FOCUS-MARCH 2021

FARM BILLS: ARE THEY FOR FARMERS’ WELFARE! OR PROMOTION OF AGRI BUSNIESS! What are the problems faced by the Indian economy and what needs to be fixed to compete with other fast developing countries is a question which needs to be considered before bringing in reforms. Before every election in India, the problems of corruption is identified by all the politicians and the policymakers as the main deterrence for growth, but after the election, this subject is forgotten. In a democracy like India, the Lawmaking should be based on collective wisdom or else we will land up in a situation like the present one. It is an inevitable fact that India is a divided country with various diversity and to keep them together, compromised governance is necessary except in cases of national integrity and security. The reforms are necessary for any advancement to ensure the growth of an economy and a country. Growth is essential to meet the ever-growing demands of the growing population. India has done enough for the last many years but not enough to meet the requirements of the new generation. The growth rate is not in proportion to the population growth and not the highest among the developing countries. The developing countries like South Korea and China have progressed far more than India and therefore are not in the developing block anymore. Therefore, with the stated intention to bring in some reforms, the government came out with new farm laws. The government of India passed three bills in September 2020, ostensibly for the welfare of Indian farmers. They are 1) The Farmers Produce Trade & Commerce (Promotion & Facilitation) Act 2020. 2) The Essential Commodities (Amendment) Act. 2020. 3) The Farmers (Empowerment & Protection Agreement on Price Assurance & Farms services Act 2020. However these new Farm Laws have brought opposition from some section of farmers and others likewise. These laws need to be respected because they are passed by the elected members with the due process in Parliament. But these farmers are protesting stating that it is detrimental to their interests. Does this mean the law-making process did not consider them! As per the preamble of the legislation, the laws are meant for the freedom of choice relating to sale of farm produce and incorporating transparency. That means earlier they had no choice under the respective State APMC Acts. In that case, the same APMC Act could have been amended to meet this criterion. These laws have been passed with the justification that the farmers lives have to be improved. The intention seems to be good but the content needs to evaluated for its viability without any prejudice. The opening statement of freedom of sale and transparency of the Farmers ‘Produce, Trade and Commerce (Promotion and facilitation) Act, 2020, should demonstrate its commitment in subsequent sections. The intention of the above Acts to provide freedom to the farmers to sell wherever they want at whatever price they want, gives them confidence, without the presence of domineering registered middlemen. Here it is crucial to note that the idea is not to shut down APMC but to expand farmer’s choice. So if a farmer believes a better deal is possible with some other private buyer then he can take that option instead of selling in the APMC yard. The scheme appears good on paper. The Farmers (Empowerment and protection) Agreement on price assurance and farms services Act 2020, has a section 3 which states that the farmer will agree to the sale of produce. It is not understood why they have to enter into an agreement if they are allowed to sell the product to anyone. If they enter into an agreement from a receiving end, then they will be bound by the agreement not to sell to anyone else. The intent of allowing farmers to sell to anyone gets compromised restricting their freedom of sale under the provision of the said agreement. It also has some words like ‘Sponsor’ which remains unclear with respect to its definition. Section 8 states there shall be no mention of transfer, including the sale, lease or mortgage of farmers land. But when there is the consideration with offer and acceptance under the Contract Act how to enforce the legal suit for specific performance in case of non-performance of the conditions of the contract. It doesn’t prevent any other agreements to be signed as in Real Estate Purchase where two agreements are forced upon the buyers. It is pertinent to note here that though the electronic process is stated in the legislation, the process for sale of farm produce is not clearly defined. The methodology of fixation of competitive price is also not stated clearly. Whereas APMC Act has a section indicating the fixation of price by tender or auction also. The main contention of the farmers is the Minimum Support Price getting compromised under this new law. The opening statement in the Farmers (Empowerment and protection) Agreement on Price Assurance and Farm Services Act 2020, states that it will provide transparency but fails to state what, whose and how it will help to be transparent. The mutually agreed prices seem to be good but when it is with the parties of equal stature. The sale of farm produce under the contract agreement with the conditions of payments and quality among many other things will be another challenge to the illiterate and semiliterate farmers. There should be no condition for the sale and payment. The Corporate can pay on the spot or guarantee payment under all circumstances. But paying after two days under the conditions of the agreement which can be made with the complex Indian contractual laws which take decades to be settled is a lost cause for the farmers. The legislation the Farmers (Empowerment and protection) Agreement on Price Assurance and Farm Services Act 2020, under the provision of section 3 leads to sign an agreement with the trader binding the farmer to the condition for 5 years which can be extended under special circumstances. It baffles logic, how the farmer