The Parliament on Sunday passed two Bills aimed at transforming agriculture in the country and raising farmers’ incomes. The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill and The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, which were passed by Lok Sabha on 17th September, and were passed by the Rajya Sabha on Sunday amidst major ruckus and allegations from opposition leaders.
On Sunday, the House witnessed unruly scenes with opposition members rushing to the Well of the House to shout slogans and register their protest.
Vice-president M Venkaiah Naidu, who is also chairman of the upper house, suspended eight lawmakers, including Mr O'Brien, who were accused of trying to snatch a mine and tear a rule book—a charge that he has vehemently denied.
The controversy is over the two Bills as well as the Essential Commodities (Amendment) Ordinance, 2020. Though PM Modi and Bharatiya Janata Party (BJP) president JP Nadda have clarified that the minimum support price (MSP) will stay in place, farmers' unions believe the Bills will phase out the MSP and the traditional grain market system, leaving them vulnerable to price pressure from private interests. They also claim the Bills are against the small farmers, something the Centre dismisses.
"It will root out the middlemen," the prime minister had recently said in a virtual address. He also said that it also allows farmers to sell produce anywhere in the country without barriers.
However, tempers ran high and even allies of the National Democratic Alliance are not united. After Shiromani Akali Dal (SAD) leader Harsimrat Kaur resigned from the Union cabinet, Ram Karan Kala, a member of legislation assembly (MLA) and leader of Jannayak Janta Party, an ally of the BJP in Haryana, was spotted at a protest site.
In Haryana, farmers are out on the streets protesting the bills. National Highway 344, which is better known as Ambala-Roorkee national highway has been blocked by protestors. In Kaithal, farmers blocked the Ambala-Hisar highway. The story is not very different in Kurukshetra where local farmers blocked key roads to Kurukshetra and Shahabad.
There are many commission agents or middlemen that the Centre says will be rooted out, particularly in Punjab; more importantly the Punjab government earns a 5% mandi tax when the government procures grain from mandis at the minimum support price. So there is also a vested interest among states like Punjab that see high grain procurement by the government and stand to lose tax revenue. A study also says that there are roughly 28,000 registered commission agents, who too are concerned of going jobless and would be interested in encourage farmer protests.
Three ordinances were promulgated on 2 June 2020 with the claim of giving a historic boost to rural India, benefiting farmers and transforming the agriculture sector. These ordinances were: The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 to promote barrier-free inter-state and intra-state trade in agriculture produce; The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 to engage with processors, aggregators, wholesalers, large retailers, exporters; and Amendment to the Essential Commodities Act to liberalise regulatory environment for farmers.
The first two were passed as Bills in both Houses of the Parliament.
The one over MSP has been of greatest concern to farmers, who are clearly not convinced by the many assurances from the government. Farmers fear that they will either cease to have the security of a minimum support price or private players may exploit them.
The long-term solution of farmer distress is to improve the supply chain, establish agro-processing zone and create a better agri-logistic platform and improve market based solutions and insurance. The higher MSP offered by governments ought to be a short-term solution to alleviate agriculture distress.
However, the worry is that support prices are being withdrawn without adequate work on agro processing or the supply chain required to help farmers sell nationally.
Narendra Singh Tomar, Union minister of agriculture & farmers’ welfare, rural development & panchayati raj, is emphatic that full protection has been ensured to farmers in these legislations. He clarified that the procurement at MSP will continue as assurance for this has been given by prime minister himself, and MSP for coming Rabi season will be announced in coming week.
Here are the main provisions in the two Bills, doubts raised by farmers and clarification given by the Union government...
The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
• The new legislation will create an ecosystem where the farmers and traders will enjoy freedom of choice of sale and purchase of agri-produce.
• It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under state agricultural produce marketing legislations.
• The farmers will not be charged any cess or levy for sale of their produce and will not have to bear transport costs.
• The Bill also proposes an electronic trading in transaction platform for ensuring a seamless trade electronically.
• In addition to mandis, freedom to do trading at farmgate, cold storage, warehouse, processing units etc.
• Farmers will be able to engage in direct marketing thereby eliminating intermediaries resulting in full realization of price.
Procurement at minimum support price-MSP will stop
If farm produce is sold outside agricultural produce marketing committee (APMC) mandis, these will stop functioning.
What will be the future of government electronic trading portal like National Agriculture Market (e-NAM)?
Procurement at Minimum Support Price will continue, farmers can sell their produce at MSP rates, the MSP for Rabi season will be announced next week
Mandis will not stop functioning, trading will continue here as before. Under the new system, farmers will have the option to sell their produce at other places in addition to the mandis
The e-NAM trading system will also continue in the mandis
Trading in farm produce will increase on electronic platforms. It will result in greater transparency and time saving
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020
• The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field. Price assurance to farmers even before sowing of crops. In case of higher market price, farmers will be entitled to this price over and above the minimum price.
• It will transfer the risk of market unpredictability from the farmer to the sponsor. Due to prior price determination, farmers will be shielded from the rise and fall of market prices.
• It will also enable the farmer to access modern technology, better seed and other inputs.
• It will reduce cost of marketing and improve income of farmers.
• Effective dispute resolution mechanism has been provided for with clear time lines for redressal.
• Impetus to research and new technology in agriculture sector.
Under contract farming, farmers will be under pressure and they will not be able to determine prices
How will small farmers be able to practice contract farming, sponsors will shy away from them
The new system will be a problem for farmers
In case of dispute, big companies will be at an advantage
The farmer will have full power in the contract to fix a sale price of his choice for the produce. They will receive payment within maximum three days.
Ten thousand farmer producer organisations (FPOs) are being formed throughout the country. These FPOs will bring together small farmers and work to ensure remunerative pricing for farm produce.
After signing contract, farmer will not have sought out traders. The purchasing consumer will pick up the produce directly from the farm.
In case of dispute, there will be no need to go to court repeatedly. There will be local dispute redressal mechanism.