Farmer’s Act 2020 Who Gains and Who Loses?
After Parliament passed three contentious agricultural bills, it was seen a massive farmer’s protest against the three ordinances in various states. Union minister Harsimrat Kaur Badal also resigns over the issue in protest.
The Opposition- congress party called the bills ‘BLACK LAW’ and ‘Pro Corporate’. It’s top leader Rahul Gandhi accused Modi of “making farmers ‘slaves’ of the capitalists.” The protest has been the most intense in northern states of Punjab and Haryana.
WHAT DO THE THREE ORDINANCES SAY?
1. Farmers Produce Trade and Commerce (Promotion and Facilitation), Act,2020
It allows trading in an ‘outside’ trade area like farm gates, factory premises, warehouses, silos and cold storages. Earlier the agriculture trade was conducted only in the APMC i.e. Agriculture Produce Market Committee/ Mandis.
This act also permits electronic trading in the specified trade areas. The Act prohibits any market fee or a cess on farmers, traders and electronic trading platforms. The Government aims to put this ordinance as “one Nation, one Market”.
2. The Farmers (Empowerment and Promotion) Agreement on Price Assurance and Farm Services Act, 2020,
It provides a national framework for contract farming through an agreement between both the parties i.e. farmer and buyer before the production of any produce. Under, this ordinance the farmer broadly signs the contract to sell their produce on the basis of parameters set by his crop standards. Which helps farmers in sale of future farming produce. It also provides separate dispute resolution mechanism for the farmers.
3. Amendment in Essential Commodities Act, 1995,
Under the new amendment ‘agricultural products’ like cereals, pulses, oilseeds, edible oils, and potatoes have been removed from it.
Providing the condition, that the ordinance will not be applicable in the event of a national disaster or emergency.
The Government enacted this act to curb the black marketing as many money lenders and businessmen were engaged in illegal traffic that take place outside government sanctioned channels. They were used to buy crops at affordable prices and store them in large numbers to sell at the time of shortage charge huge prices to earn profits.
REFERENCES:
· Here’s why Farmers are Protesting- The Three New Agriculture Ordinances, by Vaibhav Palnitkar, september21 2020, The Quint
· Why are Modi Government’s “Farmer- Friendly” Laws Facing Protests? by Vishwa Mohan, September23 2020, Times of India
· September30, Wikicleaner Bot
WHY IT AFFECTS FARMERS THE MOST?
Earlier the farmers were used to sell their produce to APMC or Mandis directly, and there was not that need to store it for some time. Since the Parliament has enacted this legislation farmers are of the view that they are not having storage facilities, so how can they store their produce for months on end? Further they protest that because they are not having storage facilities, so they have to sell their produce at the rates which are unsuitable for them.
The bills further state that the farmers can come into an agreement with private companies but as there are so many conditions attached to it, it will be difficult for them to cope.
They believe to be in mercy of commission agents, who lend them money for farm and personal expense. Each agent has at least 50–100 dependent farmers.
REFERENCES:
· Why Are Modi Government’s ‘Farm Friendly’ Laws facing protests? By Vishwa Mohan, Times of India, September23 ,2020
· Why Indian Farmers are Protesting Against New Farm Bills, September25,2020, Aljazeera
AIM OF THE GOVERNMENT BEHIND THESE ORDINANCES:
Government’s main aim was to help farmers by providing free market trade, by removing barriers to sell produce only to APMC or Mandis. Also, the government is of the view that the farmers will get better prices through the competition cost- cutting on transportation. Government intends to help those farmers who are not having means to either bargain for their produce to get a better price or invest in technology to improve the productivity of the farms.
REFERENCES:
· Everything You Need to Know About the New Farm Laws, by ET online, october21,2020, The Economic Times
WHO GAINS OR WHO LOSES?
Who is in the benefit?
Farmers are in the benefit of the same as the bills provide the provisions which in turn will be profitable for the farmers. The government has repeatedly said that, these bills are enacted with an aim to provide “Farm — Friendly” laws which will revolutionaries the lives of the farmers. The government has however continued the MSP (Minimum Support Price) policy by asserting that “MSP was, MSP is, MSP will continue in the future”. The government has further assured that these bills will be helpful for the farmers in expanding their connections with the big traders and exporters. Moreover 16.6 million farmers are there in India out of which 131,000 are traders registered on platform until May2020. Over 1,000 Mandis are linked to e-NAM and 22000 additional Mandis are expected to be linked by 2020–2021. As more than half of the population of India are connected with the agricultural activities so the initiative taken by the government also benefits the economy as a whole.
