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The Constitutional Validity of the Farm Laws (2020) in light of the Indian Farmers' Protest of 2020-21

The 2020-2021 Farmers' protest is an ongoing protest by the farmers of India against the passing of the three farm Acts (Formerly Bills), which were passed by the Parliament of India on the 27th of September, 2020. These Acts, namely:
Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act; Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act ; Essential Commodities (Amendment) Act have been the subject of a long debate as these Acts have described as Anti-Farmers' which would lead the farmers to be left at the 'Mercy of the Capitalists'. Soon after the Acts were introduced, a massive number of Farmers' Unions have begun holding protests mostly in Punjab and Haryana. On 30th of November 2020, more than 250000 had been converging at numerous border points around the National Capital Territory.

The Farmers' Union and their representatives have a single demand, which is, the total scrapping of the three Farms Acts effective immediately and have also rejected the stay order by the Supreme Court of India and the appointment of a Supreme Court appointed Committee. It is to be noted that till now, a total of nine rounds of dialogues between the Unions and the Government have taken place and not a single one of them has proved conclusive. However, the Government still remains adamant regarding the implementation of these Acts and so are the Farmers of the Nation, against them.

The Farm Acts Explained:
In September 2020, the President of India provided his assent to the the Farm Bills and subsequent crucial amendments which were previously passed by the Parliament of India. These Acts are namely:
  1. Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act.
  2. Farmers' (Empowerment and Protection) Agreement on Price Assurance Act.
  3. Essential Commodities (Amendment) Act.
The Farmers' Produce Trade and Commerce (Promotion and Facilitation Act, 2020.

Foundation: On 5th of June, 2020, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 was promulgated by the Union Cabinet.

Act:
It creates a national framework for contract farming through an agreement between a farmer and a buyer before the production or rearing of any farm produces.

Provisions:
  1. Farming Agreement:
    The Act provides for a farming agreement between a farmer and a buyer prior to the production or rearing of any farm produce. The 'price' in the Act refers to a 'pre-agreed' price between the Farmer and the prospective Buyer.
     
  2. Minimum Period of Farming Agreement:
    The minimum period of the farming agreement shall be for one crop season or one production cycle of livestock.
     
  3. Maximum Period of Farming Agreement:
    The maximum period of the farming agreement shall be five years. It also states that if the production cycle of any farming produce is longer and may go beyond five years, the maximum period of farming agreement may be mutually decided by the farmer and the buyer and explicitly mentioned in the farming agreement.
     
  4. Pricing of Farming Produce:
    The pricing of farming produce and the process of price determination should be mentioned in the agreement. For prices subjected to variation, a guaranteed price for the produce and a clear reference for any additional amount above the guaranteed price must be specified in the agreement.
     
  5. Settlement of Dispute:
    The Act provides for a three-level dispute settlement mechanism - Conciliation Board, Sub-Divisional Magistrate and Appellate Authority.

Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020

Foundation:
On 5th June 2020, the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 was promulgated by the Union Cabinet.

Act:
It permits Intra and Inter-state trade of farmers' produce beyond the physical premises of Agricultural Produce Market Committee (APMC) markets and other markets notified under the state APMC Acts.

Provisions:
  1. Trade of Farmers' Produce:
    The Act allows the farmers to trade outside specific trade areas such as farm gates, factory premises, cold storages, and so on. Previously, it could only be done in the APMC (Agricultural Produce Market Committee) yards or Mandis.
     
  2. Alternative Trading Channels:
    It supposedly facilitates 'profitable' prices for the farmers via alternative trading channels to remove barriers and promote Intra-State and Inter-State trade of agriculture produce.
     
  3. Electronic Trading:
    Additionally, it allows the electronic trading of scheduled farmers' produce (agricultural produce regulated under any state APMC Act) in the specified trade area. It will also promote direct and online buying and selling of the agricultural produce via electronic devices and the internet.
     
  4. Market Fee Scrapped:
    As per the Act, the State Governments are prohibited from levying any market fee or cess on farmers, traders and electronic trading platforms for trading farmers' produce in an 'outside trade area'.

