Monsoon session of Parliament: Lok Sabha clears bill to amend Essential Commodities Act

On the second day of the ongoing Monsoon Session of the Parliament, Lok Sabha on Tuesday passed the Essential Commodities (Amendment) Bill, 2020. The bill allows the central government to regulate the supply of some food items under extraordinary circumstances which may include famine, war, extraordinary price rise and natural calamity of grave nature.

The Essential Commodities (Amendment) Bill, 2020, which will replace an ordinance that provides Stock limits may be imposed on agricultural produce only if there is a steep price rise. The ordinance was part of three ordinances brought by the Centre government as part of 'reforms in agriculture marketing'.

The three ordinances include; Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance and Essential Commodities (Amendment) Ordinance.

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Minister of State for Consumer Affairs, Food and Public Distribution Raosaheb Danve while replying to the debate in the house said the government had announced an ordinance to amend the Essential Commodities Act 1955 which said that the supply of agricultural foodstuff as is notified by the Central Government shall be regulated only under extraordinary circumstances and any action for imposing stock limit shall be based on price rise, subject to the conditions and exclusions specified therein.

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'Agriculture will attract greater investment due to the amendment'

Adding further the BJP minister said that wheat and rice production in the country had seen a quantum jump since Independence. He said the amendments will ensure the removal of disruptions in the supply chain of food products and lead to greater investments.

"The Essential Commodities (Amendment) Act will ensure the supply chain will be established for vegetables and fruits. Agriculture will attract greater investment due to this amendment". "In the current perspective, to boost investment in agriculture this bill will play an important role. Due to corona crisis, there was a possibility of a rise in prices of food products due to disruption in transport and supply chain of food products but our government did not allow that to happen," he said.

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The statement of objects and reasons of the bill states that India has become surplus in most agricultural commodities but farmers have been unable to get better prices due to lack of investment in warehouses, cold storage, processing and export as entrepreneurs get discouraged by the regulatory mechanisms in the Essential Commodities Act, 1955.

The bill further noted that the country's economy had been adversely affected due to the COVID-19 pandemic leading to unemployment and slowdown. It also stated that agriculture sector has the potential of making a significant contribution to economic growth.

"As Parliament was not in session and there was an immediate need for legislation in this regard, the Essential Commodities (Amendment) Ordinance, 2020 was promulgated on June 5," the bill stated. 

In order to boost immediate investment in the agriculture sector, increase competition and enhance farmers' income, there was a need to create an environment based on ease of doing business and for removing the fear of frequent statutory controls under the Essential Commodities Act, the bill stated.

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(With inputs from ANI)