Govt proposes GST panel-like body to push agri reforms in states

• A committee formed by the Ministry of Agriculture and Farmers’ Welfare has proposed the constitution of a panel of state agriculture ministers, on the lines of the Empowered Committee of State Finance Ministers on Goods and Services Tax, to push agriculture marketing reforms.

Highlights:

• A committee under the Ministry of Agriculture and Farmers’ Welfare has drafted the National Policy Framework on Agricultural Marketing to address long-standing issues in agricultural marketing and promote structural reforms.

Key Recommendations

• Constitution of an Empowered Committee:
  • A panel of state agricultural marketing ministers is proposed, modeled on the GST Council.
  • The committee will drive consensus among states to adopt and implement agricultural marketing reforms.
  • Chaired by a state agriculture minister on a rotational basis, it would aim to establish a unified national agricultural market.
• Unified National Market:
  • Reform of state-level Agricultural Produce Marketing Committee (APMC) Acts to eliminate fragmented markets within states.
  • Simplification through a single licensing/registration system and single market fee across states.
• Quarterly Meetings and Secretariat:
  • A permanent secretariat is proposed to support the committee, with meetings at least quarterly to ensure progress.
• Price Insurance Mechanism:
  • Inspired by the Pradhan Mantri Fasal Bima Yojana (PMFBY), a price insurance scheme is recommended to protect farmers against price crashes, stabilizing their incomes and promoting modern practices.
• Reform Areas Highlighted:
  • Private wholesale markets and direct purchase by bulk buyers.
  • Deeming warehouses, cold storage, and silos as market yards.
  • Uniform market fees and a single trading license across the state.

Challenges Identified

• State Resistance:
  • Many states remain hesitant to implement reforms suggested by the Centre, such as the Model APMC Act of 2003 and subsequent proposals.
• Fragmented Markets:
  • State-specific regulations create barriers to seamless trade, even within state boundaries.
• Lessons from Repealed Farm Laws:
  • The divergence of views between the Centre, states, and farmers was evident during the backlash to the farm laws introduced in 2020, which were repealed after widespread protests.

Significance of the Recommendations

• Enhanced Market Access:
  • A unified market would reduce inefficiencies and provide farmers with better access to markets, ensuring fairer prices for their produce.
• Farmer-Centric Approach:
  • The price insurance scheme would complement PMFBY, safeguarding farmers’ incomes from market volatility.
• Ease of Doing Agri-Trade:
  • Simplified regulatory frameworks and a unified national market can attract private investment and improve post-harvest infrastructure.
• Consensus Building:
  • An empowered committee offers a mechanism to reconcile differences between the Centre and states, enabling smoother implementation of reforms.

Prelims Takeaways

• Goods and Services Tax
• Empowered Agricultural Marketing Reform Committee
• PM- Fasal Bima Yojana (PMFBY)