Farm Bills Explained: Facts Vs Myths

December 15, 2020, The Liberacy:- Farm Bills, which are currently the point of tussle between farmers and the government was introduced and passed by the parliament during the Monsson session amid the Covid19 pandemic. All three farms bills were in circulation first as ordinances promulgated by the President of India on 5th July 2020, and then took shape of bills after the expiry of the ordinance period.

Amid the tussle between farmers and the Indian government the opposition and many non-social elements, including foreign leaders such as Canadian Prime Minister Justin Trudeau has tried to take a political advantage to fulfill their vote bank politics.

But, the question is,
What is inside these Farm Bills?

📣 The Liberacy is now on Telegram.
Click here to join our channel (@the_liberacy)
and stay updated with the latest News.

The Three Bills that were passed by the Parliament of India were,

1. THE ESSENTIAL COMMODITIES (AMENDMENT) BILL, 2020 (Bill No. 111 of 2020)
2. THE FARMERS (EMPOWERMENT AND PROTECTION) AGREEMENT ON PRICE ASSURANCE AND FARM SERVICES BILL, 2020 (Bill No. 112 of 2020)
3. THE FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION) BILL, 2020 (Bill No. 113 of 2020)

Let’s go through the bills one by one,

1. The Essential Commodities (Ammendment) Bill, 2020.

This bill is not a new bill, but an amendment to the Essential Commodities Act, 1955. It has inserted sub-section 1A after sub-section 1 in section 3 of the 1955 Act.
It states that the said foodstuffs can be regulated by the Central Government by publishing a notification in the Official Gazette, the said regulation can ONLY be under extraordinary circumstances which may include war, famine, extraordinary price rise, and natural calamity of grave nature.

Any action on imposing stock limit shall be based on price rise, which can be regulated only if there is a 100% increase in the retail price of horticultural produce or a 50% increase in the retail price of non-perishable agricultural foodstuffs (the products that have a long shelf life), these prices will be decided over the price of last twelve months or average retail price of last five years, whichever is lower.

These orders of regulation will not be applicable to a processor or value chain participant if that person has not exceeded the overall ceiling of the installed capacity limit of processing or the demand for export in case of an exporter.

Conclusion:- The above first Farm Bill doesn’t concern the farmers and is in place only for the regulation and availability of the product all over the year, reducing any chance of panic or scarcity. This bill rightfully eliminates the unnecessary price hike issue due to hoarding, as the government will look after any irregularities at their own level for the benefit of people.

📣 The Liberacy is now on Telegram.
Click here to join our channel (@the_liberacy)
and stay updated with the latest News.

2. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020.

This bill has introduced a new concept of farming in India i.e Contract Farming, and has enumerated the clauses and procedures with appropriate guidelines.
This bill will open the doors for the farmers to produce agri-products for the food giant companies, and this bill gives a regulatory framework for such an agreement between the farmer and the company on the cultivation.
Contract Farming is Voluntary, and for others, the APMC will always be available.
For assurance, clause 2 section 1 defines the definition of APMC inside the bill itself, which means the APMC will NOT be discontinued.

The pricing, sale and purchase, mode of transactions, exemptions, termination of the agreement are also defined in the bill.

The big concern of the farmers was the chance of false acquiring of their lands by these companies. hence the Clause 8 of the bill defines that agreement will only be on the crops produced of that season and can never include land of the farmer.

This bill gives a win-win situation for both, the farmers and the companies, for example,
PepsiCo has a brand of chips called Lay’s, and they need potatoes of a particular grade for their production. Hence, Lay’s can give seeds and other production-related equipment to the farmer and get the desired grade of potatoes. All these processes and steps will be included in the agreement under the supervision of a Registration Authority with rules specified by the state governments.

The bill in Chapter 3 also gives out the process of dispute settlement, if any such case arises.

Conclusion:- This bill aims at improving the income of the farmers by partnering with big food companies for their benefit and has closed doors for any middleman of APMC and any unusual cess by the state governments. This bill should be seen as a step taken for the future and should be welcomed.

📣 The Liberacy is now on Telegram.
Click here to join our channel (@the_liberacy)
and stay updated with the latest News.

3. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020.

The Bill, also known as FPTC Act is the main ground of dispute between the farmers and the Central Government which has dragged the chief ministers of some states in it because this bill gives permission for the sale and purchase of farm produce outside the premises of APMC mandis.

The state governments oppose this as the transaction done outside the APMC mandis will give no market fee, cess, or levy to the state governments, but will give freedom to the farmers to sell their produce at higher rates without worrying about market middleman and bribes taken by them.

Farmers have seen this as weakening of mandis and promotion of private monopoly and has worried them about timely payments from those buyers outside mandis and a resolution of such disputes on the judicial basis with fixed MSP all over India or even MSP as a legal right.
To this, the government has given written assurance of Judicial involvement and MSP remaining in place with government purchase like before.

Conclusion:- This bill has the main concerns of security of payment with proper MSP if sold outside the APMC mandis. But, with written assurance by the government, this can be overruled but a proper permanent solution can be achieved by some more amendments to the bill.

The legality of the Farm Bills

The opposition has accused the government of the violation of constitutional validity of the Bills and raised questions on the government’s very right to enact legislation on Agricultural Marketing.
Here we take a look,

Article 246 of the constitution takes “Agriculture” in entry 14 of the state list & “Market and Fairs” in entry 28 of the state list. But, entry 42 of the Union list empowers the Centre to regulate “Inter-state trade and commerce”

Entry 26 of the state list allows the state of carrying trade and commerce “within the state” but it is subject to entry 33 of the concurrent list that permits the Centre to make laws that would prevail over those enacted by the state governments.

Hence, the constitutional validity of all the three farm bills cannot be the ground for removing it. But, yes cases can be filed and any interpretation can be considered.

The farm bills can be considered as a step taken on improving the per capita income of the farmers, but the government should also consider amending the points of FPTC Act with the written assurance they have already given to the farmers.

📣 The Liberacy is now on Telegram.
Click here to join our channel (@the_liberacy)
and stay updated with the latest News.