Introduction
It was in September 2020 that three controversial farm bills were presented in the parliament, and on September 27th, the then president of India Ram Nath Kovind gave assent to it. The bill brought a large number of farmers out on the streets, especially from the sates of Punjab, Haryana and Uttar Pradesh who showed their discontentment regarding the issues of MSP’s.
This article would revisit the three farm bills to enlighten the people who know a very little about the topic and for people who would want to brush up their knowledge about the subject.
APMC’s (Agricultural Produce Marketing Committee)
The APMC’s are marketing systems which are regulated by the State Government to ensure that the farmers get reasonable prices for their agricultural produce and the prices don’t skyrocket when the goods reach the retail market. At present, there are about 2477 principal regulated markets based on geography (the APMCs) and 4843 sub-market yards regulated by the respective APMCs in India.
The standing committee on agriculture (2018-2019) observations underscored the need for reforms in the APMC systems. Firstly, the issue of cartelization of a very few traders defeats the whole purpose of APMC’s as the reduced competition would lead to farmers getting lesser price for their produce. And secondly, the unnecessary deductions in the form of commissions and market fees.
THE THREE ACTS
The three bills were originally introduced as ordinances and became statutes after getting president’s assent. The three acts were as follows:
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020:
This statute ensured the inter-state and intra-state trade which basically meant that the farmers could sell their produce without any geographical restraints.
This statute also allows farmers to sell their produce through online trading and 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.
This statute also placed an embargo on the state government levying any market fee, cess or any commission fee on farmers.
Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020:
This bill provided farmers to enter into private contracts with buyers before production or rearing of commodities.
According to this bill, the prices of the produce must be mentioned in the agreement, there should be a clear reference to additional amount that might be incurred during the produce. The agreement must also provide for a conciliation board and a conciliation procedure for dispute settlement.
Essential Commodities (Amendment) Act, 2020:
This statute removed cereals, pulses, oilseeds, edible oils, onions and potatoes from the list of essential commodities. The above products may be regulated only under extraordinary circumstances which may include war, famine, extraordinary price rise and natural calamity of grave nature.
THE PERSPECTIVES
While the central government heralded it as a landmark reform in the agricultural sector, the farmer community opposed it fervently.
The main concern that farmers have put forward about the statute is its impinging effect on minimum support price (MSP).
The farmers fear that once they start selling their produce to private companies, it would result in closing of APMC mandis which could have given them good price for their produce if they were not satisfied with the price given by private counterparts.
The farmers also fear that after the closing of APMC mandis, they would be at the whims and fancies of the private companies. This fear could be even better understood when one knows that 85% of Indian farmers have small (1-2 hectares) and marginal (with holdings of less than one hectare) land holdings.
Though, the central government has termed these statutes as reformative and that these statues would foster a competitive environment, promote agricultural entrepreneurship that would benefit agricultural sector in general.
CONCLUSION
The standoff between the central government and protesting farmers have created a situation of stalemate. The major organisations of farmer community have called for strikes in states of Punjab and Haryana and have called for ‘Delhi Chalo’ march. As of 18th February 2024, the fourth round of talks between Union minister Piyush Goyal, Arjun Munda and Nityanand Rai is yet to commence.
We can observe from the report of standing committee on agriculture (2018-2019) that the dire necessity is reformation in APMC system and not completely abolishing them. As the majority of the farmers in India fall under small and marginal land holding, state intervention is the need of the hour.