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Lok Sabha passed the Essential Commodities (Amendment) Bill, 2020 which seeks to deregulate food items, including cereals, pulses and onion, a move aimed at transforming the farm sector and raising farmers’ income.

What The Essential Commodities (Amendment) Bill, 2020 says ?

  • This Bill replaces the Essential Commodities (Amendment) Ordinance, 2020 and amends the Essential Commodities Act, 1955.
  • Allows the central government to regulate the supply of certain food items only under extraordinary circumstances.
  • Stock limits may be imposed on agricultural produce only if there is a steep price rise.
  • Removes cereal, pulses, oilseed, edible oil, onion and potatoes from the list of essential commodities.
  • Food items Regulation :
    • The central government may regulate or prohibit the production, supply, distribution, trade, and commerce of such essential commodities.
    • Food items including cereals, pulses, potatoes, onions, edible oilseeds, and oils, only under extraordinary circumstances.
    • The extra ordinary situation mentioned as 
      • War
      • Famine
      • Extraordinary price rise
      • Natural calamity of grave nature.
  • Stock limit :
    • Imposition of any stock limit on agricultural produce must be based on price rise.
    • The limit is imposed only if
      • 100% increase in retail price of horticultural produce.
      • 100% increase in the retail price of non-perishable agricultural food items.
    • Price fixing : Calculated over the price prevailing immediately preceding twelve months or the average retail price of the last five years, whichever is lower.

Need for the Bill

  • Bill aims to remove fears among private investors of excessive regulatory interference in their business operations. 
  • The freedom to produce, hold, move, distribute and supply will attract private sector/foreign direct investment into the agriculture sector
  • It will help drive up investment in cold storage and modernisation of the food supply chain.
    • The amendment helps to prevent wastage of agricultural produce due to lack of storage facilities
  • While liberalising the regulatory environment, has also ensured that interests of consumers are safeguarded.
    • In situations such as war, famine, extraordinary price rise and natural calamity, such agricultural foodstuff can be regulated.

Source : Economic Times

Topic

GS II : Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

GS III : Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System- objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing

Current Affairs Compilation : 16 September 2020

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