Essential Commodities (Amendment) Act, 2020
Foundation: On 5 June 2020, the Essential Commodities (Amendment) Ordinance, 2020 was promulgated by the Union Cabinet.
Act: It is an act of Indian Parliament which was enacted in 1955 to ensure the delivery of certain commodities or products, the supply of which if obstructed owing to hoarding or black-marketing would affect the normal life of the people. This includes foodstuff, drugs, fuel (petroleum products) etc.

Powers of the Central Government:
  1. The Government of India will regulate the production, supply, and distribution of a whole host of commodities it declares essential in order to make them available to consumers at fair prices.
  2. The Government can also fix the MRP (Maximum Retail Price) of any packaged product that it declares an 'essential commodity'.
  3. The Centre may add commodities in this list when the need arises and may take them off the list once the situation improves.
  4. If a certain commodity is in short supply and its price is spiking, the Government can notify stock-holding limits on it for a specified period.

Powers of the State Government:
The respective State Governments can opt for not imposing any restrictions notified by the Central Government but if the restrictions are imposed, traders will have to immediately sell any stocks held beyond the certified quantity into the market. This will be done with a view to improve supplies and bring down prices.

Amendment:
With the amendment in the Act, the Government of India will list certain commodities as essential to regulate their supply and prices only in cases of war, famine, extraordinary price rises, or natural calamities. The commodities that have been deregulated are food items, including cereals, pulses, potato, onion, edible oilseeds, and oils.

Stock Limit:
As per the amendment, the imposition of any stock limit on agricultural produce will be based on price rise and can only be imposed if there's a 100% increase in the retail price of horticultural produce and a 50% increase in the retail price of non-perishable agricultural food items.

Calculation:
The increase will be calculated over the price prevailing immediately preceding twelve months, or the average retail price of the last five years, whichever is lower.

Causes behind the Protest by Farmers:
Although the Central Government has been repeatedly assuring the Farmers that the three Farm Acts are for the greater good and benefit of the Farmers and is likely to step up the game in terms of technology and equipment the agricultural sector, the farmers are not so convinced about the fact the Acts are to provide any benefit. Instead they believe that the Acts and the subsequent benefits used in the Acts are vague, improper and wholly impractical. Some of the major reasons of dissent against the Bills by the Farmers are as follows:

The Farmer Unions say that the Acts are going to dismantle the Minimum Support Price Mechanism and predict that over a period of time, corporate houses are going to take control over the crop prices and farmers will be getting much less than the current MSPs for their crops.

Farmers are concerned that with the virtual dismantling of the 'Mandi' system is going to result in a huge uncertainty with regard to assured prices of their crops. Also, the commission agents, are going to go out of business due to the same reason.

The Farmers are also against the levying of cess on private mandis. They believe that the creation of private mandis are going to consequentially end the whole system of government markets, intermediary systems and the APMCs. As a result, private players are going to overtake markets and will procure farm produce at nominal rates.

It is also been noticed that the Acts do not expressly specify 'Minimum Support Price' it only says that the contract will be at a 'pre-agreed price' which becomes a concern for farmers as they believe there is absolutely no guarantee that it will be implemented in a concrete manner and they will be forced to accept whatever rates which are offered to them. The farmers and their unions want an MSP Bill too, for the same reason.

The Acts are rejected by the farmers as the Acts do not seek to regulate the traders. As per the Acts any person holding a PAN card can procure farm produces at acquisitive prices and hoard them. The Farmers believe that the Central Government is not ready to take responsibility for the same.

The Tumultuous history of contract farming is also an issue here. Contract Farming also means there can be situations of non-payment by private companies for the produce put forward by farmers by making up ambiguous reasons such as 'substandard quality of produce'. A significant number of non-procurement of farm produces have been in registered in the past citing 'substandard quality' eventually pushing farmers into a debt-trap. As a result of which farmers are forced to sell off their lands.

The Right to Protest under the Indian Constitution – Rights of the Protesting Farmers.

