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An overview of the new Farm Bills 2020

Introduction

India recently witnessed a strong protest by the farmers and concerned people after the parliament, on 20th September 2020 passed three agribusiness bills. These bills replaced the ordinances issued in June 2020. There are new ideas and changes in some key aspects of the agricultural economy that the bills brought.
Farmers’ Produce Trade and Commerce (Promotion & Facilitation) Bill, 2020 introduced the concept of ‘One Nation-One Market’ to permit farmers to sell the produce anywhere in the nation. Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 introduced contract farming to enable farmers to engage with wholesalers, exporters etc. so that farmers can get assured price before sowing the crop. Essential Commodities (Amendment) Bill, 2020 removed pulses, oilseeds, onions and some other products from the essential commodities list, and consequently the limitations on the capacity of these things will be removed.

Background

The farmers offer the produce to state controlled mandis at MSP. The bill expresses that farmers are permitted to exchange items outside “the physical premises of market yards run by market boards shaped under the state Agricultural Produce Market Committee (AMPC) Acts”. The boards are pointed toward controlling the markets and look upon the farmers. The reason for such a dissent by the farmers is that they dread that the bills will disturb the mandi arrangement and furthermore hamper the selling of the items at MSP. A large portion of the farmers feel that this will end the entire whole sale markets and the private players will have an advantage and will abuse the farmers by choosing the cost according to their needs. Significant dissent was on the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill. The farmers fought to renounce all the three ordinances turned bills.

Strengths of the Farm Bills

• Framers will have an additional marketing channel as they would be able to sell their produce as per their will outside the physical territory of the mandis. Also, the problem of middlemen will also be removed. These bills lead the farmers to a more liberated and adaptable framework.

• Some states produce surplus amount of vegetables and fruits but some states have less supply and more demand. This One Nation-One Market can reduce this gap and benefit the consumers.

• This will lure private investments in the agricultural industry. The investments made will improve the grading, warehousing & infrastructure of the agricultural sector by introducing new technologies.

• The farmers will get assured prices of the produce before hand as a contract farmer. The input cost for the farmers will be reduced as some companies may provide seeds, fertilizers and other equipment required.

• The amendment to the Essential Commodities Act which is one of the three bills can help in stabilizing the prices. under dissent eliminates the alarm or dread of the ranchers that brokers who purchase from ranchers would be rebuffed for holding stocks that are esteemed abundance and exacting misfortunes for the farmers.

• In the current APMC structure, it is compulsory for farmers to encounter a dealer (through Mandis) to offer their produce to purchasers and organizations and they get Minimum Selling Prices for their produce. This structure has impacted the ascent to a cartel drove by dealers and uncompetitive business sectors because of which the farmers are paid MSP (a low cost) for their produces.

Weaknesses of the Farm Bills

• The way towards passing the bill is not popularity based. Agribusiness and exchange are state subjects, however the opinion of states were not considered before passing the bills. The farmers were also not given any option of conveying their views in the bills which are for them. In parliament also, the bills were passed by mere voice voting.

• APMCs are exceptionally useful for small farmers to offer the produce as well as to know the costs and production choices. Many states have changed the APMC Acts to make it more liberal. The passing of Farm Bills 2020 may debilitate the APMC system and subsequently can turn into a hindrance to small farmers.

• There is no assurance that the farmers’ income will be expanded by these bills. Agrarian financial specialists are proposing that it is imperative to fortify the APMCs, rather than moving the duty to private substances, considering the situation of Bihar when the state removed APMCs.

• The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill doesn’t give any legal sponsorship to MSP. MSP is a price at which they sell the produce. The said bill does not even mention about MSP or Procurement once. The legislature pronounces MSPs for crops, however there has been no law commanding their execution.

• The small farmers will have to suffer more under these bills. The expenditure of shipping the produce is way more than selling it in the local APMCs. One country-one market may not be helpful to small farmers.

• Contract Farming may transform ranchers into slaves. The new bills are setting farmers and traders helpless before government employees.

• Eliminating the limitations on the capacity of some food grains may prompt more imports at lower cost affecting the domestic farmers. What’s more, huge organizations may store the food grains to build the costs falsely.

• Except if the prices are directed by the government, the market will go under the control of large businesses putting both the ranchers and the customers at the danger of abuse.

Conclusion

There was an urgent need to bring a reform in the agricultural sector seeing the situation of the farmers. The recent Farm Bills are to improve the farmers’ income, attract investments and technologies, and increasing productivity and profits. But with these changes they will lose their commissions and the State government may lose pivotal taxes. The government may also try legally backing the minimum selling prices and procurement in the new bill to eliminate the fear in farmers and to answer their protest as the farmers are more concerned about the MSPs. Before thinking of removing the middlemen the government should improve the transport facilities, road linkage, climate-controlled storage facilities and electricity supply. Therefore, in a country like India where majority of the population is depended on agriculture as an occupation, the destiny of the farmers can’t be left with fate of the market.

Author :

Rituparna Patra (National University of Study and Research in Law, Ranchi)