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Farm Bill, 2020

The 3 bills named as:

  1. The farmers produce trade and commerce (promotion and facilitation) bill, 2020.
  2. The farmers (empowerment and protection) agreement on price assurance and farm service bill, 2020.
  3. The essential commodities (amendment) bill, 2020.

1st bill allows barriers free intra and interstate trade of farm produce and previously, the farm produce was sold at notified wholesale markets or mandi's run by agricultural produce market committee (APMC)

Each agricultural produce market committee has licensed middlemen who used to buy from farmers as the price set in the auction before selling it to the international buyers like retailers and big traders.

New system- Now the changes has been done by the government and now farmers are having the option to eliminate the middlemen to whom farmers used sold their produce. They can eliminate and can sell directly to the international buyers at price to be agreed between them.

Now farmers group are protesting because farmers group are worried that this exposes them to corporate and who have more bargaining power can sell at higher price and some are having more resources as compare to small or marginal farmers as it will benefit more to big farmers those are having lands resources and bargaining power. As 85% of farmers in India own less than two hectares of land and it will be very difficult for them to negotiate directly with the large scale buyers.

Farmer's objections:

  1. The alternate private mandi's will lead to ultimate closure of existing APMC mandi's
  2. If APMC get closed so farmers will not have any option to sell their produce then they have to sell it in private mandi's only.
  3. No taxes on private mandi's will be there and as of now 3% taxes are there in APMC for buying and selling as due to no taxes in private mandi's so private companies will not go through APMC.
  4. Removal of geographical restriction are there and small farmer may find it difficult to avail potentially better prices at markets because of constraints of travel and storage.
  5. There was no restrictions on farmers to sell elsewhere earlier too
State government concern regarding this is that if private buyer starts purchasing directly from the farmers so government will lose out of taxes that are charges at mandi's and the potential scrapping of the mandi's will endanger the jobs of millions of workers who work there.

2ND Bill contract farming

The second bill will allow farmers to enter into the agreement with agree firms, exporter or large scale buyer to produce the crops for a pre agreed price.

Now the farmers are worried for this because they believe that the MSP (minimum support price) is the price at which government purchases the crop from farmers directly and now MSP will be removed and there will be no government control on the prices.

The demand of farmers is to link MSP to the contract prices.

3rd Bill Hoardings

The essential commodities (amendment) bill proposes to allow economic agents to stock food articles freely without the fear of being prosecuted for hoarding but the small farmers are not having that means and warehouses to store their produced items into it.

The unlimited stocking will lead to artificial price fluctuation and low prices for farmers after harvest.

Demands of farmers organizations:

  • The act is more favorable towards the companies and it is not legally empowering the farmers.
  • Farmers want to strengthen the MSP and to be made a legal right.
  • Currently 6% farmers can get benefit of MSP's as procurement of crop is not done for all the crops for which MSP has been declared by the government.
  • In APMC some reforms are needed but nor its removal.
  • The middlemen should not go away.
  • Investment in agricultural sector must be from government, not private sector.
  • Written by: Saksham Ahlawat - B.A.LL.B (hons) Chandigarh University, Gharuan, Mohali.

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