The Farmers Bill 2020, which is the combination of 3 bills, Farmers' Produce
Trade and Commerce (Promotion and Facilitation) Bill, Farmers (Empowerment and
Protection) Agreement on Price Assurance and Farm Services Bill, and Essential
Commodities (Amendment) Bill, aims to provide the farmers of our country a
better ecosystem for selling their agricultural produces, defines a legal
framework for the contract farming, and give directions for the stocking and
hoarding of specific agricultural produces, in natural circumstances or
There is rampant exploitation of farmers for so many years, so the government's
primary motive behind introducing these bills is to stop farmers' exploitation
and encourage corporate investments in the agricultural ecosystem to make it
lucrative for farmers.
The bill has overriding effects on all the State Laws regarding this. The bill
is introduced as Farmers Bill in parliament in June 2020, where both Houses
passed the bill in September amid all oppositions and protests by farmers and
The Reforms under Farmers Bill
Farmers' Produce Trade and Commerce (Promotion and Facilitation), Bill Through the Farmers' Produce Trade and Commerce (Promotion and Facilitation)
Bill, the government aims to provide farmers a new way of selling their
products, i.e., barrier-free trade, online transactions for buying and
selling and setting up the Conciliation Board for disputes
- Trade outside the market premises:
Essentially, by this bill, the
government allows the farmer to trade inter-state or intra-state without
entering into the premises of APMC (Agricultural Produce Marketing Committees).
APMC’s are the State-regulated market or mandis where a farmer takes his
agricultural produce and sell it to different traders. Hence, it provides
that a buyer can purchase farm produce directly from the farmer outside the
physical premises of the market committees formed under the state
Agricultural Produce Market Committees.
- Abolishing the market fee:
Every state has its own regulated APMC from
which the state gets some revenue by levying some expenses on the farmers'
trade's trade. The following bill aims to abolish the market fees by not
imposing fees on the exchange, which will happen outside the physical market
- Electronic Trading and Transaction Platform:
Employing this bill, the
government aims to set up online platforms to facilitate the buying and selling
of the farmers' agricultural produce in the trade area through the network of
devices and internet applications which will results in the physical delivery of
the farm produce.
- Dispute Conciliation Boards:
The Bill provides for the setting up of
Conciliation Boards by the Sub-Divisional Magistrate to arrive at mutually
acceptable solutions in cases of disputes arising out of transactions between
Farmers (Empowerment and Protection) Agreement on Price Assurance
and Farm Services BillThe previous bill seeks to lift all the trade barriers and allow farmers to
trade inter-state or intra-state; this bill introduces Contractual Farming. This
bill nearly steps towards the farming agreement between the farmers and the
other purchasing party for future agricultural produce at the “mutually agreed
remunerative price framework” fairly and transparently. The minimum period
stipulated for an agreement is one crop season or one production cycle of
livestock. The maximum period for the same is five years unless there is a
longer production cycle of any farming produce.
The agreement must be mutually agreed on the price by both the parties and the
standards and quality of the farm produce should be specified in the agreement.
If the farm price is subjected to any variation, then the agreement must contain
a guaranteed price and the additional amount.
If there is any dispute regarding the farming agreement, then both the parties
to the contract must reach the conciliation board, where the representatives of
the board must look into the matter. The other authority for deciding disputes
relating to farming agreements is the Sub-Divisional Magistrate.
Essential Commodities (Amendment) Bill, 2020Through this bill the government added a subclause 1A in the Section 3 providing
that the supply of such foodstuffs, including cereals, pulses, potato, onions,
edible oilseeds and oils, as the Central Government may, by notification in the
Official Gazette, specify, may be regulated only under extraordinary
circumstances which may include war, famine, tremendous price rise and natural
calamity of grave nature.
This bill aims to attract private investments, by removing the heavy stock
limits on foodstuffs. The Bill prescribes that the basis for imposition of stock
limits shall be price rise and applicable only in cases of a 100% increase in
the retail price of horticulture produce or 50% increase in the retail price of
non-perishable agricultural foodstuffs. Price rise shall be evaluated in
relation to the price prevailing immediately preceding 12 months or average
retail price of the last five years, whichever is lower.
