Home Governance FARMER BILLS 2020

FARMER BILLS 2020

Introduction:

Agriculture in India also contributes significantly to gross domestic product (GDP).In the situation of food security, rural employment and environmental techniques like soil conservation, management of natural resources, sustainable agriculture are essential for the development of the entire rural area.For overall rural development, the Indian agricultural sector has been a symbol of the Green Revolution, Yellow Revolution, White Revolution and Blue Revolution.
The condition of most farmers is terrible in India. About 80% of farmers in India are marginal category.
Agriculture supports about 60% of employment but contributes only 17% to GDP. Every day, there are reports of Indian farmer suicides from different parts of the country. People sitting in air conditioner rooms are formulating policies to rectify the problems of farmers.
On Friday, September 25, farmers’ organisations across the country gave a call for a bandh to protest three farm bills — the Essential Commodities (Amendment) Bill, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill (commonly referred to as the APMC Bypass Bill), and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill.

Projected as historic reforms, the government promises freedom to the farmers from the “villainous and exploitative” Agricultural Produce Marketing Committee (APMC) mandis and from the middlemen who charge commission from trade in these mandis. The attempt to reform the functioning of the mandis is not new and has been in process for the last two decades, starting from 2001 when the expert committee on agricultural marketing submitted its report. Since then, three different model APMC acts have been proposed by previous governments (in 2003, 2007, and 2013) and in 2017 by the current government, none of which led to the kind of protests that have been witnessed over the last two weeks.

Background:

In India, for a bill to become a law, it has to go through a number of stages. Firstly, a bill if non-monetary can be introduced in either house of the Parliament and after being passed by the majority in both the houses, sent for the assent of the president and this is how a bill becomes a law. The recent two Farm Bills are passed by the Loksabha and will be placed before the Rajya Sabha for further deliberation. The ruling party is confident that the bills will definitely make the passage in the Upper House as well. There is a heatwave in the opposition which can be seen rising amid which BJP’s oldest ally Shiromani Akali Dal (SAD) leader and Union minister Harsimrat Kaur Badal resigned from the Cabinet in support of the farmers to express her dissent for the bills.

Highlights of the Ordinance

1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 allows intra-state and inter-state trade of farmers’ produce beyond the physical premises of APMC markets. State governments are prohibited from levying any market fee, cess or levy outside APMC areas.
2. The Farmers Agreement Ordinance creates a framework for contract farming through an agreement between a farmer and a buyer prior to the production or rearing of any farm produce. It provides for a three-level dispute settlement mechanism: the conciliation board, Sub-Divisional Magistrate and Appellate Authority.
3. The Essential Commodities (Amendment) Ordinance, 2020 allows the central government to regulate the supply of certain food items only under extraordinary circumstances (such as war and famine). Stock limits may be imposed on agricultural produce only if there is a steep price rise.

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020

Benifits :
• Trade of farmers’ produce: The Ordinance allows intra-state and inter-state trade of farmers’ produce outside: (i) the physical premises of market yards run by market committees formed under the state APMC Acts and (ii) other markets notified under the state APMC Acts. Such trade can be conducted in an ‘outside trade area’, i.e., any place of production, collection, and aggregation of farmers’ produce including: (i) farm gates, (ii) factory premises, (iii) warehouses, (iv) silos, and (v) cold storages.
• Electronic trading: The Ordinance permits the electronic trading of scheduled farmers’ produce (agricultural produce regulated under any state APMC Act) in the specified trade area. An electronic trading and transaction platform may be set up to facilitate the direct and online buying and selling of such produce through electronic devices and internet. The following entities may establish and operate such platforms: (i) companies, partnership firms, or registered societies, having permanent account number under the Income Tax Act, 1961 or any other document notified by the central government, and (ii) a farmer producer organisation or agricultural cooperative society.
• Market fee abolished: The Ordinance prohibits state governments from levying any market fee, cess or levy on farmers, traders, and electronic trading platforms for trade of farmers’ produce conducted in an ‘outside trade area’.
Opposition:
• Loss of revenue to the states as the farmers will sell their agricultural produce beyond the APMC markets. The “mandi fees” collected are a great source 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 will put an end to the MSP based procurement system.
• It will lead to the destruction of the mandi system.

