New law to define agricultural products, trade areas

Aiming to double farmers’ income by 2022, the Modi government has enacted a new law to provide an alternative channel for the sale of farm produce, apart from the agri markets operated under Agricultural Produce Marketing Committee (APMC) Acts of the respective states.

Under the new law, food grains like wheat, rice, coarse grains, pulses, oilseeds, edible oils, vegetables, fruits, nuts, spices, sugar cane, poultry, pigs, goats, fish, and dairy products consumed by humans in natural or processed form have been described as ‘agricultural products’.

Meanwhile, the area or place like farm gate, factory premises, warehouse, cellar, silo, cold storage, that is, any other structure or place from where the agricultural produce can be traded in the country has been categorised as the ‘Trade Area’.

But this does not include the ‘mandis’ or market yard premises run by market committees constituted under the APMC Acts. Apart from this, private market yards, private market sub-yards, direct marketing collection centres and private farmers’ consumer market yards or premises arranged by the licensees shall not be included.

In the new law, ‘trader’ means a person who purchases products for wholesale, retail, end use, value addition, processing or manufacturing within a state or inter-state, alone or with other partners.

The Promotion and Simplification of Trade and Commerce of Farmer Produce, Bill 2020 has been approved by Parliament. After the approval of the President, it will become a law and replace the Promotion and Simplification of Trade and Commerce of Farmer Produce, Ordinance 2020, brought on June 5.

Under the new law, a farmer or trader or an electronic trading and transacting platform shall have the freedom to trade inter-state or within the state in agricultural produce in a business or trade area.

However, no merchant other than farmer producer organizations and agricultural cooperative societies will be able to trade without any document, including PAN cards or any other documents notified by the central government.

If necessary, in public interest, the central government can determine the electronic registration system, the mode of business transactions, and the method of payment of scheduled agricultural produce for a trader in a business area.

The law provides for payment of prices within three days of the day of purchase of farmers’ produce. In case of payment within three days, the receipt will be given to the farmer on the same day, with the payment outstanding on the receipt.

However, the central government may make a separate process of payment by the Farmers’ producer organisations or agricultural cooperative society.

A person holding a PAN card or any other document notified by the Centre, a farming manufacturer’s organisation or agricultural cooperative society, will be able to trade by establishing or operating e-trade or transaction platform to make the trade easy within the state or inter-state.

The most important thing is that there will be no charge on the trade of scheduled agricultural produce in the business area covered under this law.