The PARLIAMENT MONSOON SESSION ended the previous week as it has already become home to many controversies and rebuke. The MODI government passed eight prime bills in the session. But the Farmers’ Produce Trade and Commerce Bill, The Farmers’ Agreement of Price Assurance and Farmers’ Service Bill, and Essential Commodities Act Amendment are the talk of the town.
These three bills have divided experts, commoners, and the political arena on the grounds of contradicting opinions. The bills have brought the Farmers’ unions under one umbrella, backed by the opposition leaders and NDA allies like Shiromani Akali Dal.
So what is the farmers bill 2020? What are its pros and cons? Why the farmers bill 2020 is opposed? What are the demands of the Farmers?
In this corner of our site, we will discuss these questions and will give you a new dimension to see the new farmers bill 2020.
The new farmers bill seek to remove the previously regulated market – APMC. APMC came into being in the 1960s, when there was an urge to end the exploitation of farmers and improve the agri-market. But what these APMCs are? What are the benefits and loopholes?
What is APMC: PROs and CONs
APMC mandis are state-regulated mandis, where farmers can sell their crops at a minimum support price. The farmers sell the produce to a middleman, which then sells to the consumer, and if the consumers can’t purchase, then the government will step-in to procure the product.
Since the installation of this system, it has given conflicting results:-
- It helps to sell the produce at MSPs.
- It is a transparent system.
- The farmers have the back of the government, as it ensures to procure the crops if they go unsold.
- The revenue collection from mandis are to be used for the infrastructural development and its promotion.
- It eliminates market competition, monopsony market, a market where there is only one buyer. Since they can only sell it to the middleman, the middleman manipulates the prices, buying at low costs from the farmers and selling at high costs to the consumers. Demoralizing, the very principle of APMC.
- Over the years, the cess became an extra source of revenue for the state governments and got diverted from its actual purpose of infrastructural development. This created loopholes to generate more revenue.
- There are licensing restrictions and delays, and the farmers have concentrated trade yards. The regulation of the market has not made it a well-oiled machinery rather rusty and corrupt.
These flaws developed inconsistency in the law throughout the country as some states sought to amend it multiple times and some even abolished the law, like Bihar. Considering the flaws and directing towards the upliftment of the Agri sector, the Modi government passed three farmers bill on 24th September, 2020.
THE FARMERS’ BILL 2020: PROVISIONS
- FARMERS’ BILL- Farmers’ Produce Trade and Commerce Bill
This bill empowers the farmers to sell outside the Agriculture Produce Market Committees(APMCs) regulated markets. This bill, as proposed, will allow the farmers to sell their crops anywhere in different ‘trade areas’ like corporates, partnership firms, registered societies, FPOs, and agriculture cooperative societies.
This bill installs a parallel free market against the APMC mandis. Clause 14 empowers the center to frame the rules and regulations related to agricultural trade.
- FARMERS’ BILL- The Farmers’ Agreement on Price Assurance and Farm Service Bill
This bill allows farmers to do contract-farming by coming into a mutual agreement with the trader. Both the farmer and the trader will mutually decide the price of the crops. The period of agreement can sit anywhere between one crop season to five years. If the production cycle is more than five years, then the maximum term shall be decided by the farmer and sponsor.
- FARMERS’ BILL- Essential Commodities Bill (Amended)
This bill aims to reduce the regulatory interference by the government as it sweeps cereals, pulses, potatoes, onions, and oils from the essential commodities list. It poses to call the private sectors and the foreign investors to buy the crops, which will increase the competition and help farmers to earn more.
DEMANDS of Farmers-
- Ensure MSP by including a separate clause.
- Farmers have trust issues with the big traders, as they think they will exploit them.
- They want their loans to be cleared.
- The mandi system should remain untouched.
- A law that ensures payment from the middlemen.
BENEFITS of the new FARMERS’ BILL-
- It allows the farmers to go beyond fixed market yards(NB:- Earlier also many farmers, almost 94%, were not connected to mandis). The free market can increase competitiveness and hence will benefit farmers.
- The monopoly of the middleman will end, and it will end the corruption and bureaucracy.
- It will do away with the license and cess system.
- The third bill helps to lure foreign investments as it restricts the government from declaring the stock-holding of some commodities.
DRAWBACKS of the new FARMERS’ BILL-
- There will be no regulations to crosscheck data, transactions, and money-hike. Eventually, there will be no transparency.
- The APMCs set price signals for the traders outside the mandis. Since the new system makes the APMCs dormant, this will lead to its collapse and hence the pricing will be set by the ‘big-players’.
- Though the Prime Minister, Shri Narendra Modi has promised MSP, the bills nowhere mention about it. This will undermine farmers’ rights and will exploit them.
- Earlier the APMCs had the monopoly, now the same will be handed to the big corporates. This will disbalance the end-to-end prices, which may affect both the farmers and consumers.
- The corporates will have an upper hand at the price declaration. This won’t help small and marginal farmers.
- At the time of disputes, farmers may lose due to a lack of legal knowledge.
14 YEARS of abolishment of APMC in Bihar, what it teaches?
Bihar abolished the APMC, way back in 2006. Over the years the government failed to ensure MSP to the farmers. The procurement has been declining since time immemorial. This year Bihar procured only 0.22 LMT of crops. The state is unable to procure the crops and the farmers are living miserably.
Similarly, in the western countries, the idea of neoliberalism hasn’t performed well.
REFORMS AND SUGGESTIONS FOR A BETTER MARKET-
The new farmers bill 2020 doesn’t solve the problems very well. The government can take a better approach than installing a parallel free market in its new farmers bill 2020. Firstly, the government can look for a hybrid system that considers good points from the APMC and the new farmers bill 2020.
- Withdraw interventions, but make the transactions transparent.
- Provide better MSPs.
- APMC committees must hold seats for the farmers. This APMC committee will be empowered to regulate price-hikes.
- Single license for every market in the same state.
- Make the APMC system well organized. A separate body to look for price-checks.
- Reduce the cess.
- Improve the infrastructures like warehouses, cold storage, etc.
- Remove restrictions from the trade yards in the APMC system and allow farmers to sell in different mandis.
ALSO READ- Democracy, Humanity & War
Both houses have passed the new farm bills in 2020. But was the way, democratic? Did the government negotiate with farmers’ organizations?
Is the government listening to the demands of the farmers?
In a democracy, a bill must undergo negotiations. Secondly, the government can look to improve the previous system and make it collaborative with the corporates to increase competition as well as stability. In the long run, this new system will become the same as APMC. Different farmers have different perspectives to see the new farm bills but still, it doesn’t assure a better system.