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020

Benefits:
• Farming agreement: The Ordinance provides for a farming agreement between a farmer and a buyer prior to the production or rearing of any farm produce. The minimum period of an agreement will be one crop season, or one production cycle of livestock. The maximum period is five years, unless the production cycle is more than five years.
• Pricing of farming produce: The price of farming produce should be mentioned in the agreement. For prices subjected to variation, a guaranteed price for the produce and a clear reference for any additional amount above the guaranteed price must be specified in the agreement. Further, the process of price determination must be mentioned in the agreement.
• Dispute Settlement: A farming agreement must provide for a conciliation board as well as a conciliation process for settlement of disputes. The Board should have a fair and balanced representation of parties to the agreement. At first, all disputes must be referred to the board for resolution. If the dispute remains unresolved by the Board after thirty days, parties may approach the Sub-divisional Magistrate for resolution. Parties will have a right to appeal to an Appellate Authority (presided by collector or additional collector) against decisions of the Magistrate. Both the Magistrate and Appellate Authority will be required to dispose of a dispute within thirty days from the receipt of application. The Magistrate or the Appellate Authority may impose certain penalties on the party contravening the agreement. However, no action can be taken against the agricultural land of farmer for recovery of any dues.
Opposition:
• The corporates and traders will have an upper hand and will be smart players as the farmers have weak negotiation skills to grab a fruitful deal for themselves.
• The small and marginal farmers may be deprived of sponsors.
• In case of disputes, the exporters, corporates, or any other sponsor will have an edge.
• It gives independence to corporates and not to farmers as there is no mention of MSP in the bill and the same is the reason for protest by the farmers.

The Essential Commodities (Amendment) Ordinance, 2020
Benefits:

• Regulation of food items: The Essential Commodities Act, 1955 empowers the central government to designate certain commodities (such as food items, fertilizers, and petroleum products) as essential commodities. The central government may regulate or prohibit the production, supply, distribution, trade, and commerce of such essential commodities. The Ordinance provides that the central government may regulate the supply of certain food items including cereals, pulses, potatoes, onions, edible oilseeds, and oils, only under extraordinary circumstances. These include: (i) war, (ii) famine, (iii) extraordinary price rise and (iv) natural calamity of grave nature.
• Stock limit: The Ordinance requires that imposition of any stock limit on agricultural produce must be based on price rise. A stock limit may be imposed only if there is: (i) a 100% increase in retail price of horticultural produce; and (ii) a 50% increase in the retail price of non-perishable agricultural food items. The increase will be calculated over the price prevailing immediately preceding twelve months, or the average retail price of the last five years, whichever is lower.
Opposition:

• The freedom to stock commodities will lead to exploitation as the big companies will charge exorbitant prices.
• The price limit set for “extraordinary circumstances” is so high that they are likely to be never triggered.

Conclusion:

The farmers are the soul of the nation .The passing of the bills is a step in the right direction providing a bigger platform to the farmers to get the desired price their agricultural product. It will bring revolutionary changes in the lives of the farmer.

The government said that the bills would transform the agriculture sector. It would also raise the farmers’ income, the Centre said. Further the government had also promised double farmers’ income by 2022 and the Centre said that the Bills will make the farmer independent of government controlled markets and fetch them a better price for their produce. The Bills propose to create a system in which the farmers and traders can sell their purchase outside the Mandis. Further it also encourage intra-state trade and this proposes to reduce the cost of transportation. Further the Bill formulates a framework on the agreements that enable farmers to engage with agri-business companies, retailers, exporters for service and sale of produce while giving the farmer access to modern technology. It also provides benefits for the small and marginal farmers with less than five hectares of land. The Bill also will remove items such as cereals and pulses form the list of essential commodities and attract FDI.

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