- Q) To transform the agriculture sector and to raise the farmer’s income the government has passed farm bills 2020. Critically analyse.
The farm bills introduced by the government envisage bringing change in some of the key aspects of the farm economy — trading in agricultural commodities, price assurance, farm services including contracts, and stock limits for essential commodities.
Provisions of the bill
The Essential Commodities (Amendment) Bill, 2020:
- Key provision:It allows for regulating the supply and stock limit of certain specified agricultural produce under extraordinary circumstances such as an extraordinary price rise and natural calamity of grave nature, etc.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020:
- The Bill, through Clauses 3 & 4, gives freedom to the farmer to indulge in intra-state or inter-state trade in areas outside the APMC mandis.
- It also prohibits the collection of any market fee or cess under the state APMC Acts with respect to such trade outside the APMC market yards (Clause 6).
- A key provision of the Bill is Clause 14, which gives it an overriding effect over the inconsistent provisions of the State APMC Acts.
- Also, the Central Government has been given powers to frame rules and regulations under the Act.
Benefits of the bill
- This could ensure remunerative prices for the farmers through competitive alternative trading channels to promote efficient, transparent and barrier-free interstate and intra-State trade and commerce of farmers’ produce.
- It will ensure freedom of choice of sale and purchase of agri-produce.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020:
- Key provision:It seeks to create a legal framework for contract farming in India.
Benefits of the bill
- The bill will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters, etc., on a level playing field without any fear of exploitation.
- This will also help transfer the risk of market unpredictability from the farmer to the sponsor.
- Enable the farmer to access modern technology and better inputs.
- Reduce the cost of marketing and improve the income of farmers.
Concerns over the farm bill 2020
- Since agriculture and markets are State subjects – entry 14 and 28 respectively in List II – the ordinances are being seen as a direct encroachment upon the functions of the States
- The provisions are viewed as against the spirit of cooperative federalism enshrined in the Constitution.
- Justification by Centre: The Centre, however, argues that trade and commerce in food items is part of the concurrent list, thus giving it constitutional propriety.
- Critics view the dismantling of the monopoly of the APMCs as a sign of ending the assured procurement of food grains at minimum support prices (MSP).
- The Price Assurance Bill, while offering protection to farmers against price exploitation, does not prescribe the mechanism for price fixation.
- There is apprehension that the free hand given to private corporate houses could lead to farmer exploitation.
- Easing of regulation of food items would lead to exporters, processors and traders hoarding farm produce during the harvest season, when prices are generally lower, and releasing it later when prices increase.
- This could undermine food security since the States would have no information about the availability of stocks within the State.
- Several reforms at the level of the central government as well as at the State level have been introduced and welcomed by farmers. However, in this particular case, the issue is not about the Bills; it is also about the process of their introduction.
- The government has failed to have or hold any discussion with the various stakeholders including farmers and middlemen.
- Other concerns include the upper hand of agri-businesses and big retailers in negotiations, thus putting farmers at a disadvantage.
- The benefits for small farmers from companies are likely to reduce the engagement of sponsors with them.
- The farmers also fear that the companies may dictate prices of the commodities.
The Centre should reach out to those opposing the Bills, including farmers, explain to them the need for reform, and get them on board.