India is an agricultural country. More than 70% of India's population is
directly or indirectly involved in agriculture related work. Due to the hard
work of these farmers, we are able to sit and eat in peace. These farmers
sustain the entire country but it is a sad truth that they are struggling with
starvation. Recently, the Central Government has passed new agricultural bills
for the benefit of farmers and the good of the agricultural sector. But farmers
and state governments are opposing these agricultural bills
What is Agriculture Bill 2020?
The Farm Bill 2020 or the Agriculture Bill 2020 is a combination of three Bills
recently passed by Parliament. These bills are; Farmers Produce and Commerce
(Promotion and Facilitation) Bill 2020, Farmers Agreement (Empowerment and
Protection) on Price Assurance and Farm Services Bill 2020 and Essential
Commodities (Amendment) Bill 2020. These bills have led to major structural
changes in the agricultural sector. These bills make corporate in the
agricultural ecosystem more profitable for farmers
Benefits to farmers:
Farm Bill 2020 provides an alternative platform for farmers to sell their
produce in the open market. Now the farmer is free to sell his products to
anyone else as he wishes. Thus, they can earn profit by selling crop products at
a higher price. There will be no APMC market fee or cess on transactions for
such business areas. APMC will continue its functioning. Now APMC has to compete
with these alternative platforms and now farmers have an option to sell their
products. The Bill empowers farmers to sell their goods directly from the farm
to the corporate or exporter in bulk. The current MSP-based procurement of food
grains in the Bill of 2020 has not been removed. The MSP-based procurement
system will continue and farmers can sell their crop products in the mandi at
the existing MSP as before.
Government's intention towards Farm Bill 2020:
The government has introduced these agricultural bills for structural reforms in
the agricultural sector. This step has been taken by the government to boost the
agricultural sector as well as double the income of farmers by 2022. It is
believed that by freeing the agricultural sector, farmers will get better prices
of agricultural products. When farmers sell their products directly to
corporates and exporters, it will also motivate the corporate sector and
exporters to invest in the agro-ecosystem.
Why are farmers protesting?
The farmer is fearful of ending the currently running MSP system for his produce
as the New Farm Bill 2020 opens the way for farmers to sell their produce in the
open market as well as fixing prices on their own understanding between
corporate and farmer . Farmers also fear that large retail traders and corporate
money may dominate the agricultural sector. Farmers also suspect that the future
if the business runs adequately through other alternative platforms
Bill does not prescribe any mechanism for pricing. Thus, there is a fear among
farmers that the agricultural system in the hands of private corporate houses
may lead to exploitation of farmers. The Essential Commodities (Amendment)
Ordinance removes pulses, oils, edible oils, onions and potatoes from the
essentials list. Thus the modification uncontrolled the production, transport,
storage and distribution of these food items.
- The rights of the Agricultural Produce Marketing Committee ie Agricultural
Produce Market Committee (APMC) of the states will remain intact. Therefore,
farmers will have the option of government agencies.
- The new bill encourages farmers to interstate trade (interstate trade),
so that farmers will be able to sell their products freely in another state.
- APMCs currently charge a market fee of 1 percent to 10 percent on various
goods, but now no state or central tax will be levied on trade outside the state
- No APMC tax or any levy and fees etc. will be paid. Therefore, no further
documents will be required. At the same time, both buyer and seller will get
benefit. APMC tax will be paid by private companies and traders, not by farmers.
- Farmers can also partner with private players or agencies for contract
farming or contract farming.
- Contract farming will allow private agencies to purchase the product -
the contract will be for the product only. No private agencies will be
allowed to do anything with the farmers' land nor will there be any
construction on the farmer's land under the contract farming ordinance.
At present, farmers are dependent on the rates fixed by the government. But in
the new order, farmers will be able to connect with big traders and exporters,
which will make farming profitable.
- each state has different laws for agriculture and procurement.
Therefore, a uniform central law implemented under the new law will provide
an opportunity for equality for all stakeholders.
- The new bill will encourage more investment in agriculture, as it will
increase competition. Private investment will further strengthen farming
infrastructure and create employment opportunities.
- Under the APMC system, only licensed traders called Aadhatiya i.e. middleman
were allowed to trade in grain markets, but the new Bill allows anyone to trade
with PAN number.
- This will break the cartel of middlemen, which is an important issue
across India. Twelve, the new bill will transfer the risk of market
uncertainty from farmer to private agency and company. It is also important
for you to know that according to the 2015 Shanta Kumar Committee report, 94 percent farmers are
already selling their produce to private companies and traders. At the same
time, only 6 percent farmers in APMC mandis sell their produce to the government
procurement agencies in the minimum support price (MSP). But there is no
restriction on them ie 6 percent farmers for selling products to private
companies and traders.