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Friday, September 25, 2020

New Farm Bills 2020 Explained: All About the 3 Farm Bills and Farmers Protest

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New Farm Acts

Govt. of India on 5th June 2020 brought 3 ordinances. These ordinances are associated with agriculture reform in which agriculture growth and farmers’ income are focused. These ordinances are:

1. THE ESSENTIAL COMMODITIES (AMENDMENT) ORDINANCE, 2020
2. THE FARMERS’ PRODUCE TRADE AND COMMERCE(PROMOTION AND FACILITATION) ORDINANCE, 2020
3. THE FARMERS (EMPOWERMENT AND PROTECTION) AGREEMENT ON PRICE ASSURANCE AND FARM SERVICES ORDINANCE, 2020.

Although these ordinances could lapse after 6 weeks of next reassembly of parliament, they were reintroduced in parliament in form of bills. Both the houses have passed them and now they have become acts. Let’s understand what these acts are:

1. The Essential Commodities (Amendment) Act 2020:
According to the act of 1955 of essential commodity, The Govt. of India could regulate the production, supply and distribution as well as trade and commerce of certain horticultural products whose availability and price are disturbed in the market. But according to the new amendment the govt. of India brought the following changes:

  1. The supply of such foodstuffs including cereals, pulses, edible oilseed, oil, potato and onion may be regulated only when some exceptional circumstances like war, famine, natural disaster and remarkable rise in the price. 
  2. The stock limits will be regulated only in case of price rise and the order for the same may be issued only under the following conditions:
    • If the retail price of the perishable foodstuffs increases 100 percent.
    • If the retail price of the non-perishable foodstuffs increases 50 percent.
  3. The price immediately after 12 months or the average of 5 years whichever is lower, will be considered for stabilizing. 
  4. Any order for stabilizing the stock limit will not be applicable to processors and value chain participants if the stocking capacity of their plant or factory, does not exceed the processing capacity of the commodity and in case of exporters if the stock does not exceed their demand for the export. 
  5. The Public Distribution System (PDS) or Targeted Public Distribution System (TPDS) will not come under the purview of stock limit order.

2. The farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020: According to this act farmers and traders have absolute freedom to sell and purchase agricultural produce. The farmers can sell their crops either intra-State or inter-State. They can sell their farm produce at whatever price they desire. Similarly traders also have the same benefits. They can trade in scheduled agricultural produce (Produce that could only be sold under the AMPC) with anyone throughout the India.

Structure of This Act 
  • Any trader can trade in scheduled agricultural produce in any state of India. For the same he should have a permanent account number (PAN). He may also set up an electronic trading and transaction platform in a trading area to make the trade easy but this platform should not violate the rules and regulations and should follow the guidelines. 
  • If any irregularity seems to be done by the traders with respect to electronic trading then govt. may take initiative and make rules. 
  • No state govt. has rights to levy market fee or cess on any farmer, trader or any electronic trading. 
  • The current APMC will continue and any state’s APMC act and other law of the State will be enforced for the time being. 

Dispute Resolution

  • In case of any dispute between farmer and trader, they can seek resolution by filing an application to SDM. He will refer their case to the Conciliation Board. 
  • The Conciliation Board shall consist of a chairperson and members not less than two and not more than four. 
  • If the parties are unable to resolve their dispute within thirty days, they may approach the Sub-Divisional Magistrate who takes cognizance of any contravention of the provisions and takes action and gives orders to settle the dispute. 
  • No party can approach the civil court in this matter and all the orders from the Sub-Divisional Authority will be at par with civil court. 
  • Any person aggrieved by an order may approach an officer not below the rank of joint secretary to the government of India within 60 days if somehow not able to do this he can approach the officer within 90 days but in this case he needs to give reason for the delay.

Penalties
  • If any party violates the provisions, shall be liable to pay a penalty of rupees not less than 25000/- and may extend to 5,00,000/- rupees. If any party continues the violation, the penalty may be levied to five thousand rupees for each day. 
  • If the person who owns, controls or operates an electronics trading and transaction platform, violates the provision of sections 5 and 7 shall be liable to pay a penalty which is not less than 5000/- rupees and can be extended to 10 lakhs rupees. 
3. The Farmers (Empowerment and Protection) Agreement on Price Assurance and farm Services Act, 2020: Through this bill farmers are allowed to have formal agreement with agri-business firms, processors, wholesalers, exporters and large retailers for their farm produce with profitable price. Earlier there was not any provision for contract farming and due to this big companies could not enter the farm sector but through this act big firms can do it now. 

