"I have been asking for this for 20 years," says Ashok Gulati, agriculture scientist ⁠— cheering the changes to Essential Commodities Act and APMC

• Finance Minister Nirmala Sitharam announced agricultural policy changes today, May 15.
• The prices of essential commodities will now be deregulated under the Essential Commoties Act and Agriculture Produce Market Committee will be open to competition.
• Ashok Gulati, former chairman of the Commission for Agricultural Costs and Prices (CACP) — in an exclusive interview — told Business Insider how these reforms should have been brought in years ago.

Finance Minister Nirmala Sitharaman introduced a slew of policy changes to help the agriculture sector in her third instalment of measures help mitigate the effects of the coronavirus lockdown.

“I have been asking for this for 20 years,” Ashok Gulati, former chairman of the Commission for Agricultural Costs and Prices (CACP), told Business Insider in an exclusive interview. The big hits were deregulating the Essential Commodities Act to allow market prices to prevail over essential commodities — and reforms to the Agricultural Produce Market Committee (APMC), which will now let farmers sell their product across India. Combined, they are targetted at making farming more competitive.


Here are the excerpts from the conversation:

Q. How will the APMC reforms effect farmers?

Ashok Gulati: Positively. It would have been better if it was done a few years back. When Mr.Modi came in 1.0 — but better. This is trying to open up the markets.

Q. So, but won't this compound what e-NAM already brings to the table?

Ashok Gulati: So yeah, e-NAM is there, the main thing is today you increasing the stickiness of the APMC markets and your are denotifying that farmers can sell anywhere and that’s very important to any process in the coming years. And that's the main thing.

Q.So why is this for benefit farmers?

Ashok Gulati: When you create competition for their produce, the price improves. There are more buyers, more choices. They will get the benefits of that. Whether you have one buyer or ten buyers for a service makes a difference.

Q. Since they will be able to sell anywhere, will it take away the power of the states in the agricultural sector?

Ashok Gulati: So what is the problem in that? Like I’ve said, it's a big, positive step.

Q. Aside from APMC, I wanted to ask about the Essential Commodities Act...

Ashok Gulati: That's a big-ticket item. All of the last three reforms are bigger than the first eight points. It was completely positive. I might response is congratulations, kudos to but you should have done it in the first year of Modi 1.0. We’ve done now. It’s a corona gift.

Q. How are they going to build up storage to support this amendment?

Ashok Gulati: The government doesn’t need to do anything. A lot has changed. The private sector will come forward and will fight over it. Reliance, Adani and all the others will figure it out. They will pump in the money. You have to change the law, there is ample interest in the private sector. You just need to stay the course. Essential commodities act will not be reinforced.

Q. When the essential commodities act was introduced, it was with the objective to disincentivise hoarding. Who will monitor and ensure that speculation does not occur?

Ashok Gulati: We are not in 1955. Enforcement is exactly what we don’t want. Inspector Raj has to be thrown out of the window. What you need is private-sector competition. These are all useless topics of discussion. All nonsense. They have an unnecessary stronghold on India as though we’re living in the pre-Independence era.

Q. So, basically, the agricultural sector has been liberalised?

Ashok Gulati: Which was overdue. I’ve been asking for this for 20 years. At least with corona, the reforms have finally come in. What hasn’t happened in years, it finally happening thanks to the coronavirus pandemic. There are positive and big bold steps.

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