Clear all

Farm bill 2020  

Posts: 2
New Member
Joined: 2 months ago

A Farm bill passed recently by government of India in 2020 The Farmers (empowerment and Protection) Agreement on Price Assurance and Farm Service Act, 2020 which creates a national framework for contract farming through a agreement between farmer and buyer before the production or rearing of any farm produce.
This act permits the intra state and inter state trade of farmers beyond the physical premise of Agriculture Produce Market Committee (APMC) markets and other markets notified under APMC act.
This 3 bills are passed to enjoy the freedom of choice of sale and purchase of agriculture produce and promote barrier free intra, inter state trade.
As we know there are "two sides of a coin" there are some pros and cons.
Advantages :
1. The farmers had moved towards a freer and more flexible system.
2.Selling produces outside the physical territory of the mandis will be an additional marketing channel for the farmers.
3.The new bill has not brought any major drastic changes, only a parallel system working with the existing system. Prior to these bills, farmers can sell their produce to the whole world, but via the e- NAM system.
4. The amendment to the Essential Commodities Act which is one of the three bills under protest removes the scare or fear of the farmers that traders who buy from farmers would be punished for holding stocks that are deemed excess and inflicting losses for the farmers.
5. It gives imp to farmer and their production so that farmer would get stipulated price for crop.
Disadvantages :
1. This bills allow the monopoly of APMC there by allowing sale and purchase of crop outside these state government regulated the market .
2. Government declared MSP for crop, but there has been no law mandating their implementation .
3. This bill doesn't give any statutory backing to MPS. farmer have nothing to do with legal system but every thing to do with mps, a price at which they sell their produce, there is not even mention of either mps or procurement.
4.the bill made farmers and trader at Mercy of civil servants, rather than courts.
Due to these issues many farmers started protesting all over country .
simple solution against protest of farmers with respect to farm bill is to statutory backing MPS of new bill is to give farmer choice to sell without middle men. To power those facilities which may help farmers,, and food companies who compete to buy their goods

1 Reply
Posts: 1
New Member
Joined: 2 months ago

Agriculture has been the most neglected sector since independence. No major reforms are introduced till date apart from Green Revolution. Farm sector which used to contribute 50 % of National Income with 70% of Labour force involved in 1950s now has shrunken to 16% of total National Income while still employing 60% of Labour force. Because of marginal land holding , lack of land records , labour surplus , lack of capital investment , the productivity remained stagnant which resulted in declining trend in GDP.

Recently three agriculture reform bills replaced the ordinance of June , 2020 and became the Acts after the President's assent. This decision of the government without consultation causing protest of a large no of farmers, especially in Punjab, Haryana, Delhi, and western U.P. These Bills seeks to give freedom to farmers to sell their produce outside the notified APMC market yards.  

Three Bills are : 




Advantages : 

1) It ensures barrier-free inter-state and intra-state trade and commerce outside Agricultural Produce Marketing legislations (APMC Mandis). It will open more choices for farmers. They would be allowed to sell their products freely anywhere to anyone. They can trade at farm gate, cold storage, warehouse, processing units, etc and can fetch a better price through direct marketing by eliminating intermediaries.

2) Trade within the mandis through the commission agent is taxable, which includes rural development fee, market fee and the commission of the agent. But after these bills, no taxes will be levied on trade outside the regulated mandis.

3) It empowers the farmers to directly engage with processors, wholesalers, aggregators, large retailers, exporters, etc. It facilitates Price assurance to farmers even before sowing of crops. It will transfer the risk of market unpredictability from the farmer to the sponsor by providing an effective dispute resolution mechanism for farmers and sponsors. 

4) Earlier there was a stocking limits prescribed to every essential items like vegetables, cereals, pulses, oilseeds, edible oils . No trader can stock the farm produce above the prescribed limits. Now it is revoked. Only in war and pandemic like situation government can invoke the limits. The motive of the government may be to boost the export of the surplus food grains but given the loopholes , if found , traders can exploit the consumers for their profit by restraining domestic market supply.

Disadvantages :

1) Small and marginal farmers do not have the resources to store or transport their products to sell to the good private traders. They sell it upon harvesting to fulfil their basic needs. They cannot wait for the market forces to be profitable or prices to rise. Therefore they rely on Minimum Support Price (MSP).

2) The farmers share a good bond more than agri-transactions with the commission agents. They get credit in advance from the commission agents for their farming inputs without collaterals. Their relationship with the commission agents are from the decades. They trust them.

3) The private traders and companies can offer a higher price to farmers as they would not have to pay tax. Once they start offering a better price to farmers than what is offered in the mandis. And over time, with trade outside the mandis growing, the mandis will eventually disappear. And after that, the price may go well below the MSP. The farmers’ need this safeguard to assure them and the lack of this is making them concerned. Therefore they protests.

Opinion : 

Farmers have loosed confidence regarding the future security of Minimum Support Price and the sustainable functioning of APMC mandis. These fears gain strength with the experience of States such as Bihar which abolished APMCs in 2006. After the abolition of mandis, farmers in Bihar on average received lower prices compared to the MSP for most crops.  

Government need to make a strong institutional arrangement and regulations in order to provide adequate safeguards to the farming community and clear out their doubts and fears if they are giving power to Market. Free market might not affect the big farmers but it might harm to lakhs of unorganized small farmers who have been already suffering due to pandemic.They should not be left to linger in concerns about the enactments. 

Necessary changes can be made upon consultation and hearing their views because they are the ones on whom the whole country is depending.