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Agricultural Reforms 2020: A Critical Analysis

Agriculture is the primary source of livelihood for about 58% of India's population. As the central government is committed to double the income of farmers by 2022, the government has enacted three acts namely the Farmer's Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, the Farmer (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020, the Essential Commodities (Amendment) Act, 2020. Whether this Act is in favour or against the Indian Farmers, this will be perspicuous from the analysis done below.

Constitutionality of the Acts

As per the Constitution of India, there are 97 subjects in the Union List on which Parliament exercises its exclusive power to legislate which is mentioned in Article 246 of Indian Constitution, the State List has 66 items on which states alone can legislate; the Concurrent List has 47 subjects on which both the Centre and states can legislate, but in case of a conflict, the law made by Parliament prevails as per Article 254 of the constitution.

The fact that the Central government can legislate on the subjects of State List under specific circumstances cannot be denied. But as we all know that agriculture is the subject of the State List, how can parliament make any law on that. Also as per the decision in 1962 in State of West Bengal v. Union of India[1], it was held by the Supreme Court that Indian Constitution is not federal but then in 1994 as per S R Bommai v. Union of India[2] the federalism is a part of basic structure of the constitution.

The subjects mentioned in the concurrent List can never be interpreted as if the central government has powers to make the laws related to agriculture as agriculture is the state subject.
It cannot be considered as a subject unless the government considers agriculture as trade under Entry 41 of the Union List.

Before passing a bill, the interest groups are always taken into consideration whether the upcoming law serves the purpose or not. But in this Monsoon Session, the bill was passed so haphazardly that no interest groups were taken into account and the bills were passed with the majority.

Ramifications of the new Acts
  1. As per the Farmer's Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, the farmers will have the opportunity to sell and purchase the farm produce outside the state. Under the new law, the mandis which are operated under APMC will not be abrogated but soon they will cease to exist. The small farmers will be forced to sell their produce to the corporates at lower prices and due to abolition of mandi there will be no purchase of crops on MSP (Minimum Support Price).
  2. According to the Farmer (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020, the farmers are allowed to enter into contract farming with the corporates. The biggest fear that haunts the farmers is that the corporates would draft the agreement in such a way that the farmers will be left at the mercy of the corporates. Furthermore, the majority farmers are not well versed with understanding the complex agreement clauses which will keep the corporates in a dominating position. Another aspect is the corporates will prefer to enter into an agreement with the big farmers because of the huge profits at one go.

    The small farmers will have to adjust with the lower prices offered by the corporates.
  3. As per the Essential Commodities (Amendment) Act, 2020 commodities like cereals, pulses, oilseeds, onion and potatoes have been removed from the list of essential commodities. According to experts it is a right step as it will boost farmers' income, but it may also lead to increase in rural poverty and have an adverse impact on the public distribution system. A major loophole is this amendment to the Act will also allow big businessmen to hoard essential commodities such as cereals, pulses, edible oil, onion and potato leading to rise in prices.

Government's take on new Acts

MSP is in question because the quality of the farms produce cannot always be superior. There are varieties of crops which are sold by farmers. As per them the superior quality is kept for self consumption by the farmers and the inferior quality is provided to sell in the market which results in loss to the government.

The government thinks that the new laws will help to get acquainted with the new modern technology which will help them to increase their production. The Act will also help the farmers to establish a direct contact between the farmers and the corporates and the middlemen who used to exploit the farmers will have no role anymore.

Although there will be loss in jobs of middlemen in states, the fear of middlemen will also remain in the companies as farmers will not be in a position to bargain their demands independently and hence need a middleman to put their demands on table. The fear of exploitation for which the government put the new laws will also continue to mushroom.

As per the central government there is no removal of APMCs and they will continue to exist but after closely digging into the problem, we find that gradually APMCs existence will cease to exist as only a few farmers will come there who did not get suitable deals with the corporates due to which the state government will not be in position to finance or maintain them which ultimately leads to their end.

Criticism of the Laws
In the article titled 'Did You Think the New Laws Were Only About the Farmers?' of The Wire, Section 13 of The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020[3], has been rightly criticized as it takes away the powers of the farmers or any other person to approach the court as the section itself provides for a wider interpretation.
�Whatever is done by the government in good faith may not necessarily be good for the people. Thus this section provides for wide interpretation which needs to be narrowed down.

Although the nationwide protests against the new farm Acts are going on, no conclusion has been drawn. The farmers want the new laws to be repealed and do not want to negotiate which is clear from the recent dialogues. Although the Honourable Prime Minister has assured MSP to the farmers while he was addressing the nation recently. But the farmers are still not ready to accept those laws. This is true that the laws cannot be imposed without consulting the interest groups. There should have been a proper discussion on the bills before passing them. If a proper mechanism would have followed, no such chaos would have occurred.

We can still hope that the central government would come up with a better solution in order to solve the intricacies of the new laws.

  1. State of West Bengal v. Union of India 1964 SCR (1) 371
  2. S R Bommai v. Union of India 1994 SCC (3)
Written By: Vanshika Sharma

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