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FARM BILL 2020

By

Shrishyly. V, II year of B.Com., LL.B. from BMS College of Law


Introduction

In a big machine, even a small bolt has its role to perform. Without that bolt support, the entire machine cannot perform effectively and efficiently. Similarly in a country, every single division of a sector has its importance.


Even in today’s Indian economy, agriculture is contributing nearly 18% of total GDP and 10% of overall exports. Since 50% of Indian population is dependent upon farming – Farmers can be said as the backbone of Indian economy.


As soon as we hear the word farmers the first thing which strikes our mind is hard work and dedication. A farmer is a person who feeds the whole country, himself and his family with the less amount of income even after working very hard. Government has also been encouraging the farmers by introducing certain policies, schemes and supporting them by providing loans and subsidies.

Recently three farmer’s bills have been passed by the central government which has drawn farmers into protesting. Let us further discuss this in brief.


Concept

On 26th November 2020, there were three farm bills introduced by the Rajya Sabha namely:

1. The Farmers’ Produce Trade and Commerce(Promotion and Facilitation) Bill, 2020;

2. The Farmers’(Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020;

3. Essential Commodities (Amendment) Bill, 2020.

(The above mentioned first two bills are newly introduced and the last bill has been modified.)


1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020

This bill says that farmers are given the freedom to trade within and outside the state or Mandior Agricultural Produce Market Committee (APMC) Yard. As agriculture is the state revenue few states like Punjab and Haryana could lose a big source of revenue. This bill provides barrier-free trade for farmers selling their goods outside the state; the government does not impose a tax for the same. This bill is usually beneficial for big farmers who can directly sell their goods to private companies since they have multiple choices. But the farmer’s income depends upon the market situation. Here the government does not intervene and provide subsidies to them. On other hand, this will hardly make a difference to the small farmers because they are anyhow selling goods in mandi and they don’t have better incentive or transportation for going outside the state and selling the goods.


2. The Farmers’(Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020

This bill will allow the farmers to get into the agreement with private companies for empowering and protecting the general interest of the farmers. Even though the farmer is given the freedom to sign an agreement with any business owner, at last farmers are the loser since the private company has high chances of cheating the farmers maybe by paying less money for certain commodities etc. To prevent this exploitation this bill provides a dispute settlement mechanism between the farmer and the buyer by an established authority. Here, the farmer is burdened through following the strict contract with the buyer. The farmer will be compelled by certain conditions like providing quality goods at the fixed delivery requirements by the buyer at the agreed price.


This bill wants to frame a legal agreement between the farmer and the corporate investors with certain remuneration but when we look into it though it attracts the private investors the farmers are being dominated by legal clauses.


3. The Essential Commodities (Amendment) Bill, 2020

This bill has been modified by the existing essential commodities bill. So here, the essential commodities bill means the prices of the essential commodities are controlled by the government for protecting the general interest of the common people. If ever there is black marketing of essential commodities like medicine, fuel etc to bring up artificial demand in the market which naturally increase the price of such commodities by considering this scenario the central government will bring such commodities under the essential commodities bill with fixing the affordable price on it. The modification made by the central government in recent Essential Commodities (Amended) Bill 2020 is to remove certain commodities (like cereals, pulses, potato, onion, oils etc.) under the bill and include it and control the price whenever there is the exclusive situation like natural calamities, war, increase in price (Non-perishable items up to 50% and perishable items up to 100%) only. Though this bill will boost the farmers' income there is a high chance of hoarding and black marketing which leads to the monopoly on prices of certain commodities. The central government interferes with the state market by setting certain limits for the price where the fluctuation of prices must be within a certain extent. So here, ultimately it affects the income of the farmer.


Three bills – Three benefits to the farmers

1. Freedom to sell the product to anyone and anywhere(even outside the APMC yard), it automatically defeats the monopoly cartel at the APMC yard.


2. Freedom to store the inventory even which are controlled by the stocking limits by Emirates Securities and Commodities Authority (ESCA).


3. Freedom to make agreements with the private businessmen and transfer the risk on them even before the sale of the products on the deal made on it.


Even though the farmers are getting benefits, why are they even protesting for it?

The farmers of states like Haryana, Punjab and Uttar Pradesh are unhappy by these three bills and started protesting for the same.

1. Farmers fear on Minimum Support Price (MSP) on crops

2. The said bill has not even confirmed whether MSP implementation is the guarantee

3. The bills will interfere with the mandi system / APMC Yard system of selling produce

4. No provisions set forth about MSP

5. No information and clarity about the price for which the product must be sold either “MSP” or “Procurement”

6. In case if farmers sell their produce outside the state or mandis then they may get price lesser than the MSP for their crops

7. By this, it may put an end to the MSP system

8. If farmers sell their commodities outside the state, then eventually the state will lose huge revenue

9. In the contract-based system of selling there is a high chance of disputes and exploitation of the farmers since there are a lot of private business investors involved in it

10. These bills may be useful for big farmers rather than small farmers

11. The bills do not confirm the increase in income of the farmers

12. Trading with the contract system, there is monopoly towards farmers and they become slaves in their hands.


Conclusion

The three farm bills are introduced by the government for the agriculture development but unfortunately if implemented it fails for the same because even though farmers are set free to trade with whomever they wanted to there is less chance of getting expected income, private companies usually would like to make a contract with big farmers then what will be the situation of small farmers? If considering this situation, small farmers go out of the state and sell the product then there will be no applicability of the MSP system and they would rather get less income compared to the mandi system.


The bills are incompletely introduced since they won’t confirm the implementation of MSP system properly this has led farmers into a dilemma whether to get into the contract or sell the produce in mandis because they don’t know if they sell in mandis the MSP system still be applicable or not.

Being introduced titled “Farm Bill 2020”, these three bills are nowhere actually on the positive side for farmers. So the farmers are angry on this part and started protesting for justice. To overcome this situation;


1. The government can include ordinance with the involvement of both MSP and procurement system in the new bill


2. To eradicate the fear of farmers the government can eliminate middlemen for easy selling


3. The government may provide incentives and loans with consideration of affordability of the farmers


4. The policy says there is the involvement of the MSP system on crops but yet the decision is not clear in the implication of the same


5. The government may help farmers by increasing storage facilities, electricity and food facilities etc.


Endnotes :

https://indianexpress.com/article/india/farmers-protest-live-updates-punjab-haryana-msp-narendra-singh-tomar-bjp-7108028/

https://www.timesnownews.com/india/article/what-is-the-farm-bill-and-why-are-farmers-protesting-against-it/689215

https://indianexpress.com/article/explained/government-farmer-talks-deadlock-explained-7106698/lite/#aoh=16083013293793&amp_ct=1608301514471&referrer=https%3A%2F%2Fwww.google.com&amp_tf=From%20%251%24s

https://www.thehindu.com/news/national/the-hindu-explains-who-gains-and-who-loses-from-the-farm-bills/article32705820.ece