The high-level panel also asked the government to work towards re-orienting subsidies in a targeted manner from the crop sector to the non-crop sector and redesign the electronic National Agriculture Market.
To push growth in the farm sector, a high-powered panel of chief ministers on Thursday proposed the Centre to link grants and allocations made by the Finance Commission to states with reforms in the sector.
It also asked the government to work towards re-orienting subsidies in a targeted manner from the crop sector to the non-crop sector and redesign the electronic National Agriculture Market (eNaM).
The panel also decided to look into whether the food sector could be taken off the ambit of the Essential Commodities Act, 1955, or how to avoid instances when the Act can be triggered.
It would also find ways in which investment credit in the agriculture sector could be made cheaper to encourage private sector investments.
“In the case of eNaM, it was felt that though it is a good initiative, not all states have adopted it as there are some teething problems which will be addressed in consultation with the states.
"In the case of the Essential Commodities Act, a common view was that it is sometimes detrimental to farmers getting a good price for their produce,” Maharashtra Chief Minister Devendra Fadnavis told reporters after the maiden meeting of the High-Powered Committee of Chief Ministers for Transformation of Indian Agriculture.
Fadnavis heads the panel, which also comprises Gujarat Chief Minister Vijay Rupani, his Haryana and Madhya Pradesh counterparts Manohar Lal Khattar and Kamal Nath, respectively, among others.
The proposal on linking central grants and the Finance Commission’s transfers to agriculture reforms was also discussed in the meeting.
"Grants of the central government and fund allocation of the Finance Commission should be linked with agricultural reforms undertaken in states," said Fadnavis, adding that it is essential to ensure simultaneous reforms in states.
“Kamal Nath was in favour of scrapping the Essential Commodity Act,” he said.
Nath also called upon the Union government to work towards the elimination of non-tariff barriers in exporting countries.
Fadnavis said a mechanism would also be developed at both commerce and agriculture ministries to accurately forecast domestic and global demand and supply, based on which sowing and harvest decisions would be made.
The panel also discussed ways to promote the food processing industry.
“There was a proposal to decentralise food processing activities,” said Fadnavis, as he stressed the need for boosting private investment in the agriculture sector and promoting contract farming.
Fadnavis said the committee has finalised terms of reference (ToR), and states have been asked to give their feedback by August 7.
The panel will again meet on August 16.
Rupani in his address said the criteria to calculate a farmer's income should be based on his/her profit and by changing the role of markets, benefiting farmers would be easier.
Photograph: Rupak De Chowdhuri/Reuters
