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Farm Laws - India Is An Agri Based Economy

India is an Agri based economy and the majority of our population depend on the Agriculture sector for their survival, even after this the reality is something different that we can�t ignore the harsh reality that farmers are the most marginalized sections of society. There were several attempts made to bring reforms in this sector from the very time of the green revolution but lack of execution made these attempts just in paper and words, some attempts such as the formation of APMC were revolutionary but the issue persists that only a small sect got benefited which made this wholesome sect in the same girth as it was before. This article will deal with newly passed farm bills that got the president�s assent recently and are expected to be implemented from the financial year 2021-2022.

One such attempt is made by the current government amid COVID-19 by bringing three farm bills in parliament namely Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill which is aimed to end monopoly enjoyed by food corporation of India (FCI) and Agricultural produce market committee (APMC) in existing trading and distribution system, the second one is the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill which is aimed at introducing national market and big corporates in the agricultural sector to create opportunities for farmers by inducing contract farming, and the Essential Commodities (Amendment) Bill to deregulate the storage of essentials. And the three bills together brought intending to boost the farmer�s income and a distance goal of doubling the farmer's income by 2022 which will eventually boost the nation�s GDP too.

The current system and need of the hour:

First, we need to understand what was the need for such reforms and what kind of issue persists with the current system. Currently, we have the APMC mandi system which is a kind of government-authorized mandi where state governments levy taxes on sell and purchase of goods.

The issue here is that those farmers having large scale production capacity only those who were able to sell their product in APMC mandis get the benefit of minimum support price (MSP) and other small scale farmers were either sell their produces in the general market or have to take the support of middlemen in which they only get that price which is fixed by middlemen and this circles of middlemen are that huge that the subsidies provided by the government is supposed to be distributed between them only and farmers get the very marginal price of their product.

There is a need to rebuilt the shaken confidence of this sect by ending the monopoly of mandis and middlemen and inducing a huge capital from the private sector to give a boost to the Agri economy of our country. These bills will work as a catalyst in that very motive. Inducement of big private players and the provisions regarding contract farming will allow the farmers to use technologies of the modern world and will eventually boost the overall production and a direct impact on farmer's income.

New farm bills will limit the intervention of the government because they are bound not to restrict the export when the price of a commodity is in high flux and this will directly ensure more money in the farmer's pocket. To avoid cumbersome drafting and legal wording by corporates in the contract this bill comes up with a model contract so that farmers can easily understand what is beneficial for them and what�s not.

The second bill addresses the price-fixing mechanism in which there are three ways by which they can fix the price of their crops they have the option of fixing price before contract as per their cost of production and including the fluctuation in the market so that they would no get into the trap of corporates and they also have the option of fixing price after final cultivation so that they can sell theirs produces based on the open market price.

Constitutionality of these acts:

Article 13 states (1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void (2) The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void.

So the very first question arises that are this laws anyhow seeking to abridge the fundamental rights or is against the basic structure of constitution? There were petitions filed contending that this laws are against the very basic tenet of constitution that is federalism as under 7th schedule of constitution which defines and specifies allocation of powers and functions between Union & States. It contains three lists; i.e.
  1. Union List,
  2. State List and
  3. Concurrent List.
So as per this agriculture comes under the state list as per entry 14 to state list along with that there were two more entries i.e. 26 and 27 which deals with trade, commerce, production and distribution of goods and products within state boundary whereas entry 33 to concurrent list by the 3rd constitutional amendment deals with production, trade, commerce and supply. The point here is this acts are basically dealing with reforms to Agri sect by introducing or making it as a agriculture industry and doing so these acts are mainly dealing with trade and commerce.

On subject under concurrent list union and state both hold power while the power of parliament is superior in that case and there are some points that it is in controversy with entry 27 to state list but in 1954 by 3rd amendment act along with introduction of trade and commerce in concurrent list there is slight change in entry 26 and 27 to state list i.e. all the objects of this list are subject to provision of entry 33 to the 3rd list. So on a normal interface of these acts it can be said that they can sustain judicial scrutiny but there are slight chances to get trapped on entry 14 to state list subject to decision of honorable supreme court.

Why protest against these bills?

Despite the need for reform what makes the farmers protesting against these bills. So these reforms are not new to the agrarian sector 18 out of 36 state/union territories have already such reforms or similar to this and if the contention is that this time it is universally applied to the whole country is unfounded. But the main contention is missing of MSP in these bills while the government assuring that MSP will be there but despite rectification in these bills farmers are demanding complete revocation.

One more contention shown by the farmers is the abolition of the hoarding limit which can lead to black marketing and price rise as it will enable the exporters and traders to adjust the demand and price of a particular crop, enabling them to store large quantities of crops until the price increases and then sell it which will be of no gain to farmers and will hurt the price of these food crops making the consumer at loss. The best solution, in that case, is understanding farmer's concerns and keeping the balance between both sides.

The most important thing which requires attention is MSP, just promising verbally is not enough, giving on paper should be a must, because this is the thing for which they were striving and a majority of them were debt-ridden in the current scenario. Making MSP a legal right and constant throughout the country will help farmers get the right price of their crop providing them government purchasing as an option will ensure that they will not be exploited by big corporate players.

We need to understand that if the country has to come out with solutions to the persisting issue in our current system of agricultural sect to its grave economic crisis and to boost the income of its sects, the solution lies neither in the economies of the urban or in the heavy wording of sitting bureaucrats or of the extractive economies of the capital. The answer decisively lies in the resuscitation of the rural economy of country with dignity and respect and understanding the ground reality by taking the members of that specific sect into consideration. The country, it must be understood, cannot survive if the rural falls, and chances of such an event happening today can only be averted with a considered policy response initiated with empathy and care.

  1. Constitution of India, ( of India)
  2. The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020
  3. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020
  4. The Essential Commodities (Amendment) Act, 2020

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