FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION BILL, 2020): A CRITIQUE

Author: Paikar Mustafa

Law Graduate, 2019

Law College Dehradun, Uttarakhand


INTRODUCTION

In an attempt to bring agricultural reform to the stagnating Agri-system and to boost the production and confidence of the farmers amidst the pandemic ensuing unprecedented National Lockdown, the Farm Bills were passed by the Parliament replacing the ordinance promulgated earlier during the recess of the parliamentary session. The Parliament passed the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020, and the Essential Commodities (Amendment) Bill, 2020. The passage of the Bills is met with massive uproar and protests terming the Bills as “Anti-Farmers” and “Arbitrary”. The series of protests started nationwide with opposition stirring the criticism and demanding taking back of the Bills as it is. However, amidst the protests, the Bills received presidential assent of September 27 to become Acts in the concluded monsoon session of the Parliament gaining their legal impetus.

There has been nation-wide protests and fulminations by several Farmers’ bodies and opposition equally targeting the ruling government for the totalitarian nature of the Bills recently passed culminating in calls for “Bandh”, “Rail Roko Agitation”, staged protests outside parliament, disassociation of parties from the NDA (ruling party of India) and many more events in the series. The major concern of the agitation are two Bills (now Acts) namely

The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill 2020 and the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020.

THE FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION ACT, 2020)

The statement of Object and Reasons pretty much clears the intention of the legislature behind the Act insofar the Act facilitates freedom of trade, open a regulatory system for the farmers to sell their produce in the market by abdicating the necessity of mediator, and to provide the farmers the effective and competitive environment. The salient features of the Act that attracted widespread controversy and criticism are:

1) It aims to increase the availability of buyers for farmers’ produce by allowing them to trade freely intra-state and inter-state beyond the physical premises of the Agricultural Produce Marketing Committee hold.

2) State governments are prohibited from levying any market fee, tax, cess, or levy outside the APMC periphery.

3) Reduced marketing costs for the farmers to get them better prices with electronic trading in the transaction platform to ensure e-trade.

4) Separate Dispute resolution mechanism for the farmers under the Act for redressing their grievances.

5) The Act brings in uniformity since it eliminates the mandate of market (mandis) regulation controlled by APMC constituted by different State legislations.

6) The Central government is given the power to frame rules and regulations under the Act.


EXISTING SYSTEM

Agricultural Markets in India are chiefly regulated by the State Agriculture Produce Marketing Committee laws which are made by the concerned State government. APMCs are marketing boards that have been established by States to safeguard farmers’ interests and prevent exploitation of them in the hands of large retailers, money lenders, and creditors. Thus, APMC ensures fair trade between buyers and sellers for effective price whereby all produce is sold in markets through auction.

Since the subject of Agriculture falls under the State List in the Constitution of India different states have different APMC Act and marketing committees to facilitate intra-state trade.

In 2003, the then Government passed the Model APMC Act that sought to bring reform by introducing new market channels such as private wholesale markets, direct purchase, and contract farming. However, not all states amended their Acts and only 16 states made amendments to their APMC Act. Later in the series of events, Model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 was passed. It set up market areas based on the geography of the state, promoted public-private partnerships in Agricultural Market produce, market boards were constituted, measures to prevent the sale of products from minimum Support Price, etc. It is pertinent to note that not all states have APMCs viz. Bihar, Kerala, Daman and Diu, Lakshadweep and Dadra and Nagar Haveli.


E-NAM

Launched on 14 April 2016 as a pan-India electronic trade portal linking Agricultural Produce Market Committees (APMCs) across the States to provide seamless online trading. It reduces farmers’ need to physically go to the wholesale mandis for selling their harvested agricultural produce.


Minimum Support Price

It is the minimum price set by the government at which farmers can sell their produce for the season. When market prices fall down than the declared MSP, the procurement agencies step in to procure the crop and ‘support the price’. Thus, the MSP ensures maintenance of a standard price rate to give farmers an adequate profit from their produce. The MSP is fixed on the recommendations of the Commission for Agricultural Costs and Prices taking into account several factors such as cost of production, demand, and supply, trade, input-output prices, etc.

CRITICISM OF THE ACT

1.) First haul of the criticism strikes on the point that the Act is beyond the legislative competence of the Centre since Agriculture is the State Subject, thus the Act happens to be in violation of federal structure.

2.) The absence of mention of MSPs relieves government of accountability leaving farmers at the mercy of their buyers which comprise of corporations and stockholders.

3.) Large scale stocking allows corporations to set rates lower than the Farmers.

4.) No statutory backing of the MSPs however the government declares MSPs for crops but no mechanism to mandate the implementation poses a big hurdle.

5.) The ousting of civil courts jurisdiction puts farmers at the disposal and mercy of the civil servants.

6.) Complete bypassing of APMC will leave farmers vulnerable to big food corporations thereby creating a blank for people to know of the price and trade of the commodity.

7.) Tax and levies free market will lead to the loss of revenue, since APMCs charge between 4.5% to 8% in mandi levies.

8.) The Act completely ignores the relation between farmers and intermediaries whereas the marginal farmers are provided loans, costs of cultivation and market space by the mediators, in absence of which the interest of marginalised farmers will be subsided.

OUTCOME

With the bolstering protests by farmers and farmers organisations along with the support of opposition the government has assured the farmers and clarified on the doubts created by the comprehension of the Act. The government clarified that the Act sought to create a parallel system along with existing ones thus creating a room for more demurral. For its part the government has declared the MSP for rabi crops and has displayed its intention to keep E-NAM sustaining. The reasons cited for the amendment are formation of APMCs cartel and failure of the states to implement model Acts. While to counter agreement of the constitutional competence, the government has cited that the Parliament has power to legislate on trade and commerce in food items which is enlisted in the Concurrent list, giving rise to the legislative competence. However, the Acts continue to face objections across the country more intensely in Punjab and Haryana. The passing of Bills into Acts is itself an indefatigable rendition composed of drama, chaos and outcry. No less than 8 MPs were suspended for their unruly behaviour in Rajya Sabha while the opposition calls the assenting of the President to the Bills as the “Black day for Democracy”.

CONCLUSION

The present Act along with other two Acts are not devoid of serious contentions that were raised. The demand of ante status quo seems to be roaring with an upsurging voice demanding amendment in their way. It is contended that the Acts are passed in hurry, without consulting the farmers and taking in consideration their opinions. Critics cite that the whole process of not referring the Bills to the standing committee for deliberation and making them law hurriedly shows the malafide intention of the current government in hasting the process. The decorum of the upper house presented a pitiful sight to the countrymen. The states ruled by opposition have made known their intention of deferring from implementation, how far can this be carried out totally lies on the constitutional arrangement which favours the law made by the parliament.

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