In protesting against the actions, policies, declarations etc. of state, government or any other entity, a party or a society, or even a person is typically to display their disapproval or resentment. The key driving force of the movement is political waves, which indicate that the collective organization of the population addresses its problems and takes measures to solve them. Protests typically operate in two ways, one, is that they allow a specific group or culture to illustrate its differences with the politics in question and the other is that they help the government to recognise the gaps and change their policies and behaviour.

Right to Protest: Constitutional Provisions
  • The Right to protest peacefully is enshrined in the Indian Constitution—Article 19(1) (a) guarantees the freedom of speech and expression; Article 19(1) (b) assures citizens the right to assemble peaceably and without arms.
  • Article 19(2) imposes 'reasonable restrictions' on the right to assemble peaceably and without arms.
These reasonable restrictions are imposed in the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality or in relation to contempt of court, defamation or incitement to an offence.

Right to Free Speech and Peaceful Assembly.
  • The right to freedom of speech and expression is a free expression of opinion on the government's actions.
  • For example, to jointly challenge government decisions and even try, peacefully and lawfully, to displace the government, not only to check abuse of power, but to wrest power, the right to association is needed to create associations for political purposes.
  • The freedom to peacefully assemble helps political parties and civil society organizations, such as university student groups, by demonstration, unrest and public meetings to challenge and object to government policies and to initiate ongoing protest movements.
  • The right of citizens to protest and peacefully gather without arms is a key aspect of India's democracy. While it is also the government's obligation to protect civilians from violent protests, the people engaging in the protest need to be mindful of their behaviour.
  • The right to protest is one of the basic principles on which democracy survives and thrives. But when the protest turns violent, as seen in some places in recent protests, it defeats the very purpose of the protest. While enjoying rights, one must carry out one's own duties and responsibilities in a democratic society.
  • Public protests are the characteristic of a free, democratic society, whose rationale allows people to hear their voice after proper debate and consultation and to take decisions. The right to freedom of speech, association and peaceful assembly is key to engage in public protest.

Requisites of holding a Protest in India:
  • It is important to remember that all protests are legal only if they are non-violent and carried out with appropriate permission. "Fundamental duties enshrined in the Constitution require that the rule of law be observed and that public property is not destroyed," Enumerated in Article 51A, the Constitution makes it a fundamental duty of every citizen to safeguard public property and to abjure violence.
     
  • There are certain permissions which need to be obtained before organizing and holding a protest at any site for any reason.
These are as follows:
  1. The local laws of the state must be referred to beforehand before the protest. Since 'Law and Order' is a State subject, the permissions to organise a protest will vary from state to state.
  2. The procurement of a Police Permit and a No-Objection Certificate (NOC) from the police. In case the police feels that the protest rally or demonstration will lead to unrest and go against public order, permission can be denied.
  3. All the details of the protest in the petition must be submitted to the police.
  4. These must include the reason for the protest, its date and duration, the number of people expected to participate, and the route that the protestors will undertake. The protestors must also remember to include their names, addresses, and phone numbers.
  5. The documents that must be furnished include Proof of Identity, Proof of Residence, a Photograph, and an Affidavit.

The Loopholes in the Farm Acts:
  1. The above benefits in compliance with the Act would contribute to the corporatisation of farming. As the Act does not specify a fixed MSP, there could be insufficient demand from local farmers for its products.
  2. The majority of farmers are small landowners and do not have the means to transport their produce to large distances. In the end, their products will be sold at a price below the MSP in the local market.
  3. The main concern with contract farming is the negotiating power of the parties concerned. Corporates or rich sponsors may not necessarily pay a fair price to farmers for their produce due to the lack of the ability of farmers to negotiate fairly or to afford any kind of long-standing legal proceeding.
  4. In a long term practical sense, the entire farming industry will fall into the hands of the capitalists who will exploit the land and the farmers for their own private needs, which will have a terrible impact on the country's agro-ecological diversity.
  5. In order to leverage private and foreign direct investment in the agricultural sector, changes have been introduced in the regulation of stock limits. In addition, the Stock Limit Regulation is not going to apply to the value chain participants in agricultural agreements, if their stock limits remain within their installed capacity. This would also legitimize hoarding with the government being without any information as to where stocks are located and owned.
  6. A parallel market will be established by the present law overcoming the requirements of the current APMC for which the rules are entirely different. APMCs are a market in which the traders need a license and pay a specified amount of tax. Similarly, with the entry of private sponsors, the state government will lose its capacity to control the trade in goods. In addition, this will cause the mandis to collapse.
  7. These Acts are not formed with proper consultation with the actual stakeholders i.e. the farmers. They do not provide farmers with guaranteed prices (MSPs) under the supervision of private players. In the same way, transactions and prices do not empower the state government to regulate the market.

