Landmark Agricultural Reforms

Landmark Agricultural Reforms

Lok Sabha on Thursday passed the Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill.

It has already passed the Essential Commodities (Amendment), Bill.

The government has undertaken landmark agricultural reforms, freeing farmers from restrictions on the sale of their products and ending the monopoly of traders. It has also opened the window for private capital by allowing farmers to enter into deals with large buyers such as exporters and retailers. This is expected to catalyse the sector, bring in much-needed private investment, and boost rural incomes.

Protests by political parties and a section of farm organisations against the bills have heated up parliament but the old system might not favour a majority of farmers who could stand to gain by more choices the new legislations propose.

Key provisions of the proposed legislation are intended to help small and marginal farmers (80% of total farmers who don’t have means to either bargain for their produce to get a better price or invest in technology to improve the productivity of farms.

The three bills passed by both the houses of parliament are:

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020

This Bill replaces the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Ordinance, 2020

Highlights:

Farmers are free to sell their produce to anybody, anywhere

Removes all barriers for intra and inter-state trade in agricultural produce

It supports seamless electronic trade

How does it help?

Ends the monopoly of traders

Engenders competition among buyers

Yields better return to farmers and raise incomes

Farm produce can move freely from surplus to deficit regions

Creates a national market; high intimidation cost mandis will go

Consumer gets better and cheaper products

Reason for opposition:

States will lose revenue as they won’t be able to collect “mandi fees” if the farmers sell their produce outside the registered APMC market.

What happens to “commission agents” in states if entire farm trade moves out of the “mandies”?

Electronic mandies like e-NAM use physical ‘mandi’sstructure. What will happen to an e-NAM if ‘mandies’ are destroyed in absence of trading

The Essential Commodities (Amendment) Bill, 2020.

The GoI, in June 2020, promulgated the Essential Commodities (Amendment) Ordinance, 2020.

Highlights:

Removes cereals, pulses, oilseed, edible oils, onion, and potatoes from the list of essential commodities

Does away with imposition of stock limit except under exceptional conditions

How does it help?

Ends harassment of businessmen and traders

Likely to attract private investment in cold storage, warehouses, processing

Helps reduce wastage as storage facilities improve

Brings price stability and raise farm incomes

Reason for opposition:

The price limit set for “extraordinary circumstances” is so high that they are likely to be never triggered.

Big companies will have the freedom to stock commodities- it means they will dictate terms to farmers, which may lead to less prices for the cultivation.

The recent decision on export ban on onion creates doubt on its implementation.

Farmers (Empowerment & Protection) Agreement of Price Assurance & Farm Services Bill

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 was promulgated on June 5, 2020

Highlights:

The bill relates to contract farming

Allows farmers to tie up with large buyers, exporters, and retailers

How does it help?

The farmer will have assured price before sowing

Transfers market risk from farmer to sponsor

Gives farmers access to high-quality seeds, fertilisers, pesticides

Will attract private investment in farming and link farms to global markets

Reason for opposition:

Farmers in contract farming arrangements will be the weaker players in terms of their ability to negotiate what they need.

The sponsors may not like to deal with a multitude of small and marginal farmers.

Being big PVT. Cos. exporters, wholesalers, and processors, the sponsors will have an edge in disputes.

Union minister Harsimrat Kaur Badal on Thursday quit the Modi government opposing the farm bills that seek to liberalise the agriculture sector. The move came shortly after Shiromani Akali Dal president Sukhbir Singh Badal announced in the Lok Sabha that the minister will quit protesting the Centre’s anti-farmer move. Commodities (Amendment) Bill 2020 — was taken up for a discussion and passed by a voice vote.

“I have resigned from the Union Cabinet in protest against anti-farmer ordinances and legislation. Proud to stand with farmers as their daughter and sister,” Ms. Badal tweeted, hours before the bills were passed by Lok Sabha.

Sukhbir Badal refuted suggestions that his party initially supported the three ordinances, which these bills seek to replace, and asserted that Harsimrat Kaur Badal had expressed her concerns in the Cabinet meeting and also wrote to agriculture minister Narendra Singh Tomar, highlighting “flaws” in the proposed legislations.

President Ram Nath Kovind on Friday accepted the resignation of Food Processing Industries Minister Harsimrat Kaur Badal and, Narendra Singh Tomar has been assigned the charge of the Ministry of Food Processing Industries, in addition to his existing portfolios.

The Rajya Sabha on Sunday passed two contentious farm bills by voice vote as the House witnessed chaotic scenes after some slogan-shouting opposition members lead by the Trinamool Congress climbed on to the chairperson’s podium demanding a discussion.

Opposition members, including those from the TMC, Congress and Left, created ruckus after deputy chairperson Harivansh did not consider their demand for a division of votes on a resolution to send the two bills to a select committee. Amid the ruckus, the House was adjourned briefly.

Opposition MPs came in the well of the House and raised slogans against the bills. Soon after passage of these Bills, Rajya Sabha was adjourned till 9 am on Monday.