farm acts passed

FARM ACTS

Tarleen Kaur, 13 October, 2020

The three farm bills eventually became Acts on September 27, 2020, when President Ram Nath Kovind gave his assent to all the three bills. This led to the further aggravation of the farmers’ dissent against the passing of these bills. 

Background

The farmers’ protests started in June 2020, immediately after the Union Cabinet passed three agricultural ordinances in the Parliament. Then the Rajya Sabha passed these bills on September 20, 2020, which was followed by the Presidential assent. Since, now they are enacted, so these are named as-

  1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020;
  2. The Farmers’ (Empowerment and Protection) Agreement and Price Assurance and Farm Services Act, 2020; and
  3. The Essential Commodities (Amendment) Act, 2020.

The Union Cabinet alleges these acts to be favorable for farmers. Farmers, on the other hand, allege that under the guise of reforms facilitating liberalization and privatization, the government intends to discontinue the Minimum Support Price (MSP) system. As a result, they would be open to the vulnerabilities of the market and deprived of the basic fixed income, which was earlier provided by the government through MSP. Though the recently enacted law does not expressly mention about the suspension of the MSP regime, farmers however predict this because the new law lacks a provision safeguarding the same.

Since the promulgation of the agricultural ordinances, farmers from the Bharatiya Kisan Union (BKU) have shown their agitation in various forms. They held sit-ins, marched in fully loaded tractors and trolleys and even blocked railway tracks at many places. These farmers belonged to various States including Punjab, Haryana, Uttar Pradesh and Rajasthan. Even, the Food Processing Minister of Modi’s Cabinet, Harsimrat Kaur Badal, gave resignation, claiming the bills to be anti-farmer.

Brief analysis of the three Acts

The farmers have opposed all the acts separately in the following manner-

  1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020

This act allows liberal intra and inter-state trade of the agricultural produce. The monopoly of APMC (Agricultural Produce Marketting Committes) mandis has also been destroyed under this Act. Earlier, licensed middlemen appointed by the APMC used to buy the produce from the farmers. Then these middlemen would themselves contact the big traders and retailers and sell the produce at their own prices. But now, under this Act, farmers are no more required to sell their produce to such middlemen. They can directly sell to the institutional buyers at mutually agreed prices. So, in this way, they can sell their output independently without any barriers.

Farmers’ Views- The bargaining powers of the large-scale buyers and corporates are far more than the farmers, who don’t know how to negotiate with them. The large traders can easily take advantage of the poor and illiterate farmers. Owing to transportation and storage constraints, it is difficult for farmers to sell at farther places. The removal of geographical restrictions has added to the plight of the farmers. It may be noted that earlier also, there was no strict restriction for the farmers to sell their produce. Therefore, rather than easing down the restrictions, this Act would probably add fuel to the fire and could even deprive them of the existing income. 

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  1. The Farmers’ (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020

This act promotes contract farming by allowing the farmers to enter into agreements with exporters, agricultural firms or large buyers at pre-agreed prices.

Farmers’ Views- The farmers apprehend the removal of MSP, i.e. no government control over prices. They are open to vulnerabilities of the market. As long as they get the prices higher than the earlier MSP, it is profitable. But if the contract prices are lower than MSP, the farmers could be deprived of their basic right to livelihood. In accordance with this, they currently demand that the contract prices should be linked to MSP.

  1. The Essential Commodities (Amendment) Act, 2020

This act allows the economic agents to freely stock essential food commodities such as cereals, edible oil, pulses and sugar, without the fear of being prosecuted for hoarding. There will be no storage limit, regulation and movement restriction for these commodities. Such limits or regulations can be imposed only under emergency situations, for instance, a natural calamity, due to which the production collapses, when the production weaken.

Farmers’ Views- Unlimited stocking can give rise to artificial and frequent price fluctuations in the market. The farmers could be paid less. Moreover, this Act promotes hoarding, which is illegal. 

General claims/demands of the farmers

According to farmers, the new law is not legally empowering the farmers, rather it is hampering their growth. They put forth the demand of strengthening of the MSP system by making it a legal right. Farmers contend that although some reforms with respect to price determination were required in the functioning of APMCs, but its complete removal is not a good solution. For the  miserable farmers, the private owners are no less than the unscrupulous middlemen. As they lack experience in direct dealing in the market, suddenly exposing them to market makes them helpless. Furthermore, the amendment in the Essential Commodities Act will give an edge to the private companies to practice hoarding in a limitless manner. Neither the producers (farmers), nor the consumers will get any advantage of these laws; rather the private players will be the only ones to have an upper hand in the market.

Criticism by Opposition 

Apart from the objections of the farmers, the opposition parties also criticize the manner in which these bills were passed in the Parliament. The controversial bills were passed by a voice vote. Voice vote means the oral communication by the members about their approval or disapproval to the motion. During the parliamentary proceedings with the help of these voice votes, a lot of chaos and ruckus was created in the Rajya Sabha, with the occurrence of several dramatic scenes. Many paper documents were torn and flung into the air, microphones of the Secretary General and the Deputy Chairman were broken down and MPs moved up on the tables in front of the Secretary General in order to raise their voice. Some members even came to the well of the House, thus violating the social distancing measures amid the COVID-19 pandemic. The rules of the Parliament were disregarded, thus violating the principles of Parliamentary democracy. Thus, the bills passed in such state of affairs cannot be justified. 

The Way Forward

In the wake of the protests and oppositions, the Presidential assent gave these agricultural bills the status of Acts. Even after the passing of these Acts, the protests and objections are still going on. However, these Acts are yet to face the test of time to determine their validity.

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