Are Farm Bills 2020 Anti- Farmers?


They are not the farmers they are our life saving armors. If they don’t produce wheat, then what would we eat. If they don’t produce rice will we soothe our hunger by licking the ice. Thousands of them are committing suicide, across the country having unearthly pride. They need to live long, they need to be heard. Agriculture reforms 2020 refers to three bills passed by Indian parliament. On June 5, three ordinances were proposed by central government namely - The Farmers Produce Trade and Commerce Bill, 2020, The Farmers Agreement on Price Assurance and Farm Service Bill and The essential commodities amendment bill, 2020. Farmers in India have been protesting since the day these bills were passed. How is agriculture market in India is regulated by APMCs? In India, Agriculture Produce Market committee is established by state government to safeguard farmers from exploitation by retailers. Under APMC regulation, state is divided geographically and mandis are established at various places APMCs have licenced middlemen who buy from farmers at the price set by auction and then sell to retailers The primary objective of APMCs is to ensure a equal and fair trade between farmers and retailers. APMCs ensure that farmers are not exploited by big retailers. The functions of APMCs include regulating trade, issuing licenses to agents, keeping a check on market fees, improving market infrastructure and having special markets for perishable items The Farmers Produce Trade and Commerce Bill (Promotion and Facilitation), 2020 This bill allows intra and inter-state trade of farm products. This bill talks about trading of farm products outside the Mandi and APMC yard i.e. before this bill was passed the trading of farm produce was done in warehouses, cold storages and mandis. This new act will allow farmers to sell their produce outside the state like a farmer from Punjab can directly sell his produce in Rajasthan, UP etc. This will allow barrier free trade from one state to another and state government will not be imposing taxes on trade from one state to another. This bill will be beneficial for big farmers as it will lead to increase in number of choices for them to sell their produce. Farmers can eliminate middleman and can directly sell to large institutional buyers at prices set by mutual agreement like MSP set by government is 2000, at APMC mandi it can be sold at 1850-1900 while to large institutional buyers it may be sold at 2100- 2200. The Farmers Agreement on Price Assurance and Farm Service Bill, 2020 The title of the bill provides for protection of framers from price fluctuations. This bill proposes contract farming i.e. this allows farmers to enter into agreements with large buyers to produce a crop for pre-arranged price. In cases of bumper produce it will be a boon for the farmers as for example in agreement the price set for a particular produce is 1000 and due to bumper produce the prices have gone down then the farmer will be assured by the price set in agreement earlier. This bill protects the farmer from price fluctuations by business owners. Suppose price was set at 1500 and after examining the produce the business owner says that it is not of good quality and he will not pay 1500 for this produce. then this can come to the rescue and the resolution of dispute between the farmers. The legal agreement between farmers and business owners will specify the conditions for the produce and delivery requirements. The essential commodities amendment bill, 2020 The central government makes an amendment in the existing bill. The essential commodities are the things which if are illegally stored will effect the normal working of people by creating artificial demand like medicines, essential fruits and vegetables. for ex there is shortage of potatoes in the market as a lot of retailers has stored them. This creates artificial demand and the prices are increased to curbe the situation. This amendment proposes economic agents to store food articles and has removed certain commodities from the essential commodity list and those commodities are cereals, edible oil, pulses, onions and potato which will be regulated by government only under extraordinary circumstances i.e. war, famine, extraordinary price rise and natural calamity of grave nature. This increases the chances of hoarding. It has been said by government that the government will only interfere if there is an increase in price by 50% for non- perishable items and for perishable items the increase in price should be 100% to bring it back to essential commodity list. Why are farmers protesting ? These acts will not be much helpful for farmers as it seems. Farmers can eliminate middleman and sell directly to private companies. This exposes farmers to corporate market which have high bargaining power and resources than them for example MSP for a particular product is 2000. That product can be sold in APMC market for 1900 but farmers do not have the option to sell the product in APMC market and the businessman says that he will buy the product only for 1600, ultimately leading the farmer at loss because majorly in India farmers own less than 2 hectares of land which makes it difficult for them to negotiate with large scale buyers. Trading directly with large scale buyers will ultimately lead to removal of APMCs as to maintain the market the government also has to bear cost and if there is no trade in that market then why will the state government be spending its revenue in maintaining that. Removal of geographical restrictions that is allowing inter and intra state trade will result in exploitation of small farmers as it would be difficult for farmers to avail better prices due to constraints on travel and storage. Their will be no control of government over prices set by private companies. Big companies follow the strategy of giving discounts to establish themselves in the market but this is not every time successful. To establish their company in the market they will give farmers a good price for the produce which will decline over a period of time as the companies also have to look at their profit margins. Farmers are worried that contract farming will lead to removal of MSP. There will be no control of a minimum price on private contracts like if MSP is 1800 then the minimum price in private contract should also be 1800. Farmers are also worried of artificial price fluctuations as removal of farm products from essential commodity list will result in unlimited hoarding and this hoarding will make farmers to agree on lesser prices. Three bills are in favour of private companies rather than empowering farmers. Government can link MSP with contract farming so that farmers should get a minimum of price set by government while negotiating with large companies. MSP should be made a legal right. According to surveys and reports by government, only 6% of the farmers can sell their produce at MSP. So there is the need to strengthen MSP. APMC reforms are needed but not its removal. Conclusion In Indian Agriculture Sector investment is needed from Government not private sector. There is a need to increase the standard of living of farmers. The three bills being passed by government can be seen in two ways. Firstly, private markets will lead to higher price for produce and better standard of living of farmers. Secondly, no support of government to farmers even not in the form of MSP will lead the farmers at the mercy of corporates. The second reason has made the farmers to come out on streets and protest against it.

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