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Analyze the recently passed Agriculture reform Bill by government of India. Is this a step towards corporatizing the agriculture and gradually removing the provision of minimum support price which rescue farmers from low income trap?  

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Agriculture reform Bill

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(@disha)
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Posted by: @newadmin

Agriculture reform 

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(@aiswarya)
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  • Indian Agriculture is characterized by fragmentation due to small holding sizes and has certain weaknesses such as weather dependence, production uncertainties and market unpredictability.
  • It makes agriculture risky and inefficient in respect of both input & output management.
  • It empowers farmers for engaging with processors, wholesalers, aggregators,wholesalers, large retailers, exporters etc.and thus eliminating intermediaries resulting in full realization of price.
    • Farmers have been provided adequate protection. Sale, lease or mortgage of farmers’ land is totally prohibited and farmers’ land is also protected against any recovery.
    • It also provides an effective dispute resolution mechanism for with clear timelines for redressal
  • It contains mechanisms which would transfer the risk of market unpredictability from the farmer to the sponsor.
  • It also enables the farmer to access modern technology and better inputs. It will reduce the cost of marketing and improve income of farmers
  • It will help to attract private sector investment for building supply chains for supply of Indian farm produce to global markets. .
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(@soumyard)
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The president has recently given ascent to the agriculture bills. Advent of these three bills has welcomed a mass agitation around the country especially in Punjab and Haryana. The bills passed are:
1. Farmer's produce trade and commerce(promotion and facilitation) bill 2020
2. Farmers (Empowerment and protection) agreement on price assurance and farm services bill 2020
3. Essential commodities bill 2020

The bills are envisioned to benefit farmers by:
1. providing greater market accessibility beyond APMC mandis.
2. attracting private investment and capital.
3. preventing the intervention of intermediaries who used to consume major profit margin.

MSP is the minimum price assured to farmers by the government before the sowing season of the crops.

Although the bills have not explicitly stated the removal of the MSP regime:
1. There are apprehensions that:
    free trade outside mandi => agricultural produce market committee(APMC) unfeasible=> reduce government procurement => price below MSP.
2. Small farmers will not be able to compete with the bargaining power of private players in an open market.
3. Most crops where MSP procurement was absent had shown a sharp decline in the past.

As per the Shanta Kumar committee report, a decline in government procurement will hardly affect MSP:
1. Centre procures only paddy, wheat, and select pulses on a large scale.
2. Only 6% farmers sell their crops at MSP

The government should hold deliberations with the stakeholders. Agriculture being a state subject, the passing of the bills by the central government unilaterally hurts the spirit of cooperative federalism. India is an agrarian country, collaborative efforts by all parties involved will lead to inclusive development of the farmers.

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(@nindia641)
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The President of India  gives his assent to the 3 farm bills.The Bills aim to change the way agricultural produce is marketed, sold and stored across the country .They were initially  issued in the form of ordinance  in the month of June and later on passed by voice vote in both Lok Sabha and Rajya Sabha in the month of September.The bills passed are:

1. Farmer's produce trade and commerce(promotion and facilitation) bill, 2020-allows farmers to sell their crops outside the notified APMC Mandis without paying any state tax or fees .

2. Farmer’s (Empowerment and protection) agreement on price assurance and farm services bill ,2020-encourage contract farming and direct marketing.

3. Essential commodities (Amendment)bill ,2020-removes restrictions from several major food items including cereals, pulses, edible oils etc.

The government thought that  the new laws will provide farmers with more choices,  better prices for their crops , as well as lead their way to  private investment in agricultural marketing.But these bills does not receive support from farmers and result was mass agitation around the country specially Punjab ,Haryana ,Orissa.

The  advantages of bills are-

It will open more choices for farmers. They would be allowed to sell their produce freely anywhere to anyone.

  1. Trade within the  APMC Mandis includes many taxes.But after these bills, no taxes will be levied on trade outside the regulated APMC Mandis.
  2. It will provide barrier-free inter-state and intra-state trade and commerce.
  3. These bills allow farmers to engage directly with agricultural-business companies, exporters and retailers for services and sale of produce with the help of an agreement.

