India has always been an agrarian economy. Agriculture sector shares around 20.5% in the GDP of India and around 70% of the country’s population depends upon agriculture for livelihood. Agricultural business in India has never been profitable for farmers as they were confined due to prevailing system of zamindars and money lenders. But this system was extremely exploitive so to end this; Government introduced a new framework known as APMC (Agriculture Produce Market Committee). It was introduced exactly at the same time when the green revolution started in India. Additionally, APMCs set up mandis or markets across the India were farmer’s produce were sold. Here the farmers sold their produce not to any public authority but to the middlemen also referred as “Arhatiyas”. Middlemen acted as an agent between the farmers and traders. This gave rise to yet another issue. The middlemen started exploiting the farmers where they bought the farmer’s produce at MSP (Minimum support price) but sold at higher prices to the traders.
As of late, the Indian government drafted a set of farm bills also referred as Indian Agriculture Act, 2020 asserting that these laws will tackle all the issues of the farmers. Thus, the Indian Parliament has passed three Farm Bills which have also received the President’s assent on 20th September 2020 which is why our country is witnessing gigantic protests of farmers. This Act conceives to acquire changes in certain portions of the Agricultural economy. For instance, trade in agricultural commodities, stock limits for essential commodities, price, farm services, etc. These acts also sought to bring reforms by eliminating the exploitation of the mediators and allowing farmers to take the market.
On the contrary, farmers believe that the new proposed bills are more likely to exploit them. Thousands of farmers at Delhi borders focusing over 30 farmers union are undermining to heighten the disturbance of the nation if the government does not recall these 3 Farm bills. These Farm Bills are:
(1) The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
(2) The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020
(3) The Essentials Commodities (Amendment) Bill, 2020.
The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 promotes the idea of ‘One Nation One Market’ and creates an ecosystem where farmers will not have to pay taxes on the produce they will sell in the market i.e. there will be a barrier free sale.
Not only this but, it will also end the monopoly of APMCs (Agriculture Produce market Committee). APMCs condemn setting up of other markets. Some states have made it mandatory for farmers to trade only with APMC merchants. But this new legislation would help the famers to sell their produce as per their choice.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Bills Services Bill, 2020.
This bill sets up a framework for contract farmingwherein the farmers and the buyer can strike a deal even before the production takes place. This legislation will empower the farmers to engage with retailers, wholesalers, exporters, etc without the fear of exploitation.
This newly proposed bill will act as a catalyst to attract private investments for the agriculture sector which will build supply chains to national and global markets.
ESSENTIAL COMMODITIES (AMENDMENT) BILL, 2020
This bill is an amendment made to the Essential Commodities Act which removes onions, seeds, pulses and other products from the list. This amendment contained in the Essential Commodities Bill will help to settle and stabilize the prices of these products.
For Instance, if the onion supply is more than its demand, it can be stored in order to avert the price from falling. Not just this but, it also improve the cold storage facility in India.
BENEFITS OF THE FARM BILLS:
ONE NATION, ONE MARKET
This can end the monopoly of “Agricultural produce Market Committees” (APMCs). APMCs condemn setting up of other contending markets. With the introduction of Farmers Produce Trade and Commerce Bill, farmers can now sell their produce as per their choice and the issue of middlemen which is one of the loopholes of APMCs will be eliminated.
Attracting private Investments
It will pull in private investments in the farming business. Private speculations can improve the framework of the agricultural sector which can prompt its modernization. This will in fact increase the competition to buy the produce and can fetch better prices for farmers.
CONTRACT FARMING
Contract farming will be beneficial for farmers since they’ll get price assurance even before the production takes place.
REDUCTION IN PRE-HARVEST INPUTS
Corporates would even provide requisite materials to the farmers which will in fact reduce the cost of inputs.
Alternate channels to sell & Inter and Intra state barrier free sale.
Now the farmers do not have to restrict their sale by selling their produce only in the mandis set up by APMCs controlled by the state government they can now sell their produce as per their choice. Moreover, the sale of produce would not be levied with any taxes by the government.
Better market linkages and efficient supply chains
The Farm Bills will create tailwinds for start-ups focusing on agritech. Anybody working on digital farmers platforms will be profited by the new act and empower them to directly interface with farmers. Not just this, it open up avenues and let farmers directly interface with agro service providers.
WHY ARE FARMERS PROTESTING?
On the contrary, many farmers unions and political parties believe that the new proposed farm bills are more likely to exploit the farmers. The protests continued to happen even on 26th January 2021 on the Republic Day and challenged the government by attacking and harming the police and hosting their own flag at the Red Fort.
The protest which was initiated peacefully at first has turned out to be a war like situation. But, this question must have been aroused in your mind at least once, if the act claims to benefit the farmers and uplift the agricultural sector than why are the farmers protesting? Here we’ll burst some myths about the farm bills and clear out certain facts as to how the rumours have taken the shape of miscommunication between the farmers and the central government resulting into protests.
MYTH: The congress led government in Punjab has described the legislations as a blatant attack on the federal structure saying the laws are highly central oriented.
REALITY: The state government is worried about losing the state revenue because these APMCS were controlled by the state govt. Moreover, the centre is not interfering with prices or any other matter concerned to the farmers. The centre is just providing protection to the farmers.
MYTH: The Central Government is trying to propel farmers towards the trap of contracts with the major Corporates.
REALITY: Firstly, it is not the first time that contract farming is implemented. The contract will guarantee the farmers to get the fixed price and farmers can withdraw the contract at any given point of time without penalty.
MYTH: State Governments are losing the APMC law due to the Agricultural Bills executed by the Central Government.
REALITY: No, they do not lose APMC law. The rights associated with APMC will not be encroached upon. It is not unknown that APMC has been inefficient with farmers relying on APMC merchants to sell their produce. This new system eliminates the predatory agents and farmers will have the opportunity to sell their produce either in the APMC discounted mandis or in “Exchange regions” outside the ward of APMCs made according to the farm bills.
CONCLUSION
We as researchers have researched upon the main reason behind the enactment of this ‘Farm Bills’ by the Indian Government. Further, the benefits of this particular farm bills give rise to many investments in agricultural field, good earnings to farmers, selling of produce by farmers itself at their own price or at market price. The manner in which the bills were passed created mistrusts among farmers on government sidelining the positive sides of the bills such as modernising Indian agricultural sector. Even though the primary concern is to guarantee the advancement of farmers but it is the duty of government to assess farmer’s issue and take their opinions. We have also discussed about some myths and realities about this farm bills for those who have misconception about certain issue regarding the new farm bills, 2020.
These laws set up a framework for contract farming wherein the farmers and the buyer can strike a deal even before the production takes place. This legislation will empower the farmers to engage with retailers, wholesalers, exporters, etc, without the fear of exploitation. These laws will act as a catalyst to attract private investments for the agriculture sector which will build supply chains to national and global markets.