Farmer’s Bill

Agriculture in India
We are all aware of the fact that the agriculture plays a vital role in generating revenue for our country and is of highest importance in the Indian economy. Over seventy percent of our rural households are extremely dependent on agriculture and this domain contributes to 17% of the GDP of India. Agriculture is the backbone for 60% of the population as it provides employment to such a huge population.

Bill overview
On September 2020, the president of our country Ram Nath Kovind gave his agreement or assent to three farm laws. These farm laws which was intended to make the lives of the farmers easier and enable the diversification of sales, are said to have loopholes and are not being accepted by the farmers of our nation. Hence, the farmers from the north and around the country had started protesting against this bill by gathering at the national capital border, which is still continuing today. Currently, the Supreme Court has put the decision on hold. But, before knowing the repercussions or the impact on farmers, let us first understand what these laws actually are and what do they signify.

Life of farmers in India
Since ages our hardworking farmers have been a price takers. They have been procuring raw materials like seeds and fertilizers and pesticides on market price and selling their produce in a wholesale price. After 1947, zamindari system was abolished and the farmlands were broken into smaller divisions. The servants or labourers became the owners of these smaller farmlands. But because of this the farmers could not have a bargaining power, since their produce quantities are smaller. The traders used this opportunity to their advantage and used to lend money to the farmers and after harvest they used to get the produce at a wholesale price. Hence the farmers couldn’t get the price they deserved for their crops and remained poor. In 1960s, with the advent of green revolution, several amendments were brought in one of which was APMC/ mandis. There was a rule that the farmers can go there and sell their produce and the traders can gather and buy the crops and vegetables from them. They used to negotiate with the farmers and come to a price. But later the traders formed a union and decided on a subsidised price because of which again the farmers had to bear the pain of not getting a fair price for their products. In this article, I am going to explain these three bills in detail without any bias.

Intent of the government behind passing these bills
So what is the intent behind proposing this bill? Previously the farmers could sell their produce in mandi’s, but after the release of these bills, as per the current government, these three bills will help small and marginal farmers by allowing them to sell produce outside mandis. These bills will also allow them to sign agreements with agri-business firms and companies directly; and doing away with stock-holding limits on key commodities.

Intent of the government behind passing these bills
The first one is:
1-Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020
This act creates an ecosystem for farmers and traders where they have the liberty to sell and purchase farm produce wherever they wish to. It also promotes free inter-state and intra-state trade without any barrier like tax. This act is intended to reduce transportation costs for farmers and help them get better prices for their products. There is a speculation that it may eventually end the MSP-based procurement system.

The Second one is:
2. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020
This bill says that the farmers who used to sell their produce in Mandis or APMC, can sell anywhere. Companies can form a contract with the farmers even before the harvest. Contract farming has an advantage where the prices are decided prior to harvest. So even at the time of harvest if the prices of those products fall in the market, the farmers will get the price that was decided between the two entities and vice versa. This seems like a win-win situation. Here the intermediary middlemen will be eliminated and if the companies fund the farmers at the initial stages, then they won’t have to take any loan.

The Third one is:
3.Essential Commodities (Amendment) Act, 2020
The Essential Commodities Act was initiated several decades ago roughly in the 1950s. The Act basically controls the production, supply and distribution of commodities that are classified as essential. During our lockdown, the products like masks and sanitizers were also classified as essential commodities. So if such an item falls under the purview of this Act – for example food items that are high in demand, an important drug or an equipment – then companies, hypermarkets and supermarkets cannot stock or hoard them when there is shortage and they cannot artificially increase the price. The ever-fluctuating prices of onions are the best example. So if such items are exempted from being stated as essential commodities, It will do away with the imposition of stockholding limits on such items except under "extraordinary circumstances" like war or famine. It will enhance the improvements in cold storage and supply chain. It will also create a competitive environment and cut wastage of produce. So these are the three bills and their provisions stated by the government. Hopefully, the protests come to an end and both the entities i.e the government and farmers understand each other and come to a common consensus.

Written By: Anuradha Iyer

5 thoughts on “Farmer’s Bill”

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