For the past few months, we have been seeing everywhere on tv, in newspapers, and even on social media about the new farmer bill 2020 in India. So I have done some research on this issue.
Which is currently facing by the farmers. Is it really harmful to farmers? let’s understand what’s actually this bill is about?
Background
The farmers are protesting against the three reform bills (which are known as the new farmer bill) since 9 August 2020. Their belief is that this new reform farmer bill is an “anti-farmer law“ and political parties from the opposition also say, it would leave farmers at the “mercy of corporates“.
Introduction
The Indian new farmer bill passed by Lok Sabha on 17th and by Rajaya sabha on 20th September 2020. The reform has been made by the government of India, their motive for this reform is one nation one market.
Types of Farm Bill 2020
1.The farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill 2020
2.The Farming Produce trade and Commerce (Promotion and Facilitation) Bill, 2020
3.The Essential Commodities (Amendment) Bill, 2020
Explanation
1.The farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill 2020 –
This bill is for protecting the farmer’s interest through a legal agreement on price assurance and farm services.
Pros –
Price assurance– for example,
1.If you are a farmer and I’m a business owner and I want to buy your products. It could be rice, pulses, potatoes, etc. for that, I need to get into a legal agreement with you.
And this legal agreement is for farmers’ interests so that a farmer is not being cheated.
2.The second purpose of this act is to provide a nationwide legal framework. Where a farmer will produce crops as per contracts with corporate investors for mutually agreed wages.
The government says that this act will transform Indian agriculture and attract private investors.
Cons –
1.A farmer can be cheated in many ways by a company. Such as suppose I can tell them that I need 1 ton of rice at so and so price. And later I will tell them that half of the rice is not of good quality.
Hence I will change the pricing now. So to prevent this kind of change of thoughts. This bill provides a dispute settlement mechanism between a farmer and a buyer by an established authority.
2.Farm services –
It sounds like A buyer can specifically tell the farmer what quality and grade is required. When to deliver the product and there could be many more such demands. Now, this is called contract farming.
This agreement is to outline conditions for the production of farm products and for their delivery to the buyer’s premises. The farmer then agrees to the supply products based on the quality standard and delivery requirement of the purchaser, etc.
In return, the buyer(company) agrees to buy the product often at a price. That is established in advance that means the primary purpose of this act is for contract farming.
2.The Farming Produce trade and Commerce (Promotion and Facilitation) Bill, 2020 –
This act means that it’s for the trading of farm goods outside of the physical premises of Mandi on APMC yards. Because earlier agricultural trade could be conducted only in the APMC yards like Warehouses and cold storages and Mandis.
But this new act will give farmers the freedom to sell their goods anywhere within the state or outside any states.
You must have seen your parents on Saturday and Monday going to Mandi to buy vegetables and other agricultural products. As these Mandis spread across the nation and farmers sell their agricultural products in these Mandis.
And these Mandis are controlled by the state government through APMC. Now there are restrictions for farmers. If they sell their products outside the Mandis. Then the product that has a minimum support price needs to compulsorily go through APMC.
Otherwise, if you see small farmers can sell directly to consumers which they are even doing before.
But if you are a large scale farmer and you want your product to be produced by the government. Then you have to notify APMC or create with only an APMC license trader.
Pros –
1.So anyhow this bill will allow a barrier-free trade in agricultural produce outside the notified APMC Mandis. With the help of this bill, the state government will not impose taxes on the sale and purchase of on-farm produced outside the Mandis. And give farmers to freedom to sell their products at a good price.
Note– Under the APMC Act, the states can establish agricultural markets, popularly known as mandis in Hindi. The sale of agricultural commodities can occur only in the mandis through auction.
Cons –
- So as you would know that the agriculture comes under the state list. So many states like Punjab and Haryana could lose a big source of state revenue.
2. If you see this bill is beneficial for big farmers. Because they will have, more choices and they can actually start selling to the private players. “On the other hand” this will hardly make a difference to the small farmer.
They are anyhow selling outside the mandis and due to transportation and logistic cost small farmer don’t have any incentive to go a long distance and intra- state to sell the goods.
3.The Essential Commodities (Amendment) Bill, 2020 –
It’s a law that controls the product supply and distribution of essential commodities.
So what are those commodities? These commodities are such things. suppose if you illegally stored them for creating artificial demand or you do black marketing of such commodities.
It will affect the normal life of the people for example- essential food, medicine’s, fuel petroleum product, etc.
With the help of this law, ⚖. The central government can include new commodities when the need arises. And can also take them in the lists once the situation improves.
Pros –
For example – 1. Suppose there is a shortage of onions. And there are traders and wholesalers who have kept a lot in stock in order to create artificial demand. When the demand increases obviously the price will increase.
So the whole idea behind creating artificial demand is to sell a product at a higher price. Now what the central government can do is they can bring onions under the act to make sure.
That onions are available to people at the right price. Recently in March 2020, the central government brought a mask and hand sanitizers under the act.
To make sure that these products are available to the people at the right price and the right quality during the pandemic in India. Then from 1st July 2020, the government again removed them from the essential commodity list.
So the amendment now has been suggested and added in this bill is regarding removing certain commodities as essential. what the government did was removed certain commodities as essential.
So that it will allow the government to regulate the supply and prices, at the time of war, famine, extraordinary high price rises, or natural calamities. And those commodities are cereals, pulses, potato, onion, edible oil seeds, and oils.
Cons-
2. As you can see these commodities are consumed on daily basis by you and me. So obviously its price will go up. And I think that the government has taken a good step towards farmers’ income. Not for us.
The new amendment also states that the government will regulate the stock of these items based on rising prices. Now there are few more conditions into it, you see cereals, pulses, edible oilseeds, and oils are non-perishable items.
They can be stored at room temperature for months or years as they have a longer shelf life.
The government is saying they can take it back to the essential list. If there will be a 50% increase in the retail price of these non-perishable items. For example, let’s assume the cost of the pulse is 100 rs kg.
And its price has been increased to 151 rs kg. Only then the government will interfere and bring it back into the essential list. In order to control its pricing. For perishables items which are onion, potato the limit is set to 100%. for example if the cost of onion today is 50 rs kg.
If the cost will go more than 100% that is 101 rs kg. Only then the government will interfere and bring it back to the essential list.
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