Farm Bill 2020: A Brief Scrutiny
1. The Farmer’s Produce Trade and Commerce (Promotion and Facilitation) BillThis bill will allow farmers to trade their agricultural produce outside the physical markets which are notified under various state Agricultural Produce Marketing Committee laws (APMC acts). Also called the ‘APMC Bypass Bill’. It will overrule all the existing state-level APMC acts. A highlight of the bill is it creates a barrier-free intra-state and inter-state trade of farmer’s produce. This means an exchange of products between different states and inside the state is going to be much more simple for the farmers/merchants. The bill introduces the use of an electronic trading platform for direct and online trading of produce. Organizations that can establish such platforms include companies, partnership firms, or societies. The bill also allows farmers the freedom to trade anywhere and everywhere outside the state-notified APMC markets. This includes allowing trade at farm gates, warehouses, cold storage, etc. Another highlight feature of this bill is, it denies state governments or APMCs from levying fees, cess, or any other form of charge on farmers’ produce.
Major ConcernsThe Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill does not give contractual support to the MSP(Minimum support price). Even though the farmers have nothing to do with the legalities, they have everything to do with the MSP. To this very day, there has been no mention of either “MSP” or “Procurement” in the said bill. The three bills may finally be able to save farmers from the clutches of middlemen. There are lakhs of commission agents in the mandis of Punjab and Haryana, the leading farm producer states. They will lose their control and power over farmers and in turn, their huge revenue. Due to denying the State government from levying taxes, they will lose a fair share of mandi tax, which will lead them to lose a huge source of revenue – one of the major reasons why they are opposing these bills.
2. Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services BillThe second bill provides farmers with a framework for engaging in contract farming, where farmers will be able to have a direct agreement with a buyer (before sowing season) for selling the product to them at previously agreed prices. This process works through the state govt who acts as an intermediary. The Organisations that may strike agreements with farmers to buy agricultural produce are defined as “sponsors’’. These Sponsors include individuals, companies, partnership firms, limited liability groups, and societies. The provision clearly states that any third parties that are involved in the transaction will have to be clearly mentioned in the agreement. The state governments can then establish registration authorities to provide for an electronic registry of farming agreements. Agreements will cover mutually agreed terms between farmers and sponsors such as supply, quality, standards, price, as well as farm services. These include the supply of seeds, feed, fodder, agrochemicals, machinery and technology, and other farming inputs. The duration for the agreement is said to be one cropping season or one production cycle of the livestock. The maximum duration allowed is restricted to 5 years. For production cycles that exceed five years, the period of agreement can be decided by the farmer and sponsor with a common agreement. Purchase price of the farming produce which includes the methods of determining the price can be added to the agreement. In case the price varies after a certain time, it becomes mandatory that the agreement must add a guaranteed price to be paid as well as clear reference points for all additional payments the farmer might receive, like bonus and other incentives. Just like the first bill, there is no mention of the minimum support price (MSP) that buyers need to offer to farmers. It also specifies that, in this system, delivery of farmers’ produce can be undertaken by either party, provided it lies within the agreed time frame. Sponsors have the right to inspect the quality of products as per the agreement. Except for seed production in all other cases, the entire amount must be paid at the time of delivery and a receipt slip must be made that includes all the details of the sale. Since the produce is out of state govt’s hands, such agreements are also exempted from the sponsor for any stock-limit obligations applicable that come under the Essential Commodities Act of 1955. Stock-limits are a method for preventing hoarding of agricultural produce. This bill also comes with a three-level dispute settlement mechanism:
- The conciliation board- A board that is constituted by the government for providing settlement regarding an industrial dispute, when such an occasion arises.
- The sub-divisional magistrate- The head official of a district subdivision or an administrative officer, depending on the govt’s structure.
- The appellate authority- Prescribed by the Central Act, certain officers are appointed ( who are senior in rank) to the Public Information Officer to deal with appeals from requesters who are unhappy with how their request is being treated. These officers belong to the Appellate authority.