The provision will allow traders, exporters or big retailers to keep stocks of such items without attracting any penalty. The stockholding limit – a tool to check the price of these commodities – will be imposed only in case of “extraordinary circumstances” such as war, natural calamities or in a situation of substantial price rise in order to protect consumers’ interests.
The Bill, which was passed by the Lok Sabha last Tuesday, aims to remove fears of private investors of excessive regulatory interference in their business operations. After getting presidential assent, the new amended law will replace the existing Ordinance which was promulgated on June 5 like the other two farm Bills – one on Agri Market and the other on contract farming.
Replying to the discussion on the Bill before it was passed by the Upper House, minister of state for consumer affairs, food & public distribution, Danve Raosaheb Dadarao, said the amendment was required to prevent wastage of Agri-produce due to lack of storage facilities.
“The amendment will create a positive environment not only for farmers but also for consumers and investors and will definitely make our country self-reliant,” said the minister, adding that it will strengthen the overall supply chain mechanism of the agriculture sector.
It is expected that the freedom to produce, hold, move, distribute and supply will lead to harnessing economies of scale and attract private sector and foreign direct investment into the agriculture sector. It will help drive up investment in cold storages and modernization of the food supply chain.
“The government, while liberalizing the regulatory environment, has also ensured that interests of consumers are 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,” said a government statement on provisions of the Bill.
It said the installed capacity of a value chain participant and the export demand of an exporter will, however, remain exempted from such stock limit imposition so as to ensure that investments in agriculture are not discouraged.