The Farm bills is a revolution towards making farmers Atmanirbhar

 “Revolutions are never created by poor people. They are actually created by middle-class people. They are created by people who are educated to have opportunities. But these opportunities are blocked by the political or economic system.” – Fukuyama

Recently Modi govt has succeeded in passing three farm Bills in the Lok Sabha and the Rajya Sabha. The bills was passed in the current session of Parliament.

Agriculture in India is highly fragmented because of its small holding sizes. It highly depends on weather. There also exists production uncertainties and market unpredictability. Thus, agriculture is highly risky here and inefficient in input & output management. Thus, these bills has been introduced in order to transfer the risk of market unpredictability from the farmer to the sponsor.

What are the Newly Passed Agriculture Ordinance in 2020?

Bill 1 - Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020

This farm bill 2020 let the intra and interstate farmers produce even outside the premises of APMC markets without paying any extra market free, cess or levy as State governments are prohibited from levying any of those.

How does it help?

• Removal of barriers for Intra/ inter-state business of agricultural products.
• Farmers can sell their product to anyone coming from anywhere.
• Seamless electronic trade is supported here.
• Encourages ending the monopoly of traders.
• Increased competition among consumers or buyers.
• Farmers get better and return thus increasing income rate.
• Free movement of agro products from surplus to deficit regions.
• This farm bill 2020 creates a national market.
• End consumer gets better items at cheaper prices.

 

Bill 2 - Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill 2020

This farmers bill 2020 aims for framing contractual farming between a buyer and farmer, through an agreement. This should be done before the production of any agro product. Three-tier dispute settlement framework is provided here – Sub-Divisional Magistrate, the conciliation board and Appellate Authority.

How does it help?

• This agriculture reform bill opens the window for farmers to enter into agreements with large buyers, retailers and exporters.
• Farmers get to know the price before starting sowing.
• The market risk gets transferred to sponsor from farmers.
• High-quality seeds, pesticides and fertilisers can be availed by the farmers.
• Private investors will be interested in farming.
• A door to the global market.

 

Bill 3 - The Essential Commodities (Amendment) Bill

This agriculture ordinance 2020 empowers the Government of India to control the supply of particular agro-food products under unusual situations like war. In case of a steep hike of price, stock limits can be applied on farm products.

How does it help?

• Many agro foods like pulses, onion, potatoes, oilseeds, cereals, and edible oils are removed from the essential commodities list by this farm bill 2020.
• Except under unusual circumstances, this newly passed agriculture bill does away with the imposition of stock limit.
• Business and traders get rid of harassment.
• With the improvement of storage facilities, the wastage rate is likely to get reduced.
• This latest agriculture policy aims for a stable price which will eventually help in raising farm incomes.

The bills are aimed at transforming agriculture in the country and raising farmers’ income and is to make way for creating the "One India, One Agriculture Market’. Also the law intends to end the monopoly of Agriculture Produce Market Committees (APMCs) in carrying out the trade of farm produce in the country.

But many opposition parties including the congress, are opposing the bills. And misleading the farmers by spreading misinformations. Let’s bust their myths with facts –

MYTH - The bill does not provide any price guarantee for farmers. The practice of procuring grains at MSP by central agencies like FCI will end.

FACTS -  The bill ensures a price guarantee for farmers under the agreement and provision for a penalty in case of payment failure. Further, MSP is an independent structure which will not be impacted by the bill.

 MYTH - The commission agents under APMC are verified and payment is secured. The bill doesn't safeguard farmer payments.

FACTS -  The Bill mandates every trader to make payment to the farmer on the same day or within maximum three working days.

MYTH - Farmers will be destroyed by the Government by getting them into contracts with big corporates.

FACTS - Contract farming has been implemented by many states in the past several decades. Other states have also passed separate Contract Farming Acts.

MYTH - The bills are anti-farmer without any protection to them.

FACTS - The safety net of MSP will remain. Also govt increased the MSP price for Rabi Crops. These bills will add to the options the farmers have Farmers will be able to enter into direct agreements for sale of produce with food product companies, etc.

MYTH - The Government wants farmers to sell their lands to capitalists.

FACTS - Farmers have been provided adequate protection in the bills. sale, lease or mortgage of farmers' land is totally prohibited and farmers' land is also protected against any recovery. Also effective dispute resolution mechanism has been provided for with clear timelines for redressal.

MYTH - Farm bills are a conspiracy to phase out the safety net of Minimum Support Price (MSP) to farmers.

FACTS - Farm bills are not going to affect MSP at all. The MSP system will continue. Farm bills are creating additional trading opportunities outside the APMC market yards to help farmers get better prices.

MYTH - The bill invades on the rights of state Agriculture Produce Marketing Committee (APMCS)

FACTS - The bill does not intrude into premises under the APMC Act and the same may continue to operate in the State.  Also the Bill allows for additional trade outside the APMC premises.

MYTH - Agriculture is a state subject & hence, the bill is illegal. Instead of farmers & the rural economy, it will only benefit corporates.

FACTS - The 7th Schedule & The Constitution of India mentions that the Union government can legislate in this domain in the national interest. Farmers under the agreement have multiple advantages including guaranteed higher income.

MYTH - The bill will block states to generate agriculture revenue which will lead to the closure of APMCS, eventually giving corporates monopoly on agriculture trade.

FACTS - The APMC market premises will continue to operate & attract farmers and generate revenue. The bill allows for the development of new mandi infrastructure closer to farm gate improving market access & reducing logistics costs for farmers.

MYTH - Central Government is nullifying the APMC law enacted by the various State Governments.

FACTS - The Farm Bills do not encroach upon in any way the APMC Act, which is an Act of the States.  Trade happening outside agriculture markets will be covered under the new law.

MYTH - The bill will lead to agriculture land acquisition by corporates and farmers will end up becoming labourers.

FACTS - The Bill prohibits sale, lease and mortgage of farmers land and ensures sponsors are prohibited from acquiring ownership rights or making permanent modifications on farmers' land.

MYTH - The bill does not provide a legal safety net for farmers against corporates.

FACTS - The Bill provides for dispute redressal mechanism where farmers can approach the concerned Sub-Divisional Magistrate for deciding any disputes under farming agreement. Also the bill ensures no action is initiated for recovery of any dues against the agricultural land of the farmers.

Conclusion

India has surplus agri-commodities in most of the cases, farmers still are unable to get better prices. It is because of poor investment in storage and processing facilities. The bills has been introduced to pull investment in cold storage and modernization of food supply chain.

Earlier, the farmers in India suffered from various restrictions while marketing their produce. Selling the agri-produce outside the notified APMC market yards were also restricted. They could sell the produce only to registered licenses of the State Governments. Further, flow of agriculture produces between various States under the APMC legislations was not barrier free.

Thus, this bill is a historic-step to unlock the highly regulated agriculture markets in the country. Farmers will be open up to more choices. Also It will empower farmers to engage with processors, wholesalers, aggregators, wholesalers, large retailers, exporters. It will also create a level playing field without fear of exploitation. It will also reduce marketing costs and double the farmers income. The legislation will also act as a catalyst to attract private sector investment for building supply chains. As a result, Farmers will get access to technology and advice for high value agriculture.  Farmers will be engaged in direct marketing.