Farm Bills: Watershed moment or Subterfuge?

The last monsoon session of Parliament saw a lot of hue and cry over the Farm Bills that the Union Government had formulated. The high political drama had eventually led to the suspension of a few Members of Parliament for 7 days who rushed to the well of the House.

The three bills passed are farmers’ Produce Trade and Commerce (Promotion and facilitation) Bill, 2020; the farmers’ (Empowerment and Protection) Agreement of Price Assurance and Farm Service Bill, 2020. The Essential Commodities (Amendment) Bill, 2020 was passed earlier.

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill seeks to allow farmers to sell their produce outside APMC ‘mandis’ to whoever they want. The Bill prohibits the state governments and APMCs from levying any market fee, cess or any other charge on the trade of scheduled farmers’ produce outside the APMC notified markets.

Farmers’ (Empowerment and Protection) Agreement of Price Assurance and farm services bill provides a framework for farmers to engage in contract farming, i.e, farming as per an agreement with the buyer before sowing, under which farmer promises to sell his produce to the buyer at a pre-determined price. The bill also allows private buyers to hoard essential commodities for future sales, which only government authorised agents could do earlier. The Essential Commodities (Amendment) Bill, 2020 makes provision for the removal of items such as cereals and pulses from the list of essential commodities’ list. The Bill aims at legitimizing what would otherwise be called as hoarding, without the government even having the capability of knowing which stock of which grain exists with who.

Even the place and time of stock would not be known.

While Prime Minister Narendra Modi hailed the Farm Bills and called their passage a ‘watershed moment’ for Indian farmers, the Opposition termed the Bill ant- farmer and compared them with a death warrant. The farmers particularly in agriculture dominated states like Haryana, Punjab and Uttar Pradesh are apprehensive about not getting the government promised Minimum support price (MSP). They are also concerned about the upper hand that the huge agri-business companies and big retailers would have during the negotiations. They fear that the huge companies would easily dictate the price at later stages.

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No doubt that the government had the good intentions of making the agricultural market more competitive and cost-cutting. Moreover, the Bills in combo seek to attract Foreign Direct Investment (FDI) in the cash strapped agro-economy. But, good law must look into both positive and negative effects of the same. While the intention of the government is good, its practical ramifications might be dangerous. What if the essential commodities are hoarded giving rise to price hike? Cereals and pulses are included in our staple food. If they are not easily accessible at a lower cost, would it not compromise the food security of the masses? The government should come clear on this.

The Bill would substantially reduce the source of income of the states which are already staggering due to Goods and Service Tax (GST). What if the big retailers dictate price to the small farmers?

Already the small farmers are in a compromising position even though there is a Minimum Support Price (MSP) in APMC mandis. When the open market comes into force, would the APMCs exist for a longer run? There remains a doubt. The government should ensure legally that if a farmer wants to sell his/her produce in the APMC at Minimum Support Price(MSP), the state is bound to procure them to protect the small farmers.

By- Mokhjumi Ahmed

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