The present article has been written by Akrati Jain during her internship in LeDroit India
Since 26th November 2020, the borders of Delhi are witnessing an enormous agitation being dole out by farmers, most of them from geographical region Punjab and Haryana.
The farmers are complaintive against three Farm Bills that the Rajya Sabha recently passed:
(1) The Farmers’ manufacture Trade and Commerce (Promotion and Facilitation) Bill, 2020, and
(2) The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020,
(3) The essential commodities (amendment) bill, 2020.
The 3 bills had already cleared the lower house – the Lok Sabha. When they were introduced in the Rajya Sabha, there was ruckus and finally, the Bill was passed through a voice vote.
These bills lay the framework for allowing farmers to sell produce directly to corporate, argues the centre.
The farmers in the states of Haryana and Punjab feels unsafe that the government will remove the minimum support price from the farmers and by the past experience of the government privatization policy the farms feels uncomfortable and unsatisfied with the views of the government. Although government intentions till now are that this bill will be beneficial for farmers and will help them to induce costs for their crops within the market.
Pros and Cons –
The introduction of the bill is predicated on the concept of “One India, One Agricultural Market”. It aims at gap the gates for farmers to the corporate world to form extra mercantilism opportunities on the far side the APMC market yards to assist farmers to induce remunerative costs due to extra competitive world.
On the opposite hand, the opposition is of the read that the bills passed challenges the three pillars of the food security system i.e. Minimum Support Price, Public Procurement and Public Distribution System. It’s additionally argued that the bills are ‘anti-farmer’ as farmers are being handed over to the capitalists who will encroach them and exploit them instead of empower.
(1) The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
This Bill permits the farmers to sell their manufacture outside the Agricultural Produce Market Committee (APMC) regulated markets. The APMCs are government-controlled selling yards or mandis. So, the farmers clearly have additional alternative on who they want to sell.
- The farmers produce trade and commerce (promotion and facilitation) bill permits barrier-free intra-and inter-state trade of farm produce.
- Previously, farm produce was sold-out at notified wholesale markets, or mandis, pass by – 7000 agricultural produce marketing committees (APMCs).
- Every APMC had licensed middleman who would purchased from farmers – at cost set by auction – before merchandising to institutional consumers like retailers and massive traders.
A. THE CHANGE-
1) New System – farmers will eliminate middlemen and sell directly to institutional consumers at costs to be agreed between them.
2) However, farmers’ teams are disquieted this exposes them to company who have additional negotiation power and resources than little or marginal farmers.
3) 85% of farmers own less than two hectares of land – tough for them to barter directly with large-scale consumers.
B. ISSUE IS WITH THE LEGISLATION –
Issue here is that the terribly right of the centre to enact legislation on agricultural marketing-
ARTICLE 246 OF THE CONSTITUTION OF INDIA stated that “agriculture” in entry 14 and “markets and fairs” in entry 28 of the state list however entry 42 of the union list empower the centre to control “inter-state trade and commerce.”
Whereas trade and commerce “within the state” is under entry 26 of the state list.
It is subject to the provisions of entry 33 of the concurrent list – below that the centre can create laws that might prevail over those enacted by the states.
Entry 33 of the concurrent list covers trade and commerce in “foodstuffs, as well as edible oilseeds and oil”, fodder, cotton and jute.
Going by the interpretation, the centre is among its rights to frame law that promote barrier-free trade of farm manufacture (inter – as well as intra- state) and don’t enable stockholding or export restrictions. However these are solely once the farmer has sold-out.
Regulation of first sale of agricultural produce may be a “marketing” responsibility of the state, nor the centre.
- Farmers having the choice to sell their agricultural produce at a place of their choice beyond the APMC market yards at a better price, thus increasing the number of potential buyers.
- No trade barriers it will facilitate interstate commercialism promotion the conception of ‘One Nation, One Market’.
- It’ll increase competitiveness within the market making certain higher costs for their yield.
- Interact in trade through electronic commercialism platforms, saving multifariously associated such as selling, marketing and transportation.
- A separate dispute resolution mechanism for the farmers to avoid pending or unfinished court litigation/proceedings.
- Loss of revenue to the states because the farmers can sell their agricultural produce on the far side APMC markets. The “mandi fees” collected are a various medium of revenue for the state government which will be hampered due to the introduction of this new bill.
- Closure of the business of “Commission Agents” due to elimination of middle man as the farmer can sell his yield directly to the registered trader.
- Eventually, it’ll place associate finish the MSP based mostly procurement system.