Author's legal suggestions for a constructive outcome of the present situation:
India is an agricultural country. With more than 80 percent of the total population engaged in agriculture directly or otherwise in agri-business projects. With the protest showing no apparent end and the government being sternly adamant about not repealing the laws in addition to the inconclusive talks between the Farmers' Union and the government, there are some concrete steps which the government can undertake to make sure that the gap between good legislation and good implementation.

Some of those steps are as follows:
  • Indian agriculture is subject to the twin problems of floods and drought at the same time and, in such circumstances, there is a need to protect farmers' incomes. Legislation to protect farmers from crop damage and losses caused by drought, floods and cyclones and to ensure income from such calamities through State aid is imperative in India.
     
  • It is necessary to realize the critical nature of pay prices for farmers and establish a statutory framework to guarantee them.
     
  • Legal support for MSP as a farmer's right could help to bring about confidence in government policies. The Swaminathan Committee called for the MSP to be raised by 50% above production costs.
     
  • The reinforcement of the current structure is required instead of slowly and indirectly dismantling the APMC regime. Reforms to develop APMC infrastructure should be enforced in lieu of the small and outlying farmers who are unable to attract companies.

  • Better road connections, transport facilities, air-conditioned storage facilities and power supply are also a requirement for major agricultural improvements. Without realistic investments in agricultural infrastructure, market-based agriculture is futile. Furthermore, most farmers cannot make substantial contributions to market-oriented agriculture because their holdings and production are too limited.

  • The situation in the State of Punjab, where farmer suicides are rising at an alarming rate, attaches importance to state intervention to prevent private companies from exploiting, ensuring that their produce is priced equally and reduce debt.

  • A dialogue with the concerned stakeholders is one of the most critical steps which has to be taken. Timely, wide-ranging consultations to tackle all the Farmer Bill issues are a required measure to be compatible with the spirit of democracy and federalism of the country.

  • Needless to say, it is urgent and necessary to assess a plausible strategy regarding these Acts. The most pressing issues at the present time, instead of proposing new plans to draw new investors, are hunger among farmers, debt trapping them, ensuring a fair remuneration for foodstuffs and preserving the ecological balance. This may look like a job well said than well done, but it is the truth, and one way or another, these issues will have to be addressed along with proper legal mechanisms to make them function.

Conclusion:

Truth be told, Agrarian distress has been persistent in India due to a number of factors including low productivity, lack of storage and transport facilities, heavy indebtedness and fragmented landholdings. Subjecting the fate of farmers to the vagaries of market forces cannot be the only way to uplift the agriculture sector. Stability is required in the agricultural sector, while the new model would only add to pre-existing price uncertainty through market forces.

The farmer never gets to determine the price of his agricultural produce be it in the previously established system or the new system. The price is always agreed on by someone else and is subjected to drastic fluctuations. The apprehension of the parties concerned and the reassessment of the current policies are urgently needed Experience from other nations has revealed that corporatization of agriculture could further instigate the depression of the farmers.

Replacement of one flawed model with another flawed model is not the solution but critics believe that there is a need to plug the loopholes instead of introducing a new system altogether. A similar system has already been introduced in America and some European countries where it has failed miserably, we can only hope this does not happen in India and government will not repeat those mistakes.

Right now, there can be two scenarios which are, farmers' revenue doubles, as the government has said, or their circumstances worsen, as the farmers fear. While the Government's purpose is praiseworthy, we will be able to see the results only after a few years. History shall be the best of Judges.

Award Winning Article Is Written By: Mr.Aabir Shoaib, BBA+LL.B, Chandigarh University
Awarded certificate of Excellence
Authentication No: FB105027443419-19-0221

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