FOCUS-2021

FARM LAWS 2020 The discussions on policy reforms and structural changes in agriculture started around the year 2000 as there was a requirement for changes in market regulation and removal of various restrictions provided under the APMC Act. Keeping these discussions at various stages and levels the three new farm acts were legislated by the Government of India. These Farm Acts 2020 as on date were stayed by the SC and it constituted a four-member committee to make recommendations within two months. The panel has notified a dedicated portal to get views of farmers individually. The Government has proposed that the implementation of Farm Laws 2020 could be kept on hold for a period of one and a half years, which the agitating farmers have refused. However these acts have been widely acclaimed at home and abroad as historical and long overdue. But some experts, states and stakeholders, including farmers, have been protesting against them and seeking their withdrawal. But the Government of India is repeating its intention to continue with the legislation enacted and asking the protestors to indicate which provisions or parts to be repealed which the protesters are not ready to suggest. Some serious limitations of the earlier APMC Act are observed and are as follow- though there is variation across states: • notified commodities produced in the area under the jurisdiction of an APMC mandi to be sold only in them and the operating traders/buyers must have the licence to operate in the mandi. • There are multiple levies on sale/purchase transactions • There is no direct sale possible from farmer to trader. Even if allowed user charges and mandi cess must be paid without actually using the facility. This kind of practice amounts to forcing all vehicles to move on toll road and pay toll tax even if that road is not used! • The charges of middlemen, like commission agents, statutorily fixed but not capped. In view of the above all successive governments at the Centre since 2000 made multiple attempts to persuade states to make appropriate changes in their APMC acts. The NDA government prepared and pushed for the Model APMC Act 2003, which involved significant liberalization and reforms. Provisions for contract farming and direct purchase from the farmers outside APMC were included in that model Act. After coming to power in 2004 the UPA government continued those attempts and made serious efforts to take fruit and vegetables out of APMC regulation, which has been adopted by 16 states. Such efforts to persuade states to reform their APMC acts continued with the change in government at the Centre. The State/UT Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 (APLM Act) was based on several deliberations made with the state ministers of agriculture/marketing, and was well-appreciated. But only one state (Arunachal Pradesh) adopted the APLM Act. Agricultural market reforms in other states remained piecemeal, patchy, diluted and very slow. Contract farming was kept out of the APLM Act 2017 and a separate model act on contract farming, “The State/UT Agricultural Produce & Livestock Contract Farming and Services (Promotion and Facilitation) Act 2018”, was prepared by the Ministry of Agriculture and Farmers Welfare after thorough consultation and discussion with states, union territories, and experts but states did not come on board to reform their APMC acts for 18 long years, ever since these initiatives were started in 2000. Therefore the only option left with the Union government was to use the constitutional route for pan-India implementation of agricultural policy and market reforms. Another policy reform relates to the modification in for agri-food storage. The attempt to amend Essential Commodities Act (1951) ECA also started around the year 2002. Some agri-food commodities were removed from the list of ECA through a government order in 2003 but brought back in 2006 by UPA government but once again it was reversed in 2016 and changes were notified to remove the requirement for licensing of dealers and restrictions on storage and movement of food grains, sugar, oilseeds and edible oils.. This created uncertainty in the minds of investors and caused serious setbacks to agricultural infrastructure, storage, logistics and modernization of the supply chain. The above account of events clearly shows that the need and matter underlying the new farm laws have been widely discussed for a very long time by different political dispensations and they have been partly adopted and implemented by state governments. With this background, the Government of India passed three enactments in September 2020 namely, 1) The Farmers Produce Trade & Commerce (Promotion & Facilitation) Act 2020. 2) The Farmers (Empowerment & Protection Agreement on Price Assurance & Farms services Act 2020. 3) The Essential Commodities (Amendment) Act. 2020. Essentially these three seek to do three things which the government says will unshackle the farmers from regulation and usher them into free agricultural market economy in which they can easily double their income. 1) - Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 creates a national framework for contract farming. A farmer and a buyer before the production or rearing of any farm produces would enter into an agreement between them. The Provisions include a Farming Agreement. The farming agreement is an agreement between a farmer and a buyer prior to the production or rearing of any farm produce. The minimum period of the farming agreement shall be for one crop season or one production cycle of livestock and the maximum period shall be five years. It also states that if the production cycle of any farming produce is longer and may go beyond five years, the maximum period of farming agreement may be mutually decided and explicitly mentioned in the farming agreement by the farmer and the buyer. The pricing of farming produce and the process of price determination 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. The Act provides for a three-level dispute settlement mechanism namely the Conciliation Board, the Sub-Divisional Magistrate and an Appellate Authority. 2) The second Act namely the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 permits intra and inter-state trade of farmers’ produce. The physical premises of Agricultural Produce Market Committee (APMC) markets and other markets notified under the state APMC Acts their boundaries would not matter and may be ignored but not necessary. The farmer has the right of opting out. The Act allows the farmers to trade- in outside trade area such as farm gates, factory premises, cold storages, and so on. Previously, it could only be done in the APMC yards or Mandis. It facilitates lucrative prices for the farmers via alternative trading channels to promote barrier-free intra-state and inter-state trade of agriculture produce. Additionally, it allows the electronic trading of scheduled farmers’ produce (agricultural produce regulated under any state APMC Act) in the specified trade area. It will also facilitate direct and online buying and selling of the agricultural produce via electronic devices and the internet. As per the Act, the State Governments are prohibited from levying any market fee or cess on farmers, traders and electronic trading platforms for trading farmers’ produce in an OTA or 'outside trade area'. 3) The third Act is Essential Commodities (Amendment) Act, 2020. Originally the said act was enacted in 1955 to ensure the delivery of certain commodities or products, the supply of which if obstructed owing to hoarding or black-marketing would affect the normal life of the people. as this includes foodstuff, drugs, fuel (petroleum products) etc. The Government of India regulates the production, supply, and distribution of a whole host of commodities it declares ‘essential’ in order to make them available to consumers at fair prices. The Government can fix the MRP declaring an 'essential commodity’, can add commodities and take them off the list depending on the situation. The Government can notify stock-holding limits on a certain commodity for a specified period and the imposition of any stock limit on agricultural produce will be based on price rise and can only be imposed if there's a 100% increase in the retail price of horticultural produce and 50% increase in the retail price of non-perishable agricultural food items. The respective State Governments can choose not to impose any restrictions as notified by the Centre. But, if the restrictions are imposed, traders have to immediately sell any stocks held beyond the mandated quantity into the market. With the amendment in the Act, the Government of India will list certain commodities as essential to regulate their supply and prices only in cases of war, famine, extraordinary price rise, or natural calamities. The commodities that have been deregulated are food items, including cereals, pulses, potato, onion, edible oilseeds, and oils. As per the amendment, 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. It is to be noted that these restrictions will not be applied to stocks of food held for public distribution in India. Indian farmers are fearing that they might lose more than they could gain after the new Farms Laws 2020 comes into operation, hence farmers have taken to street. Bhartiya Kisan Union leader Rakesh Tikait stated, ”They (Central Government) want amendment in them (Farm Laws 2020) but we want these laws to be repealed. We don’t want changes. We will end our protest only when these laws are withdrawn. Like the government brought the three bills, they should also bring a bill on the MSP." 27-year-old Rashpinder Singh stated that the Indian Government has left the farmers at the mercy of big corporations. It is preposterous to believe that farmers who have small landholdings will have any bargaining power over private players. It is to be noted that 11 rounds of talks have taken place so far between the Government and the Farmers' representatives. However, no solution has been found to-date. Reportedly Arthiyas, a term in vogue in Punjab for middlemen or commission agents are the ones who are the backbone of these protests. There are around 28,000 licensed commission agents in Punjab. They will lose everything in the new arrangement proposed by the enactment. Some kind of a fear has been driven into the farmers’ psyche by vested interest groups and they are not allowing the impasse to end. The fact that global personalities are talking in support of farmers protest makes it clear that the whole thing is orchestrated. From Canadian Prime Minister to UK parliamentarians to Kamala Haris’ sister and a group in the US, then a Pop singer and a teenage environmentalist Greta Thunberg have all jumped into the fray. With Canadian Prime Minister and UK parliamentarians, mostly Pakistanis and Sardars, Khalistani influence was very clear, or else there’s absolutely no reason to jump into an entirely unrelated internal matter