- It’ll cause to the destruction of the mandi system.
(2) The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020:-
This Bill makes provisions for the fitting of a framework for contract farming or we can say that this act must do with providing a restrictive framework for contract cultivation. The farmer associated an ordained customer will strike a deal before the production happens.
1- This law can enable farmers to enter into agreements with agri-firms, exports or giant consumers to supply a crop for a pre-agreed value. This specifically issues agreements entered into by farmers with agri-business companies earlier than any planting/ rearing season for supply manufacture of predetermined or decided quality at minimum secured costs.
2- Farmers are disturbed this means the MSP will be removed/ no government, control or management over prices or contract costs on agricultural produce.
3- Demand- link MSP to contract costs.
4- Such exclusive agreements between firm and farmers are already operational in crops of specific processing grades (for example – the potatoes used by beverages and snacks giant PepsiCo for its lay’s and uncle chips wafers).
The processors/ exporters in these are usually not solely undertake assures purchase at pre – agreed prices, however additionally offer farmers seeds/ planting material and extension support to make sure that solely manufacture of desired standard is grown.
- Facilitating the farmer to enter into a directly or business agreement with the business manufacturing food merchandise, wholesalers, retailers, and exporters, etc. This may eliminate the concern of exploitation and making certain access to the world market.
- Investment by the client in terms of infrastructure and technology to foster the production of food grains. This may scale back the price and improve their financial gain as access to modern technology is going to be achieved.
- Once the terms of the contract are determined the client can offer the means that to yield a better quality crop.
- The contract can solely be for agricultural manufacture and not for the agricultural land. The farmers are going to be the owner and can avail loan and credit facilities from financial institutions if the need be.
- Crops underneath the agreement shall be exempted from the foundations and laws with reference to the sale of agricultural manufacture and also the provisions of the Essential Commodities Act.
- The company associated traders can have a favorable position and can be good players because the farmers have weak negotiation skills to grab a fruitful deal for themselves.
- The tiny and marginal farmers could also be bereft of sponsors.
- Just in case of disputes, the exporters, corporate, or the other sponsor can have a grip.
- It offers independence to company and not farmers as there’s no mention of MSP within the bill and also the same is that the reason for protest by the farmers.
(3) THE ESSENTIAL COMMODITIES (AMENDMENT) ACT, 2020-
ESSENTIAL COMMODITIES (AMENDMENT) ACT, 2020 is regarding doing away with the centers’ power to impose stockholding limits on foodstuffs, except underneath “extraordinary conditions”.
These may be war, famine, alternative natural calamities of grave nature and annual retail value risk exceeding 100% in agricultural manufacture (basically onions and potato) and 50% for non-perishables (cereals, pulses and edible oils).
On condition that stock limits apply solely to traders, it shouldn’t concern farmers the least bit. Farmers, it something, would gain from removal of stocking restrictions on the trade, because it doubtless interprets into unlimited shopping for and demand for their manufacture.
1- The essential commodities (amendment) bill proposes to permit economic agents to stock food articles freely while not the concern of being prosecuted for hoarding.
2- Final stocking will cause artificial value fluctuations and low costs for farmers for farmers once harvest.
- Allow non-public investment within the agricultural sector. This may facilitate to supply a pool of funds to the farmers to facilitate the production of crops.
- Facilitate each farmer and client to bring value stability.
- Removal of cereals, pulses, oilseeds, onion, and potatoes from the essential commodities to try to away with the imposition of stock holding limits. It permits the government to require back management if there are extreme things like extraordinary value rise, war, famine, or natural calamities of severe nature.
- It’ll encourage non-public sector investment in cold storage and pave ways in which for modernizing the availability chain.
- Removal of stock limits, making certain a bigger marketplace for farmers attracting investments in infrastructure and transportation due to fewer government restrictions.
- The liberty stock commodities can cause exploitation because the massive firms can charge immoderate costs.
- The value limit set for “extraordinary circumstances” is thus high that they’re possible to be ne’er triggered.
TIMELINE OF THE PROTESTS-
1- On 5th of June, 2020 government of India implements 3 farm ordinances that trot out agricultural manufacture, their sale, hording, agricultural selling and contract framing reforms.
2- These acts are as follow-
• Framers’ produce trade and commerce( promotion and facilitation) Act,2020
• Farmers (empowerment and protection) agreement on price assurance and farm services Act, 2020.
• Essential commodities ( amendment) Act 2020
1- Farm unions everywhere bharat referred to as Asian nation bandh to protest against these farm laws on 25 September 2020.
