Raising farm incomes may top budget agenda

nNEW DELHI: The forthcoming Union Budget may do away with the penal provisions of the Essential Commodities Act in a move many experts see as a radical piece of agricultural reform -one that could increase farm incomes.

The government is considering repealing penal provisions of the Essential Commodities Act (ECA) such as preventive detention, confiscation of vehicles and attachment of properties so that merchants can directly purchase produce from farmers in large quantities, people familiar with the development said on condition of anonymity.

The Act imposes restrictions on the agricultural economy by limiting quantities traders can n It limits quantities traders can buy from

farmers and hold as stock. n In the commodities market, it is mainly used to target black-marketers, who may hoard commodities. It is also used to rein in prices of items deemed essential. n But analysts say that if traders cannot buy or hold sufficient quantities of grains for certain profit margins, they will not buy out surpluses from farmers.

buy from farmers and hold as stock. There are no permanent storage ceilings or commodities named in the Act but the law empowers the government to

WHAT COULD CHANGE? Penal provisions, such as detention and attachment of properties, among others, may be done away with so that merchants can directly purchase produce from farmers in bulk.

include or exclude items when “deemed necessary” -- something that makes life difficult for traders and merchants.