There’s much hue and cry going on for the recently introduced Agriculture Bills. Yesterday, these bills got President’s assent. But why are people protesting against these bills, and most importantly, who is protesting against these bills?
Which Bills Have Been Introduced?
These bills were initially promulgated as an Ordinance on June 5th, 2020, as a part of the Agriculture Reforms. The constitution provides that the ordinances are required to be approved within six weeks of commencement of the next Parliament Session.
Continuing with the constitutional provision, on September 17, the Government brought three (legislations) bills on farmers.
– The Farmers’ Produce Trade and Commerce (Promotion & Facilities) Bill
– The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill
– The Essential Commodities (Amendment) Bill
What Are The Provisions of These Bills?
Let’s understand the provisions of each of these bills.
The Farmers’ Produce Trade and Commerce (Promotion & Facilities) Bill
According to this bill, the farmer will be able to sell their produce without any trade or tax barrier within state or intrastate. It means farmers will have a choice to sell their produce in any Mandi based on their comfort.
Before this bill, APMC Act was in place. APMC Act mandated farmers to sell their produce only in the designated APMC Mandis where agents charged them a fee for providing a place.
Provisions for E-platform are also introduced where a farmer or group of farmers can register to sell their produce, where he can be both producer and trader, the only requirement is a Permanent Account No. under Income Tax Act 1961 or any other document notified by the union government.
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill
Consider this example, Pepisco needs some amount of Potatoes (say 10 Kg) to produce Lays or any other chips. Now, instead of waiting for the market, the Pepsico company enters into a pre-purchase agreement (or a Contract) with a set of farmers. They say produce 10 kg of potatoes and we will pay you X amount. This is also known as Contract Farming.
This pre-purchase agreement eliminates intermediaries and the commission they earn. So, farmers can get the full price for their produce directly from the company. Not only this, this bill also mandates that the contract must provide the necessary tools to the farmers.
Previously farmers did not have the freedom to trade with private firms or with the state, except in Punjab and Haryana. Even in these states, the provisions for Contract Farming were vague.
The Essential Commodities (Amendment) Bill
This bill grants the Central Government the authority to regulate the supply of certain food items only under certain conditions (war, famine, etc) and impose stock limit only if there is a sharp increase in retail price.
This bill will remove cereals, pulses, oilseeds, onion, potatoes from the list of Essential Commodities. It means that there won’t be any limit imposed on the stocks. This will attract FDI and private investments.
Has This Been Done Before?
In 2006, the Bihar government repealed the APMC Act to attract private investors but failed due to a lack of marketing infrastructure. Bihar, Kerala, Manipur and certain UTs don’t have APMC. Even Madhya Pradesh has no commission agents.
In 2013, fruits and vegetables were removed from APMC by some states, which didn’t lead to any conflict or reduced to the sale, but on the contrary, it leads to expansion and extension to a wider level.
It should be noted that the ordinances do not repeal the existing APMC law but limit the regulation of APMC to some extent. Ramesh Chand, a member of NITI Aayog (Agriculture) says, “Competition will take care for the interest of stakeholders.”
What is This Issue About MSP?
MSP stands for Minimum Support Price. It is announced for certain crops by the Government of India.
In case the market price for the crop falls below the announced minimum price due to any reason, government agencies purchase the entire quantity offered by the farmers at the announced minimum price. It insures farmers from distress selling.
The bills passed in the Parliament doesn’t effect MSP in any way. MSP is decided through an administrative decision, it has nothing to do with APMC.
These bills will provide more protection to farmers in selling their produce at multiple options. Entering a contract with proper provisions and settle a dispute easily under 3 level dispute settlement mechanism, The conciliation ward, Sub Divisional Magistrate and Appellate Authority.
Who is Protesting?
There are four set of people who are protesting against the Farm Bills.
We have seen the role of middlemen since medieval times. These middlemen were often the agent of State or the Center and were tasked with exploiting the farmers to generate maximum revenue.
Now the we have understood the role of Stakeholders, it is important to note that some of them have big political influence and act as a vote bank.
State Governments are protesting on some legal and political ground that we will discuss in the next section.
Most of the farmers are protesting because they have been told that MSP will be removed, there won’t be any government support and corporate companies will exploit them. Farmers are also protesting because although they have the freedom to choose who to sell, they might not have sufficient knowledge to negotiate with a private firm. This can end up in lower prices for farmers.
Why State Governments are Protesting?
The legislative powers of the Government, i.e. the authority to create policy or introduce a bill, has been divided in three lists: Union List, State List, and Concurrent List.
As the names suggests, Parliament can make laws on the items mentioned in the Union List, State can make laws on the items mentioned in the State List, and either Parliament or the State can make laws on the items mentioned in the concurrent list.
Agriculture is an item mentioned in the State List. So, how the Central Government was able to make a law? The answer lies in the Entry no. 33 & 34 of the Concurrent List.
Entry number 33: Trade and commerce in, and the production, supply, and distribution of,-
(a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products;
(b) foodstuffs, including edible oilseeds and oils;
(c) cattle fodder, including oilcake and other concentrates;
(d) raw cotton, whether ginned or unginned, and cotton seed; and
(e) raw jute.
Entry number 34: Price control
The states are protesting because they would face revenue loss as APMC Mandis will become less efficient.
What is the Way Forward?
In the final words, I would like to conclude that these bills will prove to be great support to the farmers. For instance, Milk production in 2018 was 187.7 billion tons. As milk production is generally controlled by an individual, or a firm, or a cooperative society, they have the freedom to choose their market. They naturally select the market that provides maximum profit, hence, increasing the condition of the farmer.
The Government should come out to open to explain the benefits of these bills. Also, sufficient steps should be taken to address the farmers’ concerns.
“ये मान लीजिए की आज जीवन का सबसे खूबसूरत दिन है।”.
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