% of about 6,946 markets are linked to e-NAM. Market infrastructure for high quality evaluation, dispute redressal mechanism and logistics infrastructure are insufficient. Authorities must take the lead right here. Markets evolve solely when authorized adjustments include a complementary ecosystem. Authorities now must spend money on the ecosystem. Solely then will the Indian farmer be unshackled.
This piece appeared as an editorial opinion within the print version of The Occasions of India.