STATE TIMES NEWS New Delhi: The Union Cabinet on Wednesday approved amendment to the six-a-and-half decade old Essential Commodities Act to deregulate food items, including cereals, pulses and onion, a move that will transform the farm sector and help raise farmers’ income. The Cabinet also approved ‘The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020’ to ensure barrier free trade in agriculture produce. The government also approved ‘The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020’ to empower farmers to engage with processors, aggregators, wholesalers, large retailers and exporters. Announcing the Cabinet decisions, Agriculture Minister Narendra Singh Tomar said, “This will go a long way in helping India’s farmers while also transforming the agriculture sector.” The proposed amendment to the Essential Commodities Act will allay fears of private investors of excessive regulatory interference, he said. Tomar said that ‘The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020’ will promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations. Tomar said that the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020′ will empower farmers for engaging with processors, aggregators, large retailers, exporters etc., on a level playing field without any fear of exploitation. These proposals were part of the Rs 20 lakh crore economic package announced to help those affected due to the lockdown clamped to fight the spread of COVID-19 disease. With the amendment to the Essential Commodities (EC) Act, commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes will be removed from the list of essential commodities, the government said. The freedom to produce, hold, move, distribute and supply will lead to harnessing economies of scale and attract private sector/foreign direct investment into the agriculture sector. It will help drive up investment in cold storages and modernization of the food supply chain, it said. The government further said that while liberalizing the regulatory environment has also ensured that the interest of consumers is safeguarded. It has been provided in the Amendment, that in situations such as war, famine, extraordinary price rise and natural calamity, such agricultural foodstuff can be regulated. However, the installed capacity of a value chain participant and the export demand of an exporter will remain exempted from such stock limit imposition so as to ensure that investments in agriculture are not discouraged, it said. “The amendment announced will help both farmers and consumers while bringing in price stability. It will also prevent wastage of agri-produce that happens due to lack of storage facilities,” it added. The amendment to the EC Act is necessary, the government said it is because despite India has become surplus in most agri-commodities, farmers have been unable to get better prices due to lack of investment in cold storage, processing and export as the entrepreneurial spirit get dampened due to hanging sword of the EC Act. Farmers suffer huge losses when there are bumper harvests of perishable commodities. With adequate processing facilities, much of this wastage can be reduced, it added. The Cabinet also cleared an ordinance to amend the Insolvency and Bankruptcy Code (IBC) whereby fresh insolvency proceedings will not be initiated for defaults due to the COVID-19 pandemic, PTI reported quoting sources. Payment defaults from March 25 — the day when the nationwide lockdown to curb coronavirus infections began — would not be considered for initiating insolvency proceedings for a certain period of time, they said. The sources said the ordinance to amend the IBC has been approved by the Cabinet. Three sections of the Code — which provides for a market-linked and time-bound resolution process of stressed assets — would be suspended. The time period would be for six months and not exceeding one year, they added. The sources said an enabling provision has been approved by the Cabinet wherein the corporate affairs ministry can decide about the time period for which the three sections should be suspended. Defaults due to COVID-19 would not be considered for initiating insolvency proceedings. As a result, companies defaulting on repayment obligations due to disruptions on account of the pandemic would not be pushed into insolvency, they said. According to them, defaults that are not related to the pandemic and applications filed for insolvency before March 25 would be dealt with under the Code.
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