of India. About the Pop singer there is an allegation of a huge payout involved, while Greta Thunberg is apparently unaware that farmers’ want field burning, a massive source of air pollution to be penalty free. According to Bhavdeep Kang, a senior journalist, this environmentalist is ignorant of the environment-unfriendly farming practices in Punjab which have led to ground water depletion, food contamination and soil degradation, an unsustainable system farmers in Punjab are fighting to perpetuate. Thus there are impediments created by forces inimical to India’s interest and making things difficult for a peaceful resolution of the impasse. Centre v/s Farmers 1- Central Government proposed that the respective State Governments can levy cess on the private mandis. The proposal was rejected by the farmers as they believe that the creation of private mandis along with APMC will drive agriculture business towards private mandis, ending government markets, intermediary systems and APMCs. As a result, big corporate houses will overtake markets, thereby procuring farm produce at incidental rates. The farmers believe that the Government may delay the procurement (as in the case of paddy), turning the public markets inefficient and redundant. Central Government proposed that they will give written assurance for the continuation of the existing MSP system. The proposal was rejected by the farmers as they believe that the new Farm Laws 2020 are brought to dismantle APMCs. A written assurance from the Union Government is not a legal document and holds no guarantee, say leaders of farmers. Central Government proposal that they will direct the State Governments to register traders in order to regulate them was rejected by the farmers as the new Farm Laws 2020 have no provision to regulate the traders. As per new Laws, any PAN cardholder can procure grains from the markets at wishful prices and hoard the farm produce and therefore the farmers believe that the Central Government is not ready to take responsibility for the ongoing issue as they want the State Governments to regulate the traders. Central Government proposal that under the contract farming law, farmers will have the alternative to approach the court and their land will be safe as no loan will be given on farmers’ land and their buildings by mortgaging was rejected by the farmers as the history of contract farming has many examples of non-payment by the companies making various excuses like substandard produce etc. for example, in sugarcane produce, payments were held up for years; many cases of non-procurement have been witnessed citing 'poor quality', driving the farmers into a debt trap. Thus, farmers do not have money to repay the loans and have no option but to sell/lose their lands. Prime Minister Modi referred the Farm Bills 2020 as a watershed moment in the history of Indian agriculture, empowering millions of farmers. Under new Farm Laws 2020, all the dues of the farmers must be cleared within three days of procurement, failing which, the farmer can lodge a complaint. The farmers are being deceived on these historic agriculture reform laws by the same people who have misled them for decades. He added that the old system was not replaced rather new options were added under the Farm Laws 2020 for the farmers. Union Minister of Agriculture and Farmer Welfare, Rural Development and Panchayat Raj, Narendra Singh Tomar stated that the government is committed to MSP, however, it was "not a part of the law" earlier and "is not part of the law" today. Supreme Court heard the plea on farmers' agitation. The petition stated that the commuters are facing hardship due to blockades. Emergency and medical services have been severely impacted due to the farmers' agitation. On 11 January 2021, the Supreme Court stayed the implementation of the three Farm Acts 2020 and constituted a four-member committee to make recommendations on the same. A bench headed by Chief Justice of India S. A. Bobde gave the panel two months time to submit its report for a 'fair, equitable and just solution'. Members of the Committee are Bhupinder Singh Mann, the national president of the Bhartiya Kisan Union and All India Kisan Coordination Committee, (Disassociated himself from the SC formed panel) Dr. Parmod Kumar Joshi, an agricultural economist who is also the Director for South Asia, International Food Policy Research Institute, Ashok Gulati, agricultural economist and former chairman of the Commission for Agricultural Costs & Prices and Anil Ghanwat, chief of Shetkari Sanghatana. Dedicated Portal for farmers SC appointed panel for deliberations on the three contentious Farm Acts 2020 and has notified a dedicated portal to get views of farmers individually. Farmers have called the new Farm Laws 2020 as 'corporate-friendly' and 'anti-farmer'. This aspect needs to be looked into to address the ‘perceived or real’ fear of farmers. At the end of the day, if these laws which have been spoken about as a ‘watershed moment in the history of Indian agriculture’ needs to deliver the minimum expectation of doubling the income of farmers, that would help the farmers’ lives a better life without any debt and without having to sell their land and their precious life shall continue to be available as the Anna Daata to the nation and not end in the tragedy of suicide and end up as mere statistics in the hitherto history of Indian farmers. M R Vasudeva is a Former Director, Mangalore International Airport with inputs from J. Shriyan