The disadvantages of bills are-

1)The functioning of APMC mandis are not transparent and often politicised.The farmers shares a close bond with commission agent than agri-transactions thus they trust them.

2)Small and marginal farmers don’t have resources to store or transport their produce to sell to the good private traders.Farmers cannot wait for the market forces to be profitable or prices to rise. Hence, rely on MSP.

3)Private traders can offer good price to the farmers because they need not to pay any tax ,with this trade will start growing outside Mandis and eventually Mandis will disappear might be possible after that price may go below the MSP.

The farmers needs this assurance that this won’t happen and lack of this is making them concerned and that’s why they are protesting.

      It is true that agriculture sector in India clearly needs reform.it needs high-end technologies, digital tools, entrepreneurs and farmer organisations to provide services to farmers. The government declares MSPs for crops, but there is no legal implication. The government can procure at the MSPs if it wants to thus the system of MSP will remain and government procurement will continue, this fear had to be clarified even further and farmers should be guided well in this regard.Necessary changes can also be made upon consultation and hearing their views and ideas. 

If agriculture goes wrong, nothing else will have a chance to go right in the country.” as M. S. Swaminathan, the agricultural geneticist from green Revolution said it rightly.

 

 

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(@vipul-singh)
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The President of India  gives his assent to the 3 farm bills.The Bills aim to change the way agricultural produce is marketed, sold and stored across the country .They were initially  issued in the form of ordinance  in the month of June and later on passed by voice vote in both Lok Sabha and Rajya Sabha in the month of September.The bills passed are:

  1. Farmer's produce trade and commerce(promotion and facilitation) bill, 2020-allows farmers to sell their crops outside the notified APMC Mandis without paying any state tax or fees .
  2. Farmer’s (Empowerment and protection) agreement on price assurance and farm services bill ,2020-encourage contract farming and direct marketing.
  3. Essential commodities (Amendment)bill ,2020-removes restrictions from several major food items including cereals, pulses, edible oils etc.

The government thought that  the new laws will provide farmers with more choices,  better prices for their crops , as well as lead their way to  private investment in agricultural marketing.But these bills does not receive support from farmers and result was mass agitation around the country specially Punjab ,Haryana ,Orissa.

The  advantages of bills are-

It will open more choices for farmers. They would be allowed to sell their produce freely anywhere to anyone.

  1. Trade within theAPMC Mandis includes many taxes.But after these bills, no taxes will be levied on trade outside the regulated APMC Mandis.
  2. It will provide barrier-free inter-state and intra-state trade and commerce.
  3. These bills allow farmers to engage directly with agricultural-business companies, exporters and retailers for services and sale of produce with the help of an agreement.

 

  1. The mission is to encourage the agricultural sector as an organised business and eliminate the uncertainties associated with the farming business. The FPOs will be made aatamnirbhar in terms of working by making them strong financially and technically. Due to income in agriculture being lesser than other sectors, many small farmers are migrating to cities for livelihood, and children of well-to-do farmers are going into different fields after studies. But given the increasing population of the state and its for food grains , the productivity in the agriculture sector need expansion.

 

 

  1. Prime Minister Narendra Modi in his Mann Ki Baat address on Sunday had spoken about FPOs running in Haryana and Tamil Nadu where farmers have come together to sell their produce directly to Azadpur Mandi in Delhi, big retail chains and Five Star Hotels and diversified into new crops like sweet corn, baby cord, cucumber, and capsicum to earn much more.

 

 

Under the UP policy, the FPOs will be brought on the e-NAM platform of the central government and also given a consolidated dashboard on a new portal and also given consolidated dashboard on a new portal to set up by the state govt. To help the farmers to establish the direct contact with buyers.

 

 

 

  1. A Project Monitoring Unit (PMU) will be setup at the State level to coordinate the exercise and prepare an online database of the to- be- formed by FPOs (Farmer Producer Organisation policy) after hand holding them to come into existence .

 

  1. A Help-desk will also be created to provide help to FPOs about business practices , law and taxation issues.

 

  1. About 2000 New FPOs are excepted to be created in the next 2 years under the New policy.

 

 

 

The disadvantages of bills are-

1)The functioning of APMC mandis are not transparent and often politicised.The farmers shares a close bond with commission agent than agri-transactions thus they trust them.