Structure of This Act
  • A farmer may have a written agreement with terms and conditions related to the supply, quality, price and supply of farm services(farm services are those services which are required for farming and it can be  seed, pesticide or machinery etc.) for  his farm produce with any firm or organization. 
  • No rights of agri-business firms, processors or any large retailers will be exploited 
  • The minimum period of agreement shall be one crop season and maximum period of five years.
  • The central govt. may provide the guidelines and model farming agreement for the farmers to enter into the agreement. 
  • The price for the farm produce will be mentioned in the agreement and if the price varies during the process of farm produce then a guaranteed price + additional amount will be given to the farmer provided that a method to find guaranteed price and additional amount shall be annexed to the farming agreement. 
  • The Sponsor either in case of seed production, make payment of not less than two-third of agreed amount at the time of delivery and the remaining amount after due certification, but not later than thirty days of delivery or in case of other produce make the payment at the delivery.
  • The State Government may define the mode and manner for the payment. 
  • If a farm produce falls under the State act and is brought under the agreement of this act then it will be exempt from the State act and will remain intact under this act during the agreement period.
  • If a farm produce comes under Essential Commodities Act, 1955 or in any control order issued or in any other law for the time being in force shall not be applicable to this produce if it is being produced by the farmer under any agreement of this act.  
  • In the agreement the land of the farmers will not be subjected to any transfer, sale, lease or mortgage. Even if the sponsor sets up any temporary or permanent structure on farmer’s land, he is bound to remove it on his own expenditure and have to restore the land in its original state. He could let this structure as it is provided the farmer (owner) is agreed upon.

Dispute Resolution
Its rules are the same as in the farmers' Produce Trade and Commerce Act 2020.

Farmers’ Concerns

All over the India farmers are protesting with respect to these acts. They are afraid of being exploited in the hand of corporates. They are worried for each of the act and have following concerns:

The Essential commodity Act 
  • Farmers do not have storage facilities so they have to sell their produce as soon as possible as it may perish.
  • This act will encourage hoarding. It gives free hand to cartels to hoard agricultural produce which may not only increase the price of the commodity but it also leads to black marketing.
  • While farmers are not only producers they are also consumers. So they could be badly affected by the price surge. 
  • Cartels may play with the price and reduce it when they have to purchase it from the farmers and increase it when they have to sell it in the consumer market. Recent ban on onion exports creates doubt about it.
The farmers' Produce Trade and Commerce (Promotion and Facilitation) Act
  • As the small farmers could not move far away from their own main land they can do nothing but to sell their produce locally. 
  • MSP is another concern. Govt. did not assure of it in the bill. Farmers are worried that in future it can be abolished. 
  • Without MSP they have to sell their produce at what price available in their vicinity.
  • With the open market the APMC will lose ground and dissipate in near future and then corporate sectors may overtake the market and play with the price of the farm produce.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and farm Services Act
  • The farmers especially small farmers could not take care of legal procedure and big corporates can have upper hand in it. 

Experts Opinions

There are mixed views of the experts. While some of the experts and prof R.S. Deshpande who is former  Director of the Institute for Social and Economic Change is one of them, support these bills and make arguments that the open market will have a competitive environment and support the farmers in increasing their income.


Some of the Experts and P Sainath, a journalist who writes on rural affairs and poverty one of them say that the act seems good but intention behind it seems otherwise and could affect the farmers badly. They argue that a very small farmer mainly from a tribal area who hardly produces 2 to 3 sacks of farm produce cannot survive in this open market. He even could not be able to get the MSP of its farm produce. They are in favor of modification of APMC and want to have a good storage facility for the farmer so that they can store their farm produce for the better price of the crop. They give examples of Bihar where APMC does not exist and have competitive markets but the farmers still get much lower price for their crops than Punjab and Haryana where APMC exists.

Many farmers unions support the new acts and amendment while most of them 
including All India Kisan Sangharsh (AIKS) and Bhartiya Kisan Sangh (BKS) which is affiliated to Rashtriay Swayamsevak Sangh are demanding a clause to add MSP which assure the basic income to the farmers.

Congress and some opposition parties’ stand

Congress and other opposition parties are fighting tooth and nail to either revoke these acts or bring some changes to make the MSP compulsory to purchase the farm produce. For the same they are boycotting Rajya Sabha and even call for Bharat Band on 25th Sep.

Allegation 

Govt. argues that agitations are only held in Punjab and Haryana as the number of Arthi in these states is very big. They are commission agents. Only they are holding protests just because their existence is on the stack. 

Resolution 

The whole protest against the 3 acts could be stopped if the govt. brings only one modification in the new acts which make MSP compulsory to purchase farm produce. But it is all up to the govt. how they will persuade angry farmers. 

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