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Agri Reforms

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Agri Reforms – 2020

As a part of the Union Government’s Special Economic Package worth Rs 20 lakh crore under Atmanirbhar Bharat Abhiyan or Self-Reliant India Movement, Union Finance & Corporate Affairs Minister, Smt. Nirmala Sitharaman on May 15, 2020 announced a series of measures focussing on agriculture and allied activities.

Measures to Strengthen Infrastructure Logistics and Capacity Building for Agriculture, Fisheries and Food Processing Sectors
  • Rs. 1 lakh crore Agri Infrastructure Fund for farm-gate infrastructure for farmers
  • Rs. 10,000 crore Scheme for Formalisation of Micro Food Enterprises (MFE)
  • Rs. 20,000 crore for fisherman through Pradhan Mantri Matsya Sampada Yojana (PMMSY) for integrated, sustainable, inclusive development of marine and inland fisheries
  • Rs. 13,343 crore National Animal Disease Control Programme to achieve 100% vaccination of cattle, buffalo, sheep, goat and pigs
  • Rs. 15,000 crore Animal Husbandry Infrastructure Development Fund to support private investment in Dairy Processing, value addition and cattle feed infrastructure
  • Rs. 4,000 crore for Promotion of Herbal Cultivation to cover 10 lakh hectare under herbal cultivation in 2 years
  • Rs. 500 crore for Beekeeping initiatives to increase in income for 2 lakh beekeepers and to provide quality honey to consumers
  • Rs. 500 crore to extend “Operation Greens” from tomatoes, onion and potatoes to ALL fruit and vegetables providing 50% subsidy on transportation and storage

Further, the Union Finance Minister announced following measures for Governance and Administrative Reforms for Agriculture Sector:

  • Amendments to Essential Commodities Act to deregulate food stuffs including cereals, edible oils, oilseeds, pulses, onions and potato enabling better price realisation for farmers
  • Agriculture Marketing Reforms to provide marketing choices to farmers, barrier free Inter-State Trade and e-trading of agriculture produce
  • Facilitative Legal Framework for Agriculture Produce Pricing and Quality Assurance
How these Reforms will Benefit Farmers?

According to well-known agricultural economist, Dr. Ashok Gulati, Proposed reforms in agri-marketing laws address longstanding needs of farmers. They could build efficient supply chains, ensure better products for consumers. “The reforms, announced last week could be a harbinger of major change in agri-marketing, a 1991 moment of economic reforms for agriculture,” Dr. Gulati noted in his column on the latest agri reform measures.3

Ram Kaundinya, Director General, Federation of Seed Industry of India, said that the proposed amendments to the Essential Commodities Act will make it possible for large and small private players to purchase agricultural commodities on a large scale. This will increase competition and will make it possible for the farmer to realize better prices, according to Kaundinya.4

Following are some of the many benefits the proposed agriculture infrastructure development measures and marketing reforms offer to the farmers in the country:

  • The Proposed Agri Infrastructure Fund will reduce post-harvest losses and wastage helping small farmers to earn more though value-added agri-produce5
  • Farmers will not be bound to sell agriculture produce only to Licensees in APMCs which results in higher intermediate costs and hindered price realization for farmers
  • Farmers will get a higher share of the final retail price since middlemen will be out of the transactions
  • Farmers will have choices to build better market linkages for their produce and sell the produce at attractive prices
  • More competitive agri-produce market with lesser controls and higher accessibility will improve fortunes of small and marginal farmers
  • Barrier-free inter-state trade along with e-trading of agriculture produce will create one common market for agri-produce helping farmers with surplus produce to take their stock to the most lucrative market
  • Adequate cold storage facilities will protect farmers against distress sale of perishable crops
  • Amendments to the stringent Essential Commodities Act will facilitate better price realisation for farmers of food items including cereals, edible oils, oilseeds, pulses, onions and potato