This Article is written by Vivek Verma student of SJMSOM, IIT Bombay.
Farmers from the states of Punjab, Haryana, and other parts of India have been seen undertaking strong protests against the three farm bills introduced by the Government of India. The President of India gave his assent on September 27 to the three ordinances in Agricultural Reform Bills earlier passed by the Parliament. These were meant to replace the ordinances issued in June 2020, with further enactment as a Bill after passing from both the Lower and the Upper house of the Parliament. There were several oppositions from the political parties against these Bills. Shiromani Akali Dal, a long-time BJP ally, had called this as “Anti-farmer” Bill. Let us understand these Bills in further detail.
In India, agricultural markets are mainly regulated by the Agricultural Produce Marketing Committee (APMC), which was set up to ensure fair-trade practices between buyers and sellers. These APMCs provide them infrastructure in the markets to facilitate the trade.
The Farm Bills were introduced with a motive to increase the opportunities for the farm economy to expand and farmers to enter into long-term contracts, intra-state and inter-state trading beyond APMCs, which will automatically increase the availability of the buyers, permits the bulk purchase of the farm produce by the buyers, stock limits for essential commodities and price assurances. The bills also sought to create trading areas free of middlemen and open the market to farmers.
The three farm bills are as follows:
FARM BILL 1
Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
- Allows the farmers to sell outside the APMCs regulated markets, i.e., freedom to indulge in intra-state or inter-state trade areas.
- It also prohibits the state governments from the collection of market cess, fee, or levy on farmers or traders under APMC Acts.
- The Central Governments have the full-fledged power to construct rules and regulations under the act.
- The Bill also allows the electronic trading of the farmer’s agricultural produce.
- May cause a burden to the local farmers who will not find enough demand at MSP against their produce in the local markets.
- As most of the farmers will be trading outside the markets, it might not be possible for the small farmers to bear such high transportation costs.
- These issues will lead them to sell their produce in local markets, even at a lower price than MSP.
- The future of the government e-trading portal i.e., e-NAM is uncertain.
FARM BILL 2
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020
- Supports the Contract Farming, i.e., the farmers and any buyer can undergo an agreement much before the actual production occurs with a minimum period of one crop cycle (one season) and a max period of up to 5 years (if the production cycle is not more than five years).
- The Bill makes the provisions for enabling contract farming in a legal framework not to get cheated at a later stage.
- The farmers are not equipped with sufficient resources in terms of knowledge and power, which makes them inferior in front of big corporate players.
- They might not negotiate their prices with big corporate players in the trading world and might suffer a deal at lower prices than expected.
- The Bill suggests a consensus of both the parties over the quality of the produce. After a certain time, the corporate players might demand a uniformity over the produce, which will burden the farmers who will not be able to meet their demands and lead to deal strike-off.
FARM BILL 3
Essential Commodities (Amendment) Bill, 2020
- Provides a regulation of supply and stock of certain agricultural products, which comes under the Essential Category.
- These are under the conditions of extraordinary causes such as inflation, natural calamities, etc.
- If there will be an upper limit on the stocking of the produce, the farmers will want to sell their produce at the last when demand is high, thereby leading to a surge in prices.
- The price hike may be as high as 100% for the horticulture produce and 50% for the non-perishable produce.
- The limit will not be an issue for those who will show their stock to sell in external markets as per their demands.
CAUSES OF THE NATIONWIDE PROTESTS
No priorities are given to Stakeholder’s consultation:
- The decision to pass the Bills with no appropriate consultation adds to the mistrust among varied stakeholders and State governments.
- The current Government may have waited for the Parliament session in the presence of all political parties before in-warding at a choice.
- These Bills allowing “trade zones” to come up beyond APMCs could weaken the APMCs and ultimate withdrawal of the MSP as apprehended by the farmers.
Unfavourable Market Conditions:
- The unfavourable market may cause input costs to rise, which would be unbearable for the farmers that the free-market based providing them remuneration seems useless.
- One example could be Bihar, where such laws were adopted in early 2006, and the farmers, on average, had received the prices much lower than the MSPs against their produce.
No Regulation of Non-APMC Mandis:
- While dealing with the big corporate players, whose sole purpose was the profit-making business, the famers might find it difficult to negotiate with them or satisfy all their fulfilments.
WHAT LIES AHEAD?
- The Government should listen the farmers so that they would not feel cheated by discussing the perfect plan of implementing Bills with their consensus.
- The Government should strengthen the Agricultural infrastructure by infusion of funds for the expansion of the APMC market system. It should invest in providing good roads to farmers for ease of transportation in the logistics system. It should also try to remove the trade cartels for the betterment of farmers.
- The sole power handling to the Central Government regarding centralisation should not be the focus. The Government should empower farmers through State Framers Commission for faster resolving any particular issues with the Government’s help.
- The Government should also work for the betterment of commission agents by modernising and facilitating them in providing value-added services.
- With the Government’s support in entrepreneurship, it is time for accelerating the research and academic excellence at the institute level, which could develop best in class technologies to support farmers and multiply their incomes.
- To enhance farm productivity, rather than rely on inorganic methods completely, the emphasis should be given to the organic methods. Soil health improvement should be the top priority of the Government.
- The farmers should be provided enough resources and knowledge on how to diversify into high-value crops. It will help bring India to the top global position.
- These reforms’ complete success will depend on the mutual consensus between the Government, corporate players, and the farmers. Only that will decide the result of the ongoing implementation.
- There is a big question on whether the big players are going to overpower the farmers against their will and exploit them for their rights by creating a situation of monopoly or duopoly-based market.
- With the pandemic going on, it’s not feasible for the farmers to proceed with their ongoing protest as it will only deteriorate their situation.
- The farmers are asking for their rights to be provided their produce at MSPs with its legal implementation. The Government should listen to them rather than shying away from undergoing any scrutiny.
- The political parties against this reform should have farmers’ cause as their motive rather than another political tactic for self-benefit.
- Without sturdy institutional arrangements, the free market might damage lakhs of unorganised small farmers, who are remarkably productive and shored up the economy even throughout this pandemic.
- ET Prime, Everything you need to know about the new farm laws farmers are protesting against, ET ONLINE (Jan 13, 2021, 10:15 AM IST), https://economictimes.indiatimes.com/news/economy/agriculture/everything-you-need-to-know-about-the-new-agriculture-bills-passed-in-loksabha/articleshow/78183539.cms?from=mdr
- Himanshu, It’s a no green signal from the farm world, THE HINDU (Sep. 21, 2020, 00:02 IST), https://www.thehindu.com/opinion/lead/its-a-no-green-signal-from-the-farm-world/article32655181.ece?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_syndication
- Priscilla Jebaraj, Who Gains and Who loses from the Farm Bills, THE HINDU (Sep. 27, 2020, 00:25 IST), https://www.thehindu.com/news/national/the-hindu-explains-who-gains-and-who-loses-from-the-farm-bills/article32705820.ece
- Times of India, New Farm Bill 2020: Who is protesting and Why, TIMESOFINDIA (Sep 20, 2020, 20:10 IST), https://timesofindia.indiatimes.com/india/new-farm-bill-2020-who-is-protesting-why/articleshow/78179693.cms