Here is an explanation on what the new Bills are all about:
1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020:
The three Ordinances aim to increase the availability of buyers for farmers’ produce, by allowing them to trade freely without any license or stock limit, so that an increase in competition among them results in better prices for farmers. While the Ordinances aim to liberalise trade and increase the number of buyers, de-regulation alone may not be sufficient to attract more buyers.
- Trade of farmers’ produce: The Ordinance allows intra-state and inter-state trade of farmers’ produce outside: (i) the physical premises of market yards run by market committees formed under the state APMC Acts and (ii) other markets notified under the state APMC Acts. Such trade can be conducted in an ‘outside trade area’, i.e., any place of production, collection, and aggregation of farmers’ produce including: (i) farm gates, (ii) factory premises, (iii) warehouses,(iv) silos, and (v) cold storages.
- Electronic trading: The Ordinance permits the electronic trading of scheduled farmers’ produce (agricultural produce regulated under any state APMC Act) in the specified trade area. An electronic trading and transaction platform may be set up to facilitate the direct and online buying and selling of such produce through electronic devices and internet. The following entities may establish and operate such platforms: (i) companies, partnership firms, or registered societies, having permanent account number under the Income Tax Act, 1961 or any other document notified by the central government, and (ii) a farmer producer organisation or agricultural cooperative
- Market fee abolished: The Ordinance prohibits state governments from levying any market fee, cess or levy on farmers, traders, and electronic trading platforms for trade of farmers’ produce conducted in an ‘outside trade area’.
Opposition: states will lose revenue as they will not be able to collect ‘mandi fees’ if farmers sell their produce outside registered agricultural produce market committee (apmc) markets.
Also, commission agents stand to lose if the entire farm trade moves out of mandis.
But, more importantly, farmers and opposition parties fear it may eventually lead to the end of the minimum support price (MSP) -based procurement system and may lead to exploitation by private companies.
2.The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020
The Farmers Agreement Ordinance creates a framework for contract farming through an agreement between a farmer and a buyer prior to the production or rearing of any farm produce.
It provides for a three-level dispute settlement mechanism: the conciliation board, Sub- Divisional Magistrate and Appellate Authority.
- Farming agreement: The Ordinance provides for a farming agreement between a farmer and a buyer prior to the production or rearing of any farm produce. The minimum period of an agreement will be one crop season, or one production cycle of livestock. The maximum period is five years, unless the production cycle is more than five years.
- Pricing of farming produce: The price of farming produce should be mentioned in the agreement. For prices subjected to variation, a guaranteed price for the produce and a clear reference for any additional amount above the guaranteed price must be specified in the agreement. Further, the process of price determination must be mentioned in the
- Dispute Settlement: A farming agreement must provide for a conciliation board as well as a conciliation process for settlement of disputes. The Board should have a fair and balanced representation of parties to the agreement. At first, all disputes must be referred to the board for resolution. If the dispute remains unresolved by the Board after thirty days, parties may approach the Sub-divisional Magistrate for Parties will have a right to appeal to an Appellate Authority (presided by collector or additional collector) against decisions of the Magistrate. Both the Magistrate and Appellate Authority will be required to dispose of a dispute within thirty days from the receipt of application. The Magistrate or the Appellate Authority may impose certain penalties on the party contravening the agreement. However, no action can be taken against the agricultural land of farmer for recovery of any dues.
Opposition: farmer bodies and opposition parties say the law is framed to suit “big corporates who seek to dominate the indian food and agriculture business”. It will weaken the negotiating power of farmers. Also, big private companies, exporters, wholesalers, and processors may get an edge.
3.The Essential Commodities (Amendment) Bill, 2020:
This proposed legislation seeks to remove commodities like cereals, pulses, oilseeds, onion, and potatoes from the list of essential commodities and will do away with the imposition of stock holding limits on such items except under ‘extraordinary circumstances’ like war, famine, extraordinary price rise and natural calamity.
- Regulation of food items: The Essential Commodities Act, 1955 empowers the central government to designate certain commodities (such as food items, fertilizers, and petroleum products) as essential commodities. The central government may regulate or prohibit the production, supply, distribution, trade, and commerce of such essential commodities. The Ordinance provides that the central government may regulate the supply of certain food items including cereals, pulses, potatoes, onions, edible oilseeds, and oils, only under extraordinary These include: (i) war, (ii) famine, (iii) extraordinary price rise and (iv) natural calamity of grave nature.
- Stock limit: The Ordinance requires that imposition of any stock limit on agricultural produce must be based on price A stock limit may be imposed only if there is: (i) a 100% increase in retail price of horticultural produce; and (ii) a 50% increase in the retail price of non-perishable agricultural food items. The increase will be calculated over the price prevailing immediately preceding twelve months, or the average retail price of the last five years, whichever is lower.
- Develop Infrastructure: It is aimed at attracting private investment/FDI into the farm sector as well as bringing price stability
Opposition: Big companies will have the freedom to stock commodities, helping them dictate terms to farmers.