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Extraordinary circumstances of ECA not applicable to processors, other value chain players: Agri Secretary

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Processors of agricultural produce and value chain providers are kept out of the purview of stock holding limit when extraordinary circumstances condition in the amended Essential Commodities Act is invoked due to price hike, Agriculture Secretary Sanjay Agarwal has said.

The Agricultural Secretary, who addressed a webinar organised by ag-tech start-up Agribazar on recent agricultural reforms on Thursday evening, was responding to questions raised by other participants.

On June 5, the government amended the Essential Commodities Act (ECA) of 1955 to keep major agricultural commodities such as cereals, pulses and oilseeds out of its purview and also brought in two ordinances that would allow trade in agricultural produce outside the conventional agricultural marketplace and offer fair price and protection to farmers who engage in contract farming with processors and other buyers of agricultural commodities.

“These extraordinary circumstances are not applicable to processors or value chain providers of any produce, whatever be the circumstances, for their annual capacity and even to the export commitments,” Agarwal said.

Stock limit and regulation

Under the amended EC Act, agri-food produce can only be regulated under extraordinary circumstances such as war, famine, extraordinary price rise, and natural calamity. In the case of price hike, the trigger for involving the stock limit for perishable commodities is 100 per cent increase in the retail price of the commodity over the immediately preceding 12 months or the average retail price of the last five year, whichever is lower. And for non-perishable produce, the trigger is the price of 50 per cent.

Regarding level playing field for private e-marketplaces, the Agriculture Secretary said they will be treated at par with the State-sponsored eNAM (National Agriculture Market). “eNAM is a platform that works in mandis. The trade ordinances that the government came out with do not touch mandis. No special place is kept for eNAM in the ordinance. Both the government and private platforms will have equal footing,” he said.

According to Agarwal, the best part of the ordinance is all electronic platforms for agri produce can operate themselves. There is no registration or regulation required, except for the fact that they have to declare their fair trade modalities, payment modalities and logistic modalities. And they have to follow these modalities. The government has kept a provision for framing norms for this ecosystem at a later point, if required to use, he added.

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