The bill, passed on Tuesday, was approved by the lower house last week and replaces an ordinance promulgated in June.
Its approval in Parliament was relatively easier than the two farm bills that remove all restrictions on where farmers can sell their produce and enter into agreements with large buyers such as retailers and exporters to share risks and get good returns. The Essential Commodities (Amendment) Bill is aimed at removing fears of private investors of excessive regulatory interference in business operations. “The freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector and foreign direct investment into agriculture,” said Danve Raosaheb Dadarao, minister of state for consumer affairs, food and public distribution, while replying to the debate in the House. He said the amendment was in favour of both farmers and consumers while bringing in price stability.
Processors and value chain participants are exempted from the stock limit. “The changes in the six and a half decade old archaic law is an important step by the government to achieve its target of doubling farmers’ income and also for ease of doing business,” he said.
The minister said the bill had a provision of imposing a stock limit on commodities under exceptional circumstances such as national calamities like famine with a surge in prices.