"Is Essential Commodities (Amendment) Act, 2020" helpful to farmers?"The "EssentialCommodities Act" was in force since 1955. This act was amended in 2020 and deemed to have come into force from the 5 th. day of June 2020. With this amendment, the supply of foodstuffs including cereals, pulses, potatoes, onions, edible oilseeds, and oils is deregulated. Previously, there was a limit to which these commodities can be purchased and stocked by private agencies. With the amendment to this act all the items mentioned and anymore to be notified by the Government are deregulated. A private agency can purchase any amount of these foodstuffs and store them for any length of time before selling them.
These items may be regulated by the Government only under extraordinary circumstances like war, famine, natural calamities, and extraordinary price rise in the market. The stock limit may be imposed by the Government when the increase in the retail price of horticulture produce is 100% and 50% in the case of non-perishable agricultural foodstuffs. The Government will not come into the picture even if the retail prices increase by more than 90%.in the case of horticulture produce and more than 45% in the case of non-perishable agricultural foodstuffs.
What happens now is that the private agencies stockpile large quantities of all these items in cold storage. When there is a short supply, they can be sold in the retail market at higher rates as the Government will not take action until the price rise is 100%. An artificial shortage may be created by hoarding the foodstuffs and raise the rates for higher profits.
These foodstuffs will be purchased at the market rate from farmers and stored in cold storage. When there is a shortage, they will sell for a huge profit, which will go to the private agency but not the farmer. How far this will benefit the farmer? This amendment will affect the common man also. In this scenario, the big private agencies get all the profit. Give your unbiased opinions after studying the "Essential Commodities(Amendment ) Act, 2020