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Farm Bills

About Farm Bills

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What are Farm bills

On September 27, India's President gave assent to three farm bills passed by the Parliament a week ago.
 
What are the three farm bills passed by the government
 
Farmer's Produce Trade and Commerce(Promotion and Facilitation) Bill, 2020
 
Through this, farmers can enter into ‘written agreements’ with anyone, including a company, and sell them their produce for a set period of time, as per the contract. In other words, companies can now have contracts with farmers for buying produce. They can set the price for the produce, the standards and qualities, and other legalities beforehand.
 
The Farmer (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020
 
Food Bill: State governments can set up APMC (Agriculture Produce Market Committee), which in turn set up markets or mandis – in several places in the state. It is here that farmers bring their produce, and wholesale and retail traders come to buy the produce through auctions. The APMCs across the country ensure that farmers get a fair price for their produce, and aren’t forced to make a distress sale. The buyers and commission agents are regulated by the APMCs by providing them licences, levying market fees and any such charges are regulated. Now, the new Marketplace law says that farmers can sell their produce anywhere – and not just in the APMC approved marketplace. And they can sell inter-state or intra-state or even online.
 
The Essential Commodities (Amendment) Bill, 2020
 
The Essential Commodities Act was first brought in several decades back – in 1955. The Act basically controls the production, supply and distribution of certain commodities that are essential. So if an item comes under this Act – for instance a food item, or an important drug – then companies and supermarkets etc cannot hoard these items when there is shortage and they can’t artificially increase the price.
 
Provisions under the farm bills explained
 
Farmer's Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
 
* To create an ecosystem where farmers and traders enjoy the freedom to sell and purchase farm produce outide registered 'mandis' under states' APMCs.
* To promote barrier-free inter-state and intra-state trade of farmers' produce
* To reduce marketing/transportation costs and help farmers in getting better prices
* To provide a facilitative framework for electronic trading Opposition
* States will lose revenue as they won't be able to collect 'mandi fees' if farmers sell their produce outside registered APMC markets.
* What happens to 'commission agents' in states if entire farm trade moves out of mandis?
* It may eventually end the MSP-based procurement system.
* Electronic trading like in e-NAM uses physical 'mandi' structure.
 
The Farmer (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020
 
* Farmers can enter into a contract with agribusiness firms, processors, wholesalers, exporters or large retailers for sale of future farming produce at a pre-agreed price
* Marginal and small farmers, with land less than five hectares, to gain via aggregation and contract (Marginal and small farmers account for 86% of total farmers in India)
* To transfer the risk of market unpredictability from farmers to sponsors
* To enable farmers to access modern tech and get better inputs
* To reduce cost of marketing and boost farmer's income.
* Farmers can engage in direct marketing by eliminating intermediaries for full price realisation
* Effective dispute resolution mechanism with redressal timelines.
 
The Essential Commodities (Amendment) Bill, 2020 Provisions
 
* To remove commodities like cereals, pulses, oilseeds, onion and potatoes from the list of essential commodities. It will do away with the imposition of stockholding limits on such items except under "extraordinary circumstances" like war
* This provision will attract private sector/FDI into farm sector as it will remove fears of private investors of excessive regulatory interference in business operations.
* To bring investment for farm infrastructure like cold storages, and modernising food supply chain.
* To help both farmers and consumers by bringing in price stability.
* To create competitive market environment and cut wastage of farm produce.
 
Controversy around the farm bills
 
The Essential Commodities (Amendment) Bill, 2020
 
The list of Essential Commodities As per the original Act, includes these things:
 
Drugs (medicines), fertilizer, whether inorganic, organic or mixed; foodstuffs, including edible oilseeds and oils; yarn made wholly from cotton; petroleum and petroleum products; raw jute HI jute textiles; seeds of food-crops and seeds of fruits and vegetables; seeds of cattle fodder and jute seeds.
 
The new Essential Commodities Amendment removes foodstuff such as cereals, pulses, potato, onions, edible oilseeds and oils, from the list of essential commodities – unless there are dire circumstances, like a war or famine, or an “extraordinary” price rise.
 
Further, the new Amendment says the government cannot impose a stock limit – that is, it cannot stop a supermarket chain or any other retailer from hoarding – unless there is a 100% increase in price of perishable goods, or 50% increase in price of non-perishable goods.
 
Critics say that this Amendment will lead to increased hoarding, and an artificial price rise of things that you and I – and people much, much poorer than us, need every day. Rice, wheat, potatoes, onions, oils.
 
Controversy around the food bill
 
According to the government, the law will give Freedom of Choice to farmers. They will have a variety of marketplaces, the government says.
 
Critics, however, say that agriculture marketing is a State subject under Schedule 7 of the Constitution. Which means the Centre has no business making this law. Moreover, APMC markets currently ensure that farmers get the Minimum Support Price for their produce, which is a measly amount. Activists and farmers are worried that if they have to conduct trade outside of the APMC marketplace, they won’t even make this much.
 
While some people say that setting the MSP in the law is problematic because the MSP will have to change frequently, and changing the law again and again is a pain – others point out that the law can at least say that the trade will have to be above MSP. Experts are of the opinion that eventually, freedom of choice would mean nothing if they cannot protect their interests.
 
Opposition to Farmer's Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
 
According to the government, the contract  will protect and empower farmers to sell to anyone – a wholesaler or retail giant or exporter. They will have written contracts which will protect them if the buyer tries to cheat them, and they can sell future produce today.
 
Experts, however, say that 82% of farmers in India are small and marginal farmers that are likely to go to the court against massive supermarket chains
 
Critics point out that what happens if the buyer says the contract cannot be fulfilled because the quality of crop is not what was agreed – what protection does the farmer have then? There is no mention of a mechanism of fixing a price. There is also an apprehension that the free-hand given to private corporate houses could lead to farmer exploitation.
 

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