2)Small and marginal farmers don’t have resources to store or transport their produce to sell to the good private traders.Farmers cannot wait for the market forces to be profitable or prices to rise. Hence, rely on MSP.

3)Private traders can offer good price to the farmers because they need not to pay any tax ,with this trade will start growing outside Mandis and eventually Mandis will disappear might be possible after that price may go below the MSP.

The farmers needs this assurance that this won’t happen and lack of this is making them concerned and that’s why they are protesting.

      It is true that agriculture sector in India clearly needs reform.it needs high-end technologies, digital tools, entrepreneurs and farmer organisations to provide services to farmers. The government declares MSPs for crops, but there is no legal implication. The government can procure at the MSPs if it wants to thus the system of MSP will remain and government procurement will continue, this fear had to be clarified even further and farmers should be guided well in this regard.Necessary changes can also be made upon consultation and hearing their views and ideas. 

If agriculture goes wrong, nothing else will have a chance to go right in the country.” as M. S. Swaminathan, the agricultural geneticist from green Revolution said it rightly.

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(@rimi03)
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Joined: 2 months ago

Amid the protests by farmers’ organisations across the county, the controversial farm bills were passed in the parliament. Despite the government claiming that these acts will transfer Indian agriculture for the better, the farmers feel threatened by the three farm bills. Following are the points to analyse the same.

 

  • The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020 : It draws a framework for contract farming. Farmers will produce crops as per contracts with corporate investors.

 Pros: a) Farmers get opportunity of diversification of crops.

        b) This can open new markets that otherwise would not have been available to farmers.

        c) Since the prices will be fixed beforehand, the contract farming would ensure that farmers agree to the norms only if they are satisfied with the price.

Cons: a) under this law it’s not mandatory to have a written contact with the farmer and this will lead to cheating on farmers.

         b) Bill does not specify that contact price should at least be the MSP. Powerful investors would bind them into unfavourable contracts that would be beyond the understanding of farmers.

 

  • The Essential Commodities Act (Amendment) Bill : The central government can regulate food items in extraordinary circumstances or impose stock limits if there is a steep price rise. The number of essential commodities have been reduced.

 Pros: a) the amended law provides a mechanism for the regulation of agricultural food stuffs under extraordinary price rise, war, famine and natural calamity of a severe nature.

Cons: a) The farmers are not getting any new freedom. On the contrary the government is now removing all the food stuff from this category allowing companies and traders to store as much as they want leading to hoarding.

          b) Government can intervene only if there is a 50% price rise in case of non-perishable goods and 100% rise in case of perishable goods.

 

 

  • Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill 2020 : It allows intrastate and interstate trade of famers produce beyond the physical premises of APMC.

 Pros: a) Farmers will have a freer and flexible market and they can sell their produce to anyone acting as an additional market channel.

        b) The reforms will catalyse growth in the sector through private sector investment in building infrastructure and supply chain for farm produce in national and global markets.

Cons:  a) States will lose huge sums of money that they earned as cess through APMC mandis.

           b) It might lead to corporatisation of agriculture.

           c) The trade outside APMC mandis are virtually unregulated.

           d) With the new bill, any discrepancy regarding agents in the APMC mandis would be settled in a sub divisional magistrate court which may not be in the capacity of the farmers.

 

Constitutionality of the bills : agriculture is specifically mentioned in the state list of Indian Constitution. Union list and Concurrent list put matters relating to agriculture outside the parliament’s jurisdiction. No entry in respect of agriculture in the state list is subject to any entry in the union or concurrent list. Though, the parliament can legislate on an item in the state list under specific circumstances laid down in the constitution, it still dampens the cause of cooperative federalism.

 

Though the constitutional validity of these bills are still in question, the bills can actually help the farmers if regulated well. Agriculture is the backbone of Indian economy. Its needs to be modernised for better inputs and private sectors can help in bringing the required infrastructure and technology but at the same time farmers will require protection against capitalist exploitation. It is important that farmers' organisations are heard and their demands are noted so that a cooperation towards the bills is achieved. The government should make sure that these bills give gains only to the one section it is most concerned about - the farmers. 

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