Farmer Bills 2020- Is it Anti or Pro Farmer?

The Authors, Ramit Rana, is Founding Partner at Step Next Legal-Advocates & Legal Consultants in New Delhi. He is a Practising Advocate at the Delhi High Court, and other lower Courts of Delhi and Gunjan Agarwal is a second-year law student pursuing LL.B. at the Jaipur National University.

Introduction

An industry that feeds you is an industry worth fighting for. India is a country where more than 70% of the population is engaged in agricultural activities but it is also a saddening fact that a hand that feeds the nation is entangled in the fetters of starvation. In recent days, agitation by farmers in various parts of the country can be observed. These are due to the introduction of two new bills i.e. “The Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020” and “The Farmer’s (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020” in the lower house by the Union Minister of Agriculture & Farmers’ Welfare, Rural Development & Panchayati Raj, Shri Narendra Singh Tomar on 14^th September 2020 to replace the ordinances promulgated on 5^th June 2020. Also, the other bill titled “The Essential Commodities (Amendment) Bill, 2020” has been passed.

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.

Pros and Cons

The introduction of the bill is based on the concept of “One India, One Agricultural Market”. It aims at opening the gates for farmers to the corporate world to create additional trading opportunities beyond the APMC market yards to help farmers to get remunerative prices due to additional competition.

On the other hand, the opposition is of the view 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 is also argued that the bills are ‘anti-farmer’ as farmers are being handed over to the capitalists who will encroach them and exploit them rather than empower.

The Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020

Benefits

1. 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.
2. No trade barriers it will facilitate interstate trading promotion the concept of ‘One Nation, One Market’.
3. It will increase competitiveness in the market ensuring better prices for their yield.
4. Engage in trade through electronic trading platforms, saving variously associated such as marketing and transportation.
5. A separate dispute resolution mechanism for the farmers to avoid pending court litigation.

Opposition

1. 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.
2. 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.
3. Eventually, it will put an end to the MSP based procurement system.
4. It will lead to the destruction of the mandi system.

The Farmer’s (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020

Benefits

1. Facilitating the farmer to enter into a direct or commercial agreement with the companies producing food products, wholesalers, retailers, and exporters, etc. This will eliminate the fear of exploitation and ensuring access to the global market.
2. Investment by the buyer in terms of infrastructure and technology to foster the production of food grains. This will reduce the cost and improve their income as access to modern technology will be achieved.
3. After the terms of the contract are decided the buyer will provide the means to yield a good crop.
4. The contract will only be for agricultural produce and not for the agricultural land. The farmer will be the owner and can avail loan and credit facilities from financial institutions if the need be.
5. Crops under the agreement shall be exempted from the rules and laws relating to the sale of agricultural produce and the provisions of the Essential Commodities Act.

Opposition

1. 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.
2. The small and marginal farmers may be deprived of sponsors.
3. In case of disputes, the exporters, corporates, or any other sponsor will have an edge.
4. 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) Bill, 2020

Benefits

1. Enables private investment in the agricultural sector. This will help to provide a pool of funds to the farmers to facilitate the production of crops.
2. Help both farmer and consumer to bring price stability
3. Removal of cereals, pulses, oilseeds, onion, and potatoes from the essential commodities to do away with the imposition of stock holding limits. It allows the government to take back control if there are extreme situations like extraordinary price rise, war, famine, or natural calamities of severe nature.
4. It will encourage private sector investment in cold storage and pave ways for modernizing the supply chain.
5. Removal of stock limits, ensuring a larger market for farmers attracting investments in infrastructure and transportation due to fewer government restrictions.

Opposition

1. The freedom to stock commodities will lead to exploitation as the big companies will charge exorbitant prices.
2. 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 and their growth and upliftment is the foremost duty to be taken care of by the government. 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 reforms will accelerate agricultural growth through private sector investment in constructing agricultural infrastructure and supply chains for Indian farm produce in national global markets, generate employment opportunities, and strengthen the economy. Farmers will be freed from the clutches of selling their produce at designated places. The procurement of MSP will continue and ‘mandis’ established under state laws will also continue to operate. It will empower the farmers and foster their growth and development in the country reshaping the Indian economy.