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President Promulgates Agri Ordinances to Enhance Market Freedom and Investment

By NDP newsroom

On Friday, President Ram Nath Kovind promulgated three key Ordinances aimed at reforming India’s agricultural sector. These reforms provide legal backing for farmers to sell their produce across the country without restrictions and facilitate contract farming, allowing engagement with processors, wholesalers, and exporters at pre-agreed prices. The goal is to create a unified agriculture market and attract private investments to boost the sector.

The three reforms now in place include:

  1. Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020

    • This ordinance aims to establish "One India, One Agriculture Market."
    • Farmers are allowed to sell their produce outside regulated markets (mandis), enabling greater market access and competition.
    • It removes restrictions on inter-state and intra-state trade, opening more choices for farmers and reducing marketing costs.
    • This will allow farmers to sell directly to anyone with a PAN card, even from their farm gates.

  2. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020

    • This allows farmers to enter into contracts with processors, retailers, and exporters, ensuring pre-agreed prices and reducing market risk.
    • The ordinance aims to attract private sector investment and modernize farming through improved technology and inputs.
    • It also provides protections for farmers’ land ownership rights and includes a dispute resolution mechanism.

  3. Amendment to the Essential Commodities Act

    • This amendment removes cereals, pulses, oilseeds, edible oils, onions, and potatoes from the list of essential commodities.
    • It encourages private sector investment by reducing fears of excessive regulation and stockholding limits.
    • The changes aim to improve supply chain infrastructure, such as cold storage, and attract foreign direct investment.

These reforms are expected to open new markets for farmers, improve their incomes, and increase efficiency in the agricultural sector, benefiting both domestic and global markets. The government is seeking cooperation from state governments for successful implementation.

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