■ Centre declares Soya Meal as an Essential Commodity up to 30th June, 2022-
✓Recently, the government has notified, under the Essential Commodities Act 1955, to declare ‘soya meal’ as an essential commodity up to 30th June, 2022.
✓This step is expected to stop any unfair practises (like hoarding, black marketing etc) in the market having the potential to hike the prices of soya meal.
✓This will also enhance the availability of the commodity for consumers like poultry farms and cattle feed manufacturers.
● About Soybean Meal:
✓Soybean meal is the most important protein source used to feed farm animals. It is also used for human consumption in some countries.
✓It represents nearly two-thirds of the total world output of protein feedstuffs, including all other major oil meals and fish meals.
✓Soybean meal is the by-product of the extraction of soybean oil.
● About Essential Commodities Act 1955:
✓Background: The ECA Act 1955, was legislated at a time when the country was facing a scarcity of foodstuffs due to persistent low levels of foodgrains production.
✓The country was dependent on imports and assistance (such as wheat import form the US under PL-480) to feed the population.
✓To prevent hoarding and black marketing of foodstuffs, the Essential Commodities Act was enacted in 1955.
● Essential Commodity:
✓There is no specific definition of essential commodities in the Essential Commodities Act, 1955.
✓Section 2(A) states that an “essential commodity” means a commodity specified in the Schedule of the Act.
● Legal Jurisdiction:
✓The Act gives powers to the central government to add or remove a commodity in the Schedule.
✓The Centre, if it is satisfied that it is necessary to do so in public interest, can notify an item as essential, in consultation with state governments.
● Objective:
✓The ECA 1955 is used to curb inflation by allowing the Centre to enable control by state governments of trade in a wide variety of commodities.
● Implementing Agency:
✓The Ministry of Consumer Affairs, Food and Public Distribution, implements the Act.
● Impact:
✓By declaring a commodity as essential, the government can control the production, supply, and distribution of that commodity, and impose a stock limit.
● Issues Related to Essential Commodities Act 1955:
✓The Economic Survey 2019-20 highlighted that government intervention under the ECA 1955 often distorted agricultural trade while being totally ineffective in curbing inflation.
✓Such intervention does enable opportunities for rent-seeking and harassment. Rent-seeking is a term used by economists to describe unproductive income, including from corruption.
✓Traders tend to buy far less than their usual capacity and farmers often suffer huge losses during surplus harvests of perishables.
✓This led to farmers being unable to get better prices due to lack of investment in cold storage, warehouses, processing and export.
✓Owing to these issues, the Parliament passed the Essential Commodities (Amendment) Bill, 2020. However, due to farmers’ protest the Government had to repeal this law.”