will be able to retain his freedom under this law when he signs an agreement?! The section 2 (a) of The Farmers Produce and Commerce (Promotion and facilitation)Act 2020 definition of ‘electronic trading and transaction platform’ is a complex process of trade which is too early for our semiliterate farmers to participate effectively. Both the above mentioned laws define the trading agreement and the electronic trading process, without dealing with the freedom of trading procedures which the farmer will be able to take advantage of, leaving the rest for speculation. It is also good to note that the agreement is barred from having anything to do with sale or transfer of land. But unfortunately, we have live examples of the frauds in the real estate apartment purchases where the buyer is forced to sign two agreements one for Sale and the other for the construction of an apartment. Under the contract agreement of offer and consideration, the penalty for the failure of specific performance by the parties to the agreement is not clearly expressed and finally it may lead to exploitation of farmers and their land being the only asset in most cases. Similarly, the failure of specific performance by the trader will lake the dispute to the Court which can take decades to conclude in the Supreme Court which is beyond farmers' resources to knock at. The section 2(b) and 2(e) of The Farmers Produce, Trade and Commerce (Promotion and facilitation)Act 2020,and The Farmers (Empowerment and protection) Agreement Act, 2020 respectively, define the term ‘Farmer ‘ which is so much flexible that if someone wants they can include the individuals of corporate companies and the farmers together under Section 2(b) & 2(e) and 2© & 2 (h) of respective above Acts as below, “farmer” means an individual engaged in the production of farm produce by self or by hired labour or otherwise, and includes the farmer producer organization. (c) “farmers’ produce” means,–– (i) foodstuffs including cereals like wheat, rice or other coarse grains, pulses, edible oilseeds, oils, vegetables, fruits, nuts, spices, sugarcane and products of poultry, piggery, goatery, fishery and dairy intended for human consumption in its natural or processed form; (ii) cattle fodder including oilcakes and other concentrates; and (iii) raw cotton whether ginned or unginned, cotton seeds and raw jute. These definitions, the individual, the manager and the corporate, producing food products viz, ITC, HUL etc. becomes entitled to be considered as farmers. When there is no difference between the powerful who can exploit the system and the weaker person who can be exploited, then the protection of interest of farmers will be a lost cause. The rationale of clubbing these two identities which are poles apart into one definition itself defeats the intent of the Act. When there is no difference between the two then there is no benefit which can be accrued to the farmer under this law. This aspect of clubbing diametrically differing stake holders can be easily interpreted to infer that it is not meant to serve the weak and by default the stronger can run away with the trophy. The amendment of Section 3 of the Essential commodities Act,1955 will again help the hoarders, in small quantity without any benefit to the farmers. The corporates with their power and resources can stock the foodstuff to control the rates and release supplies or commodities at their rates without crossing the limits in the amended Act. All this indicate that there may not be any advantage to the farmers from these amendments. The discussion should start from the intent of the law and to see if it can be corrected. When the definition itself is faulty and ensuring the protection of farmers against the sale of land of the needy farmers under the monetary compulsion will not be possible. The contract agreements leading to civil cases are an impossible way to justice for the farmers with any conclusion which can take years, therefore not in the interest of the farmers. The details mentioned above indicate that these legislations are made in a hurry without the best interest of farmer. However it does give an impression of helping the Corporates or traders who will enter the trading of agricultural produce. Considering the lack of literacy among Indian farmers, it gives no confidence to show that the farmer's interest will be protected under these laws. If we refer to the state of the real estate business, where even the highly educated buyers feel cheated under the nose of the regulating agencies with all the laws in place, these illiterate farmers will be just pawns in the whole game. There is no evidence in Indian history, barring few Corporate Houses, that these Corporates will pursue ethical business practices with the farmers. In the beginning, it will be goody goody and slowly they will start throwing their weight to extract maximum profits from the dealings with gullible farmers. These systems work well in advanced countries because there is the fear of law which catches up with the culprits immediately, however highly placed they are. Same may not be said about India. Therefore it is considered that for the Indian conditions the APMC laws are good enough. The Karnataka APMC legislation had started its journey in the year 1966 till date, with many amendments done after experience and research by the concerned people, seems to be a comprehensive work on the subject. If needed the APMC Act may be amended to increase the efficiency and adding freedom of trading process with transparency and retaining the MSP requirement. Finally, everything boils down to the main areas of failure in India which everyone identify before the election, they are Corruption and Judicial inefficiency. It is in the interest of the nation at large to make amends in the present Farm Laws 2020 with the intention to address the core issues mentioned above. VidyadharDurgekar, Sustainability Auditor, Author & a Poet www.vidyadhardurgekar.com with inputs from J. Shriyan