Why in News ?

The Essential Commodities (Amendment) Bill, 2020, which removes cereal, pulses, oilseed, edible oil, onion and potatoes from the list of essential commodities. Details on Essential Commodities Acts explained. 

Read in-line with : The Essential Commodities (Amendment) Bill, 2020

Details on Essential Commodities Act

• 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.
  • In fact, India has now become an exporter of several agricultural products.
• 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.

Issues with the bill

• The price triggers envisioned in the Bill are unrealistic and so high that they will hardly ever be invoked.
• It infringes upon the State’s power.
  • State government may wish to regulate and place stock limits.
  • Amendments must apply only if the State government, by notification, applies the Amendment Act in that State.
• Hoarders and Black marketeers
  • Diverse country the situation may differ from district to district within a State such a centralised law would make it very difficult for the States to check black-marketing of goods

Source : Indian Express

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 for : 23 September 2020