Agriculture sector is a very important sector of Indian economy as it contributes to 17% of India’s GDP. So, the outcome of this will be very fruitful for the country. If the farmers wealth will grow then the GDP of the country also improves, and there will be an economical growth. So, it is concluded that the above laws not only are beneficial for the farmers but also for the country.
The Union Minister, has also gave his assurance on State APMC Act by stating that, “APMC will be in the state but there will be inter- state trade outside its periphery and farmers will be able to sell their produce from their field, home and any place after the legislation comes to existence,” he said.
What benefits does the farmers will get?
Freedom of Trade: The restriction to only sell their produce to APMC or Mandis or to any other establishments which comes within the ambit of their trade area is removed after the enactment of Farmers Produce Trade and Commerce Act, so now farmers are in position to sell their produce wherever they want, as per their will.
Freedom of Choice: Farmers have freedom to choose their buyers. It is apprehended that they will get better deals for their produce, they can differentiate between the best possible price of their produce as they are not bound to take the price whichever is given, they are under privilege to choose the right buyer. Example: A is ready to give Rs 20,000 for 50kgs of onions whereas B is giving Rs 15,000 for 50kgs onions to the same farmer, so here farmer has the freedom to choose the right buyer.
Freedom to choose what to produce: The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, provides the provision of contract farming where the farmer can set his crop standards and will ascertain his produce before its production.
Free from Taxes: The government further prohibits to charge any market fee or any tax, which in return helps to increase the finance of farmers. However government also assures to keep the MSP policy in function.
What are its drawbacks:
Lack of storage Facilities: India has almost one hundred and fifty million farmers who directly own land and use it for farming, but the most of farmers are not having proper storage facilities, so it will be not be beneficial for them to wait for a right buyer.
Most of the agricultural products are perishable in nature: It will be no fun to store perishable goods for long time.
Lack of transportation facilities: It would be challenging for the farmers to sell their produce outside their trade area due to lack of transportation facilities.
Who is at loss?
The other government parties raised their concerns arguing that, agriculture falls in the state list, so the Centre is not eligible to make the legislation on this subject. As the Parliament under the ordinance The Farmer’s Produce Trade and Commerce (Promotion and Facilitation) has provided that, no market fee or cess will be charged on farmers which in turn draws the concentration of the state government. State government is concerned about the loss of revenue from mandi taxes and fees, which currently range from 8.5% in Punjab to less than 1% in some states.
Some economists and activists are of this view that the Punjab And Rajasthan government apprehended the fear of being at loss, so they are finding the ways to ensure that they can continue collecting taxes on all agricultural trade within their state’s borders. The protest is none but an act of politics so that the farmers instigate and the government will be forced to change the legislation.
REFERENCES:
· Agriculture in India: Information about Indian Agriculture and its importance, September4 2020, www.ibef.com
· Explained: What are the three new agri sector bills and how will they benefit the farmers, september20 2020, english.jagran.com
· The Hindu Explains/ who loses and who gains from the farm Bills, TheHindu.com
IS THE CENTERAL GOVERNMENT HAS A RIGHT TO ENACT LAWS ON AGRICULTURAL MARKETS AND LANDS?
It is contended by the state government, that the central government is not eligible to enact any legislation on the subject which is part of state list. The Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 is sanctioned in the face of Entry 28 of the State List (markets and Fairs), and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 impinges on Entries 14, 18, and 46 of the State List, and Entry 7 of the Concurrent List. Article 254 provides, that if any provision of a law made by state legislature is repugnant to any provision of a law repugnant to any provision of law made by Parliament, the law made by Parliament shall prevail, whether passed before or after law made by state legislature.
Courts generally use the doctrine of ‘pith and substance’ to determine the character of legislation that overlaps between entries. In the cases such as Prafulla vs Bank of Commerce (1946) PC 60, privy council holds that a state law dealing with the money lending (a state subject), is not invalid merely because it incidentally affects promissory notes.
In determining the question whether federal law will prevail or a state law will prevail; (if both have an impact on particular human activity and, are in conflict with each other, then the federal law prevails).
REFERENCES:
· A background paper on ‘Concurrent Powers of Legislation Under List III of The Constitution’, by Shri P.M. Bakshi.
· An Expert Explains: What are the broad arguments for and against the farm laws? October 7 2020, by Faizan Mustafa, The Indian Express
