Relevance : GS Paper III
NITI Aayog has called upon the state governments to undertake structural transformations of the Indian agricultural sector
Reforming the ECA
Relaxation of ECA(Essential Commodities Act) will help farmers get the right price for their produce, while increase in availability will give (price) relief to consumers.
The concern with reforms of ECA
- Will the commoner lose protection against irrational spikes in food prices?
- Even with the ECA, governments have not been able to control price volatility effectively..
Can ECA reforms be successful?
- Amending the ECA is a contagious issue, especially for such crops with fixed administered price.
- Once the government commits an assured price to the growers, an essential corollary is that it must ensure the offtake of whatever is produced.
- In the case of crops such as sugar cane, there is a political clout within the sugar milling industry that would resist any relaxation of control
Govt. purpose of modifying the act
The purpose of modifying the actis to encourage the much-needed investments in agricultural marketing.
Agricultural reforms will stand the test of time only if it can create an “enabling environment” for making these reforms work.