2- The foremost wide unfold protest passed off in Punjab and Haryana however demonstrations were additionally, reports in province, Karnataka, Tamil nadu, odisha, Kerala and alternative states.
3- Thousands of farmers enter Delhi, on 27th November, through the tikri border.
4- The central government of India has assigned the discussing the longer term of the new farm laws.
GOVERNMENT POINT OF VIEW
The government has aforesaid these reforms can accelerate growth within the sector through non- public sector investment in building infrastructure and provide chains for farm manufacture in national and world markets. They’re meant to assist tiny farmers who don’t have means that to either [bargain/discount/cut value] for their manufacture to urge a higher price or invest in technology to enhance the productivity of farms. The bill on Agri market seeks to allow farmers to sell their produce outside APMC ‘mandis’ to whoever they want. Farmers can regain costs through competition and cost-cutting on transportation. However, this Bill may mean states can lose ‘commissions’ and ‘mandi fees’. The legislation on contract farming can enable farmers to enter into a contract with agri-business companies or giant retailers on pre-agreed costs of their manufacture. The Essential Commodities (Amendment) Bill, 2020, seeks to get rid of commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. This may finish the imposition of stock-holding limits except underneath extraordinary circumstances.
There is abundant uncertainty between the middle and also the states the farmers aren’t feeling safe with the government. Stance as they feel that they weren’t informed or no farmers organization were in grips with the government at the time of once the bill was being written. As of the stance of presidency needs the farmers financial gain can improve with this bill .but the question remains that the farmers are still confused and their sustenance is in peril. Whereas most of the political parties are seeking edges of those farmers protests.
WHY ARE THE FARMERS UPSET
The farmers of province Uttar Pradesh, Punjab, and Haryana are angry with the provisions of those Bills as they’re afraid that these bills could also be the platform that the government (at the Centre) is fitting for the replacement or scrapping of the otherwise strong web prevailing in their states for the acquisition of their crops. They concern that the Minimum Support Price (MSP) guarantee that was their safety net since the Green Revolution of the 1960s kicked in perhaps snatched removed from underneath the pretext of giving the farmers a lot of talking part in ground and higher platforms.
The state-government driven crop manufacture procurement infrastructure in these areas is extremely sensible. Procurement through the Food Corporation of India at secure MSP to farmers that are said before each agriculture season encourages farmers to specialize in taking a lot of yields.
23 agricultural crops have MSPs, although the governments primarily get solely rice and wheat. Farmers concern the two recent bills because they feel these agriculture reform methods can kill the government procurance process further as the MSP. And why we have a tendency to see most protesters from Punjab and Haryana? That is as a result of they’re the largest beneficiaries of this safety net.
a) FARMERS’ OBJECTIONS-
1- ALTERNATE non- public ‘mandi’ can cause final closure of exiting APMC ‘mandi’.
2- No tax on non- public/ private ‘market.
3- Removal of geographic restriction – tiny farmers could notice it tough to avail doubtless higher costs at markets further away owing to constraints on travel and storage.
4- There was no restriction on farmers to sell elsewhere earlier too.
b) DEMANDS OF FARMERS ORGANISATION-
1- The acts are a lot favorable towards the corporate and not lawfully empowering the farmers.
2- Strengthen MSP- MSP to be created a legal right. – Presently procurement is not finished all 20+ crops that MSP is declared.
1- If non-public consumers begin getting directly from farmers, they are going to lose out on taxes that are charged at mandis.
2- The potential scrapping of mandis endangers the roles of millions who work there.
APMC REFORMS ARE REQUIRED, NOT ITS REMOVAL-
• The middleman won’t get away.
• Investment in agricultural sector should be from government, not non- public sector.
• Non- public markets – higher costs for manufacture – higher for farmers.
• No a lot of government support of MSPs – farmers at the whims of market / company.
The farmers are the soul of the state and their growth and upliftment is that the foremost duty to be taken care of by the government. The passing of the bills may be a step within the right direction providing an even bigger platform to the farmers to urge the required value their agricultural produce. It’ll bring revolutionary changes within the lives of the farmer. The reforms can accelerate agricultural growth through non-public sector investment in constructing agricultural infrastructure and provide chains for Indian farm manufacture in national world markets, generate employment opportunities, and strengthen the economy. Farmers are going to be free of the clutches of commercialism their manufacture at selected places. The procurance of MSP can continue and ‘mandis’ established underneath state law will still operate. It will empower the farmers and foster their growth and development within the country reshaping the Indian economy.