On September 17, 2020 the Lok Sabha passed Farm Bills intended at a reform of the agriculture sector. Ever since, there have been numerous protests by farmers as well as other observers. The reforms are expected to accelerate growth in the sector through private sector investment in building infrastructure and supply chains for farm produce in national and global markets. They are intended to help small 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.
What are these bills?
·The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill - on agricultural market reforms
·The Farmers' (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 - about contract farming provisions
·Essential Commodities Act
Together, the three Bills will replace ordinances passed earlier by the Rajya Sabha.
Provisions of the Bills:
·It will allow farmers the freedom to sell their produce outside mandis registered under the state Agricultural Produce Market Committees (APMCs).
·Promote barrier-free inter, and intra-state trade of farm produce, ideally, without threatening the existing structure.
·The second Bill gives farmers a chance to get into direct contractual agreement with buyers to reduce market predictability, eliminate intermediaries and boost farmers' income.
·The Bills intend to facilitate a framework for electronic trading for farmers.
·However, this Bill could mean states will lose ‘commissions’ and ‘mandi fees’.
·The legislation on contract farming will allow farmers to enter into a contract with agri-business firms or large retailers on pre-agreed prices of their produce.
·The Essential Commodities (Amendment) Bill, 2020, seeks to remove commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities.
Who is protesting and why?
Several farmers and experts claim that small farmers may find it challenging to sell away from markets owing to constraints on travel and storage. Also, regarding MSP, farmers assert that the government will not be able to monitor every transaction individually. This will create a problem as prices will be settled outside the markets. Besides, private players could also force them to sell at lower prices. Political parties and farm organisations such as Bhartiya Kisan Union (BKU) and All India Kisan Sangharsh Coordination Committee (AIKSCC) are vehemently opposing the Bills stating these reasons.
The farmers are opposing the ‘The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill because it eradicates the commission system, and while it works in favour of farmers, they argue that commission agents have credibility as their financial status is verified during the license approval process.
However, the Union Government has claimed that the Bills are pro-farmer and that the farmers will earn better income as they get to dictate their own price and do not have to pay transportation charges anymore.