An Overview of Farm Bills, 2020
Author- Tushar Srivastava
Editor- Simmy Vashist
The three newly legislated farm acts by the Indian Government have been extensively acclaimed inside and outside the nation as historical and long overdue. However, some states, stakeholders, including farmers, have all been indulged in not so peaceful protests against them and with the view of seeking their withdrawal.
Shri Ram Nath Kovind, the president of India, gave his final approval to the three farm reform bills- The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, and The Essential Commodities (Amendment) Bill on 27th day of September 2020. The parliament, in the Monsoon session, had passed these bills. Mr. Narendra Modi, the Prime Minister of our nation, on the passage of these bills exclaimed it to be “A watershed moment in the history of Indian agriculture!”
The Union government enacted two new farm laws for agriculture and modified the Essential Commodities Act, 1951 for agri-food stuff in September 2020. The new acts have been widely acclaimed as historic, path-breaking, and a “1991 moment” for agriculture.
The major concern of the protests of several people is the likely dilution of the role of a small number of middlemen in agricultural marketing, ignoring the benefits to crores of farmers.
There was a dire need for the Farm reforms to protect and further empower the farmers. Furthermore, the whole COVID situation threw formidable challenges to the economy, which could only be addressed by the means of bold and courageous policy decisions having the potential of converting challenges into opportunities.
This article gives an overview of all the Farm Laws to make readers understand what are these acts that the government has passed.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act 2020 or The Market Place Law
The FPTC Act, enacted by the Central government, gives our farmers, the freedom to trade the produce at any desired region in the national boundaries––within APMC mandis[i] or outside them. The new law also allows the setting up of an electronic platform for the trading of farm produce to promote e-commerce[ii] in agriculture. There is also a provision in the Act to prescribe modalities for the purpose of registration of traders and trade transactions in trade areas. Thus, if the work of the new system is unsatisfactory, the government can intervene to regulate the system. Conforming to this new marketplace law, farmers can sell their products anywhere and not only in the mandis approved by APMC or market places, which means they can sell within the state or outside, or online. As stated by the union government, this law has been brought in to give freedom of choice to farmers to sell their produce from a variety of options available in the form of various marketplaces. The government claims, this is actually going to prove to be a boon to the farmers because they have several options to choose from.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act 2020 or The Contract Farming Law
According to this Act, farmers may enter into ‘written agreements’ with anyone, including a company, and sell them their products for a mutually decided span of time, as per the words of the contract. In simpler words, companies can now enter into contracts with farmers for buying their produce. The price can be set by them for the production and the standards, qualities and other legalities can be mentioned in advance. As stated by the Union government, these set of rules will not only protect the farmers but also empower them to sell the produce to whoever they want- wholesaler, any exporter, or retail giants. The written contracts will be with the farmers which will protect them from any sort of cheating. This new Act shifts the balance in the favour of farmers. It removes the complicated system of registration and licensing, deposits, and various other compliances in contract farming provisions in various states.
The power to make rules for carrying out provisions of the Act lies with the State government, such as registration of a farming agreement. The Act keeps scope to remove any difficulty in giving effect to the provisions of this Act.
The Essential Commodities (Amendment) Act 2020 or Essential Commodities Amendment
The Act was first brought into light back in 1955 and further. The Act broadly controls the production, supply, and distribution of certain commodities that are considered to be essential. So, if an item comes under the Essential Commodities Act, for instance, a food item or an important drug/medicine, then companies and other private markets/supermarkets cannot hoard these items in a crisis, and also there cannot be an artificial increase of the prices of the goods. The Essential Commodities Act has been modified for agriculture and foodstuff, including cereals, pulses, potato, onion, edible oilseeds, and oils. According to the modification, the Central government may regulate the supply of the above-mentioned commodities only under extraordinary circumstances, which may include famine, war, extraordinary price rise, and/or natural calamities. This means that the above-mentioned commodities will no longer come under the essential commodities list. The modification lays down a transparent criterion on imposing or regulating stock limit, which is a 100% increase in the retail price of horticulture produce or 50% increase in the retail price of non-perishable agri-food stuff over the price prevailing in the preceding year or an average price of last five years, whichever is lower.
In a nutshell, the three policy reforms undertaken by the Central government through the three new Acts are in accordance with the ongoing revolution and necessities of farmers and farming. The right spirited implementation of the acts will take Indian agriculture to a higher level and escalate the transformation of the rural economy. The optimism has been generated for India to become a global power in agriculture and a powerhouse for global food supply through these reforms. They carry the seed for the purpose of farmers’ prosperity and transformation of the rural economy further making it a growth engine of our nation’s economy.
As of now, the Apex Court of India has stayed these amended acts and has initiated attempts to closely analyze and introspect these controversial bills. It is expected that the drawbacks inherent in these acts would be appropriately addressed. Nevertheless, the Republic Day violence has caused nationwide criticism against it but that does not imply that the farm laws be considered negligently.
1. [Online] https://www.latestlaws.com/articles/a-critical-analysis-of-the-farm-bills-2020/.
2. [Online] https://thecompass.in/farm-laws-corporate-greed-rules-over-agrarian-dignity/.
Endnotes: [i]https://indianexpress.com/article/explained/explained-ideas-how-apmc-markets-went-from-being-a-solution-to-a-problem-6864862/ [ii]E-commerce or electronic commerce is the process of buying and selling goods and services, or the transmitting of funds or data, over an electronic network, primarily through the internet.
*The Author is a student at Amity Law School
Disclaimer: The opinions and views in this article are personal and independent opinions of the author. VAIDHA doesn't hold any liability arising out of this article.