Explained: Are New Farm Bills Anti-Farmer? All You Need To Know

On Sunday the Parliament gave nod to three farm Bills by passing them in Rajya Sabha. The three Bills – The Farmers (Empowerment & Protection) Agreement of Price Assurance and Farm Services Bill, The Essential Commodities Act (Amendment) Bill and Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill – will now become a law as soon as President Ram Nath Kovind gives his assent.

The Bills touted as agricultural reforms by the Modi government have several issues. First-of-all Agriculture is a state subject and the Central government has stepped into a domain which was not a part of its regulation. Secondly Indian farmers most of which have small land holding on average of less than 1 acre feel that the laws will make them even more vulnerable as they give an edge to corporate and agri-business companies. The Bills have left the farmers agitated and divided due to several reasons.

For better understanding let’s peak into the bills and their major points of contentions.
1. The Farmers (Empowerment & Protection) Agreement of Price Assurance and Farm Services Bill: It draws a framework for contract farming agreement between farmers and buyer before sowing of a crop and for dispute settlement prescribes three level mechanisms – the conciliation board, sub-divisional magistrate and appellate authority. However, the points of contention are:

 a) Under this law it’s not mandatory for a company to make a written contract with the farmer for any contract farming. So, even if the company violates the terms of the contract, the farmer cannot prove it.

 b) It does not have any provision to penalize companies which do not register their contracts. For eg: Last year, Potato farmers from Gujarat witnessed a big issue where Pepsico attempted to penalize potato farmers for growing the same seed varieties. The farmer organizations finally had to knock on the doors of the court and agitate to get justice.

c) Bill does not prescribe or specify that contract price of the crop should be at least equivalent or above the MSP. It means the contractor/companies can pay whatever price they want to the farmer. India’s experience of the contract farming has been poor with farmers getting very low rates through contract farming as compared to selling it in government mandis on MSPs (Minimum Support Price).

2. The Essential Commodities Act (Amendment) Bill: It empowers the Central government to regulate food items in extraordinary circumstances or impose stock limits if there is a steep price rise. However, the points of contention are:

a) Till now only farmers, farmer cooperatives and Farmer Producer Organisations didn’t have any limit or restriction for stocking, producing or selling their crop. As a result, they take conscious decision of selling their crops only when the market or the buyer is offering good price for the crop. So, under this bill the farmers are not getting any new freedom. On the contrary the government is now removing all the foodstuffs from this category allowing companies and traders to store as much quantity of food as they want which amounts to promoting hoarding.

b) Through this Amendment the government is giving up its power to prevent hoarding and controlling price inflation. According to the law, government can intervene only if there is 50% price rise over previous year’s price in case of non-perishable goods and 100% price rise over previous year’s perishable goods.

3. Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill: It allows intra-state and inter-state trade of farmers produce beyond the physical premises of Agricultural Produce and Livestock Market Committee (APMC) markets. State will be now prohibited from levying any market fees or cess outside APMC areas.

a) The government says that now the farmers will have freedom to sell to anyone. Under the bill, the agri-business companies, corporate and traders will be allowed to open their own markets to purchase from farmers. However, the biggest fear coming from this is that it will destroy the level playing field between the APMC markets and other traders. Under the bill, the trade outside the APMC Mandis is virtually unregulated.

b) Farmers were demanding that in case the government is allowing, new set of farm markets to come up; the state and local government should be given power to oversee their functioning and also regulate them. However, the demand has been ignored.

c) Presently if the farmers feel the traders/corporate/agents working inside the APMC Mandis are involved in any unfair practices, they could complaint to the APMC Officers located in the yard itself. However, with the new Bill, in case of any disputes, farmers would be required to go to a sub-divisional magistrate court – which is beyond the capacity of small farmers to pursue given their financial constraints.