The exclusion is being made for the processors or value chain participants of
agricultural produce if their stock limit does not exceed the overall ceiling of
installed processing capacity or demand for export (in case of exporters).
Toward the beginning, the Farmer Bills are being seen by state governments as
rapid encroachment on the state's powers and components as agribusiness and
markets are State subjects under Entries 14 and 28 independently in List II
Constitution of India. They are seen as clashing with the spirit of supportive
federalism and the public authority country loved in the Constitution.
case, the Central government has battled that trade and business in food things
fall under Entry 33 in the Concurrent List, from now on attributing sacrosanct
fittingness to the Farmer Bills. Though Entry 33 between state trade food things
would be reliant upon Central authorization, any laws impacting intra-state
trade are a quick impedance with state powers and abbreviate state institutions'
reasonability on issue recorded under the State List.
It has been raised in the Sarkaria Commission Report on Center State Relations that Entry 33 has been
used by the Center to disproportionately empower itself in issues relating to
agriculture. Since the Farmer Bills have a supplanting sway over State acts,
inquiries regarding encroachment of the Constitution's public authority plan
have arisen. Without a doubt, the Central government will respect states'
self-administration in regulatory development and any necessity on their powers
and assets is silly.
The second vital concern is the consent of all traders, farmers, states, and
commission agents. Why they were not consulted prior to the introduction of Farm
Bill 2020 in the Parliament. Those who stand to lose most from these Farmer
Bills were not permitted to participate in discussions on the subject. The
government has hastily passed the Farmer Bills in the Parliament despite strong
Opportunity And Obstacles
The Government of India aims to provide a better ecosystem to our country's
farmers through the bill called Farm Bill 2020, which is being passed in
parliament and then in both the houses. Though the bill seeks to provide
different opportunities to the farmers, it also created chaos throughout the
country. The farmers are finding the bill as an outrageous loss for themselves
in the future; that’s why they are protesting in different states of the
country. The state also finds it challenging to implement, as the bill overrides
the state governed APMC laws.
We have to see the perspective of GOI and farmers. Let us discuss the
opportunity being created for the farmers through this bill.
There are different concerns individually connected to all three bills. The
issues that the farmers fear in relation to these bills are:
- The buying and selling of the agricultural products can be done in a
more free manner, they can sell their produces outside the mandis without
- While trading can be done outside the physical premises of mandis, the government seeks to provide another platform for trading, i.e.,
- These bills remove the fear for holding the stock more than the GOI's prescribed limit by a licensed trader. Prior to these bills,
traders would be punished for holding the stocks that are deemed excess and
inflicting losses for farmers.
- The bill ensures that farmers will get the stipulated price for crops so
that farming services.
Some beneficial reforms need to be done by the Government of India:
End of Minimum Support Price: The farmers' most
significant concerns are regarding the MSP (Minimum Support Price). The private
organizations will be in the power position and the farmers will be subjected to
exploitation. The organizations will be able to exploit the farmers and they
will be able to take the agriculture produce at even less than the MSP. The
farmers are demanding the MSP as the legal rights for themselves. The government
had verbally given the farmers an empathy, that the MSP will be there.
Dismantling the existing APMC system:
The government seeks
to end the current APMC system throughout the country, even though they stated
that these bills aim to provide an alternate ecosystem to the farmers for their
trade. The new ecosystem allows farmers to sell their products outside the
mandis; however, even under the current system, farmers are already free to sell
to anyone, as most APMC acts contain exclusion clauses. Therefore, the freedom
to sell outside the physical premises of the mandis were never curtailed by
these acts; also, the APMC laws only regulate the very first transaction between
the farmers and the buyer- not the trader that followed. Prior to these bills,
many states already amended their APMC laws with the 2017 Model APMC Act and
provided for setting up of special and private market yards for purchase
directly from the farmers.
