Written By: Diksha Tarnekar
The government has left us at the mercy of big corporations.
-Raspinder Singh, a farmer.
Agriculture contributes to nearly 1/3rd of India’s GDP. It provides livelihood to farmers and food to major Indian population. Farmers are the backbone of the nation’s economy as India is an Agriculture based country. Due to the course of time, Government has implemented various programs and policies for the benefit of farmers and their produce.
Recently, in the Monsoon session of Parliament, three ‘Farm Bills’ were passed for the farmers with the aim to make it easier for them to sell their produce directly to private buyers and enter into contract with private companies.
The bills were opposed by the opposition parties but amidst of the chaos, it was passed by the Lok Sabha. The passing of the bill resulted in the uproar and backlash by the farmers of the nation mostly from the parts of Punjab and Haryana. They believe that the bills are tightly controlled in the agriculture sectors to free market forces. The opposition party has called the bills ‘black law’ and ‘pro-corporate’. The Government assure that these bills will provide safeguard to the farmers from the adversities of middlemen.
Earlier, under the Agriculture Produce Marketing Committee Act (APMC) Act of 1964, it was mandatory for farmers to sell their produce in government regulated markets where the middlemen helped them to sell their produce to state-run companies or private buyers.
- What are the Farm Bills?
Since these bills were passed without much debate in the Parliament, people all over India opposed it energetically. These bills allow the farmers to sell their agriculture produce directly to the private buyers or companies eliminating the role of middlemen. The farmers are afraid that the implementation of these bills will end the monopoly of APMCs and MSP-the price at which Government buys farm produce will not be scrapped.
Following are the legislations assented by the President Mr. Ram Nath Kovind.
- The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020.
- This Act opens up for agricultural sale and marketing outside the defined State APMCs for farmers.
- It removes the inter-state barrier trade.
- It provides framework for electronic trading of agriculture produce.
- It prohibits State Government from collecting market fee or levy trade outside the APMC markets.
- Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Service Act, 2020.
- This Act provides a national framework for a written farming agreement which allows the buyers and the farmers to enter into an agreement prior to the production or rearing of any farm produce.
- This Act is also known as ‘Contract Farming Law’.
- The advantage of this act is that it will shift the risk of market unpredictability from farmers to the sponsors and also enable the farmers to take benefit of the modern technology.
- The mutually agreed remunerative price framework envisaged in the legislation is touted as one that would protect and empower farmers.
- Essential Commodities (Amendment) Act, 2020.
- This Amendment Act deregulated the production, storage, movement and distribution of essential crops such as cereals, onion, potatoes, pulses, oilseeds and edible oils.
- This Act imposed a stock limit on agriculture produce on the basis of price rise.
- Promising Features of the Farm Laws
- The new legislation will create an ecosystem and provide freedom of choice to the farmers and traders to sell and purchase the agriculture produce.
- It will promote the interstate and intrastate trade outside the prescribed physical premises notified under the State Agriculture Produce Marketing Legislations.
- The bills will provide more choices to the farmers by reducing the marketing costs and helping them getting in better prices.
- The bill has proposed an ‘Electronic Trading System’ to ensure seamless electronic transaction where farmers won’t have to pay any cess or levy for their Agriculture Produce.
- The bills aim for ‘One India, One Agriculture Market’ which will create opportunities for farmers outside the APMC market to help them get remunerative prices in the additional competition.
- The new agriculture laws will not shut down APMCs and neither they are implying to shut down MSP which provides a stable income to the farmers.
- How the Farm Bills benefit Farmers?
Gurucharan Das, expert in the field of Economics, pointed out that these bills will provide three basic freedoms to the farmers-
- Farmers can sell their agriculture produce outside the monopoly of APMCs to anyone and anywhere.
- Farmers can enter into a written farming agreement prior the production of the produce which will transfer the risk of market unpredictability to the businessman and the buyers.
- Farmers will be free to store the inventory which was constrained by stocking limit.
- Why are Farmers Protesting?
The farmers of Punjab, Haryana and Western Uttar Pradesh are mainly protesting because they are afraid that the Government through these bills is setting up for replacement or scraping of the robust support system which prevails in their states for the purchase of the crops. They believe that under the new farm bills, Minimum Support Price (MSP) which gave them the safety net since the Green Revolution of 1960s will be snatched from them in the pretext of providing them with better platform. Farmers are of the view that these laws may weaken the established APMC system which is beneficial for them.
As per the suggestions of agriculture economists, the focus of the Government should be on strengthening the APMC system rather than shifting everything to the private entities and corporates.
Also, the state-government driven crop produce infrastructure is well-established in these areas. Procurement through the Food Corporation of Indiaat the rate of MSP for the farmers is announced before every agriculture season which encourages farmers to focus on more than one yield.
As the new agriculture laws is trying to bring the big corporate houses in the picture, farmers are afraid that they will be exploited by their hands.
- Why the Protest is Justified?
- There was no consultation undertaken by the Central Government at the time of promulgating the ordinances while pushing the bills through Parliament.
- Union Government by-passed the federal structure under Entry 33 Concurrent List by legislating on subjects which falls under the ambit of State Government under State listas mentioned under Seventh Schedule of the Constitution which disproportionately empowered the Centre in the management of Agriculture.
- The global experience across agricultural markets shows that corporatisation of agriculture without any security net in the form of an assured payment guarantee to the farmers results in the exploitation of farmers at the hands of big business.
- The primary concern which arose after the passing of the agriculture laws is that the APMCs are carefully dismantled which provided safeguard to the farmers. The laws provided a platform to the buyers where they are not obligated to pay the minimum support price to the farmers. The private buyers will not be charged any market fee or levy.
- Market fee which was collected by APMCs for the development of rural infrastructure, storage facilities and link roads will be reduced due to the shifting of trade to avoid payment of market fee or levy by private players and Food Corporation of India (FCI) which will leave farmers at the hand of corporate sharks.
- What lies ahead?
- Academic Excellence and Accelerating research can prove to bring the best technologies which can multiply farmer’s income.
- The Government should focus on better Water conservation measures and soil health improvement to increase farm productivity.
- The Government should work on creating a clear roadmap for providing a value-added service such as leveraging warehouse, cold chains and food processing infrastructure to the farmers.
- Farmers can be made part of Entrepreneurial Ecosystem which will guide them to diversify the high-value crops and which in return will help India in becoming food processing hub for the world.
With the declaration of the new Agriculture Laws 2020, it created havoc in the nation with farmers from all over the parts protesting and declaring hunger strike. Some people find no faults in the engineering of these bills, while some fear that it will lead to Corporatization Agriculture. Farmers are asking for legal guaranteed remunerative prices and Government should deliver all the details through a Parliamentary Scrutiny. Political leaders and their parties that are opposing these bills should keep up with farmer’s interest and not their party ideologies.
Because it’s the Son of the Soil who is suffering the most in the end.
 National Law Institute University. Bhopal.
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