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NITI Aayog paper calls for 'judicious' use of Essential Commodities Act

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Months after Central, state governments cracked down on pulses hoarders for violating the Essential Commodities Act, a paper floated by the NITI Aayog has called for ‘judicious’ use of the Act to make private investments in agriculture marketing and storage attractive.
The paper, based on the discussions a NITI Aayog task force had with a wide range of experts and stakeholders, also favoured selective use of genetic modification technology in pulses and oilseeds after necessary safeguards. It also favoured freeing urea imports.
The task force is headed by NITI Aayog vice-chairman Arvind Panagariya with Bibek Debroy, Ramesh Chand, Ashok Gulati and host of secretaries from the ministries of agriculture, land resources, water resources, and fertilisers as members.
In October, the Centre amended the Essential Commodities Act to enable imposition of stock limits on pulses sourced from imports, stocks held by exporters, and those used as raw-materials by licensed food processors and large departmental retailers.
The amendment was done to help states governments intensify their anti-hoarding operations against pulses traders after retail prices touched as high as Rs 200 a kg. Around 130,000 tonnes of illegally stored pulses were seized from traders.
However, the move was criticised in some quarters on the grounds it would discourage investment in storage if buyers are not allowed to store a certain quantity.
The paper titled Raising Agriculture Productivity and Making Farming Remunerative for Farmers, which would be put on public domain for comments, has also called for replacing the existing minimum support price (MSP) system in some crops with ‘price deficiency payment’, which would compensate growers directly as and when they fall below a certain threshold limit.
OTHER RECOMMENDATIONS OF THE TASK FORCE
  • Seed replacement ratio should be accelerated and raised to 33 per cent for high yielding varieties and 100 per cent for hybrids
  • Fertliser subsidy should be paid directly to farmers
  • Urgent need to revitalize the National Agricultural Research System
  • Food processing should be turned into a major export industry
  • APMC Acts should be modified to support a well-functioning system of contract farming
  • Special attention should be given to Eastern and NE states as farmers there face depressed prices
“This approach would help prevent unwanted stocks and spread price incentives to producers in all the regions and all crops,” the paper said. It said MSP might still be used for need-based procurements.
The paper advocated the need for creating a vibrant land lease market and said that NITI Aayog should prepare ‘model land leasing Acts’ that can be used by various states to reform their existing provisions. It also called for starting a land bank to be held by a private agency.
In case of natural disaster, the government should immediately transfer a minimum specified sum into the bank accounts of farmers to provide instant relief without waiting for insurance claims, the paper said. On crop insurance products, the paper said the government should provide a diverse set of insurance products.
Business Standard, New Delhi, 16th Dec. 2015

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