The State intervention in the current mandi system issues will be over, whereas
the GOI would take over the subject of the APMC’s. The new ecosystem will
eventually result in the shutdown of the APMC’s, which will result in the loss
of farmers as they will no longer be able to bargain to trade their agricultural
The state earns from the APMC’s as the market or fees, whereas the
bill's provision. i.e., Section 6 provides for the waiver of market fee or levy
for all transactions made outside the APMC premises. It will be detrimental for
the states, as they will not be able to develop the rural areas and linkage of
rural roads with mandis for the farmers to carry their agricultural products.
APMCs have their shortcomings, but it provides a farmer to bargain and sell
their products at much significant rates, farmers will get MSP and bargain in
terms of grading, moisture measurements, weighing, etc.
Hence, creating two distinct parallel markets will not be a solution for a
farmer; instead, GOI needs to improve the situation of APMCs so that the farmers
will not be subjected to exploitation.
Loss of revenue and livelihoods: The dismantling of APMCs
will eventually result in the state's revenue loss and small and marginal
farmers. The state generates revenue from the APMC, and they pay off the laborer
who do their jobs such as packaging, storing, transporting, etc. After
implementing these bills, the state will eventually lose their revenue that it
earns from the APMCs and the small laborers will suffer. The livelihoods of
different traders and small labour will be at stake with the mandi system's
The GOI introduced these bills to eliminate all the middlemen between the
farmers and the buyers. The price is being added and added by them as the
products pass through them to the final buyers. But, the GOI introducing the
private market will gradually add the middlemen even without a license. So, the
new bill will indirectly result in the emergence of intermediaries and
Let's talk about the online platform for trading and transactions, keeping in
mind the small landholding farmers' small output. It does not seem to be
attainable to sell their products anywhere outside the mandi's physical premises
when MSP is not a legal right.
The exploitation of farmers by parties involved in the farming
agreement: The big private organization will easily negotiate with the
small or marginal farmer. The small or marginal farmers will not be able to
negotiate much with the bigger parties as they have small output. Although the
bill aims to protect farmers against exploitation and increase choice in the
sale, it does not consider that individual farmer might not be equipped to
negotiate with private corporations to ensure themselves a fair price.
Black Marketing: The stock limit has been changed and will
be in the hands of GOI, i.e., how to regulate and when to regulate. The GOI will
limit the stocking and hoarding of some essential commodities in extraordinary
circumstances, such as war, famine, price rising, etc. This will give rise to
black marketing; the traders, retailers, organizations will be able to keep
heavy stocks of the products and subject them to selling while the prices are
low in the market, which will eventually result in the loss of farmer, as their
harvested crop will go waste, or the big traders or organization will buy them
on low rates.
- Make MSP a lawful appropriate for the farmers all through the country
- Do not merely destroy the APMC structure; all things being equal need to
improve the current APMC design's conditions. There is a need to change the
current APMC markets and sub-advertises instead of destroying them in a
roundabout way and make new business sectors to decrease the weight on existing
- Legislations protecting farmers from crop damage and loss caused by
drought, floods, and cyclones and ensuring income in such calamities through
state support are imperative in India.
- GOI needs to improve the street network, transport offices, environment
controlled storage spaces, and power supply, which are essential for exceptional
enhancements in agribusiness.
The farmers all over the country are distressed about their indebtedness, their
small landholdings, fewer facilities for producing farm products, climate
change, transportation. A mere bill that is providing a new ecosystem to the
farmers is also not an amicable solution to tackle the farmer's problem. The
bills are directly or indirectly creating new issues for the farmers, and
subsequently, the farmers will never be able to decide the price of their own
There is an urgent need to listen to the farmers' voices protesting in different
states of the country. The play between India's government and the government of
different states is creating new problems for the farmers. Although the states
have their own APMC laws, GOI is still interfering in between and doing
privatization of the most crucial sector, i.e., Agriculture.
The agriculture sector requires stability, whereas the new model will only
introduce more price volatility by introducing market forces. The reassessing
of the bill has to be done and all the decisions should be first discussed with
farmers, traders, and states to meet the needs and requirements of farmers.