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Farm Bill 2020: Critical Analysis

The streets were taken down by the farmers across the states of Haryana and Punjab after the release of the three agriculture reform bills by the Parliament on the 20th September, 2020. The states observed protests, bandhs with road blocking and massive rallies by the opposition and the farmers projecting their disagreements with the bills passed.

The major alleged concerns were oppression of farmers with the laws that would corporatize agriculture hence would damage the present working of the current mandi system. The releases of the bills have created mistrust and chaos in the farmers as their input was not taken in and implementation of these would certainly affect the market as a whole. Not only this, but it will also put the farmers in a vulnerable situation without any guaranteed prices by the government purchases and would hamper the revenue system of the states.

The three bills brought forth which led to protest all over the country are:

Farmer's Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020: The Bill, through Clauses 3 & 4, gives freedom to the farmer to indulge in intra-state or inter-state trade in areas outside the APMC mandis. It also prohibits the collection of any market fee under the state APMC Acts with respect to such trade outside the APMC market yards (Clause 6).The Bill also provides Clause 14, which gives it an overriding effect over the inconsistent provisions of the State APMC Acts. Also, the Central Government has been given powers to frame rules and regulations under the Act.

Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020: It seeks to create a legal framework for contract farming in India.

Essential Commodities (Amendment) Bill, 2020: It sanctions for regulating the supply and stock limit of certain specified agricultural produce under extraordinary circumstances such as an extraordinary price rise and natural calamity of grave nature, etc.

Aims Of The Bills:
The main target of the bills is to breakdown the monopoly created by government meddling in agricultural trade, this would be achieved by creating trading areas free of middlemen and government taxes external to the structure of Agricultural Produce Market Committees (APMCs).

It aims provide the farmers an open market so that they can sell their produce directly to these new zones, and don't have to go through the middlemen or to pay heavy levies such as mandi fees.

It wants to remove stock holding limits as well as to curb on inter-State and intra-State trade.

These bills aim to promote the creation of Farmer Producer Organizations on a large scale that will help in creating a farmer-friendly environment for contract farming where small players can benefit.

These bills aim to provide opportunity for the private players to invest in warehousing, grading and other marketing infrastructure.

The Reasons For The Opposition:

  • Against Constitutional provision of Federalism:

    • Agriculture and Markets are under the State subjects in List II, entry 14 and 28 respectively, hence the regulations are a direct encroachment upon the functions of the States
    • This provision is looked against the spirit of cooperative federalism enshrined in the Constitution.
  • Removal of MSP:

    • The breakdown of monopoly of the APMCs is an end to the assured procurement of food grains at minimum support prices (MSP).
    • Centre justifies this call as a step towards the one nation, one market plan
  • No mechanism for price fixation:

    • The Price Assurance Bill, just offers protection to farmers against price abuse, and does not recommend the instrument for price fixation.
    • The involvement of private player is seen as a threat to the farmers.
    • There is no legal framework to protect the exploited farms from the private corporate entities that would enter this unorganized sector.
  • Food security undermined:

    • The ease in the regulation of food items will cause the exporters, processors and traders to hold back the produce throughout the harvest season when prices are generally lower, and to release them later when prices increase
    • This would lead to no security of food as the States would have no information about the availability of stocks within the State.
    • This would only promote inflation with irrational volatility in the prices and increase black marketing on whole.
The protest around the country in regards to the farm bills has been the talk of the town, which could only be brought down by providing statutory backing to the minimum selling prices and procurement in the new bill so that the fears of farmers can be eliminated. The bill does benefit farmers by removing middlemen but this would only be into implementation when there are roads that link villages to markets, climate-controlled storage facilities, the electricity supply is made reliable and available to power those facilities, and food processing companies who compete to buy their produce.

The Central Government should involve State Governments in the implementation of the laws and should statutory bodies to monitor the working of the governments in this regard. The government should also assure the farmers of their procurement of the produce along with the MSPs they would adopt as to safeguard the interests of the small farmers. The government needs to clarify the fears of farmers as well as provide them with the right awareness and guidance in regards to the new regulations.

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