Village & Post: Nighasan Kheri, 262903 City: Lakhimpur Kheri, 262701

FARM BILL, 2020

Farm Bill - Gourav Ravi Garg

INTRODUCTION

In the future, when there will be a discussion on which year was eventful, probably 2020 will get the top spot in the list and when it comes to India it is at another level, Starting with CAA and NRC protests, celeb death, and drug cases, India- China tussle, COVID covering most of the later part of the year obviously. But there is one topic or issue which manages to get all the importance and which is Farm Bills. Lakhs of farmers marched towards Delhi to compel the government to take this law back.

There are three farm bills which the government has passed. Let’s also march towards the path of knowledge to gain some insights about this issue.

FRAMERS PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION) ACT, 2020

Permits intra-state and inter-state trade of farmers’ produce beyond the Physical Premises of APMC (agriculture produce Market Committee) market and other markets under APMC. It bypasses APMC.

State governments are prohibited from Levying any market fee or state commission or cess outside APMC areas on farmers. This will provide lucrative prices to farmers through alternative trading channels to promote barrier-free trade relations.

States will lose revenue (which is the main source for the maintenance of this system) as they won’t be able to collect ‘Mandi Fees’ in case farmers sell their produce outside APMC markets. If farmers started selling entire farm produce outside these Mandi’s then what would happen to these commission agents? 

The government’s Contention in bringing this Act was the Standing Committee on Agriculture (2018-19) observed that the APMC laws are not implemented properly like they are supposed to be. Identified issues are:

  • Due to the limited numbers of traders operating under APMCs, cartelization, and reduction of competition come to the top.
  • Undue deductions in the form of commission charges and market fees. The dominance of collective associations of traders, commission agents, and other functionaries do not allow easy entry of new persons into the market.
  • The Acts are highly restrictive in promotion of multiple channels of marketing (such as more buyers, private markets, direct sale to businesses and retail consumers, and online transactions) and competition in the system.

If APMC Laws are not implemented properly, this doesn’t mean, the system needs to change, what they can do is to make it more applicable. If they allow the selling of produce, outside the APMC market without cess then they will eventually fall prey to large traders like Reliance, TATA, etc which will ultimately lead to Cartelization and reduction of competition. The government has not solved this problem in fact they have made the problem inevitable. In the case of the highly restrictive nature of acts, I would only say sometimes strictness to work is the best method to save one from getting fall into the prey of other big retailers.

I am not Tagging Big retailers as Villains; I am only saying they are the ones who can influence the market and people in a very biased way. Now here comes the issue of MSP.

Minimum Support Price is the minimum price that acts as a safety net for farmers when they sell their particular product. MSP is set up by the government and there can’t be any alteration or other changes no matter what the conditions are which means a farmer will get that particular fixed amount of money. MSP protects farmers at a time when there is a sharp price decline.

But here is one thing which seems strange, MSP is not a law. In simple, MSP is not a written law or mention specifically in any law book even it has been around for decades. There is now law to declare it valid for the same.

MSP cannot be imposed on private firms also, which means big retailers can influence, not directly but with overtime, they will, but this seems very far-fetched and unnecessary demand as for that MSP itself need to be on the paper. If farmers are allowed to sell outside the APMC market without any cess or other things, small and vulnerable farmers will fall under the exploitation of the big private corporates. Plus already existing APMC structure is exploiting farmers through a middleman (commission agents) and now with the entry of big private players, the big middleman, there will be more damage.

Farmers are in all demanding written document or written guarantee from the government regarding the inclusion of Big Private Middleman in MSP

THE FARMERS (EMPOWERMENT AND PROTECTION) AGREEMENT ON PRICE ASSURANCE AND FARM ACT, 2020

This act specifies farming agreement and how this Farming agreement system will work.

  • The act provides for an agreement between a farmer and buyer before the production or rearing of any farm produce. 
  • The minimum period is one crop cycle of this agreement or one production cycle of livestock. The maximum period is 5 years unless the production cycle is more than 5 years.
  • Pricing should be mentioned in the agreement earlier. Parties making agreements are required to specify the guaranteed price. There is also the provision of an additional amount above the fixed guaranteed price provided it should be mentioned in the agreement. 
  • An agreement must provide for a conciliation board and the required process for the dispute settlement in the agreement. All the disputes should be referred to the board itself and if the dispute still persists even after 30 days then the matter should be referred to the area Sub-Divisional Magistrate. There is also provision for appellate authority and both Magistrate and appellate authority have to complete the process in 60 days.
  • There is also the penalty provision but authorities cannot take any action over the agricultural land of the farmer for the claim of the dues or penalty.

Tamil Nadu is the first state to make provisions for contract farming even before the passage of the act.

The act is very promising in nature. There is an uncountable number of cases where farmers were harassed for selling their produce in the APMC market and by other processes. They have to follow a very tedious and long process to sell their produce in the market. Plus making mandatory fixing of the guaranteed amount of the product before the production and rearing is a very welcoming step. Here, farmers need not worry much about getting the amount even after unsuccessful produce. This step is like net safety insurance for the farmers, which will boost confidence among the farmers.

This system acts like an alternate option for the problems which the government has ignored deliberately in the Farmers Produce Trade and Commerce (Promotion and Facilitation) Act 2020.

THE ESSENTIAL COMMODITIES (AMENDMENT) ACT, 2020

This act is purely on the sidelines of The Essential Commodities (Amendment) Act, 2020 with the addition of Stock Limit.

  • It requires that the stock limit must be set according to the price rise.
  • The limit can only be set when there is a sharp increase in retail price rise.
  • It must be noted that the stock limit applies only to traders, so this act should not be bothering farmers as long as they don’t keep quantities beyond their requirements and other limits.

Jumping to the conclusion, we must not forget that nothing is perfect. But on the other hand, authorities can’t take this thing for granted in the name of nothing is perfect. The protest is our fundamental right but there has to be a boundary line also and that line is very must in such times.

We must keep in mind that protest is not a solution.

Author(s) Name: Gourav Ravi Garg (Dr. B.R. Ambedkar National Law University, Sonipat)

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