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Farm Bills and politics over it

By Uday India Bureau
Updated: October 5, 2020 11:40 am

The Monsoon session of Parliament has passed three important farm bills, namely,  Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020,  Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020, and Essential Commodities (Amendment) Bill, 2020.


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

The new legislation will create an ecosystem where the farmers and traders will enjoy freedom of choice of sale and purchase of agri-produce. It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations. The farmers will not be charged any cess or levy for sale of their produce and will not have to bear transport costs. The Bill also proposes an electronic trading in transaction platform for ensuring a seamless trade electronically. In addition to mandis, freedom to do trading at farmgate, cold storage, warehouse, processing units etc. Farmers will be able to engage in direct marketing thereby eliminating intermediaries resulting in full realization of price.

Clearing all the doubts over this issue, the government has said that Procurement at Minimum Support Price will continue, farmers can sell their produce at MSP rates. Mandis will not stop functioning and trading will continue here as before. The government also says that Under the new system, farmers will have the option to sell their produce at other places in addition to the mandis. The e-NAM trading system will also continue in the mandis. Trading in farm produce will increase on electronic platforms. It will result in greater transparency and time saving.

Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020

The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field. Price assurance to farmers even before sowing of crops. In case of higher market price, farmers will be entitled to this price over and above the minimum price. It will transfer the risk of market unpredictability from the farmer to the sponsor. Due to prior price determination, farmers will be shielded from the rise and fall of market prices. It will also enable the farmer to access modern technology, better seed and other inputs. It will reduce the cost of marketing and improve income of farmers. Effective dispute resolution mechanism has been provided for with clear timelines for redressal. Impetus to research and new technology in the agriculture sector.

Clearing all the doubts over this issue, the government says farmer will have full power in the contract to fix a sale price of his choice for the produce. They will receive payment within 3 days. 10000 Farmer Producer organizations (FPOs) are being formed throughout the country. The FPOs will bring together small farmers and work to ensure remunerative pricing for farm produce.  After signing the contract, farmers will not have to seek out traders. The purchasing consumer will pick up the produce directly from the farm. In case of dispute, there will be no need to go to court repeatedly. There will be local dispute redressal mechanisms.

Essential Commodities

(Amendment) Bill, 2020   

Essential Commodities (Amendment) Bill 2020 seeks to amend the Essential Commodities Act, 1955 and empowers the central government in terms of production, supply, distribution, trade, and commerce of certain commodities. It also seeks to increase competition in the agriculture sector and enhance farmers’ income.  The bill aims to liberalise the regulatory system while protecting the interests of consumers.

The bill empowers the central government to designate certain commodities including food items, fertilizers, and petroleum products as essential commodities. Supply of certain food items including cereals, pulses, potato, onions, edible oilseeds, and oils, can be regulated by the government under extraordinary circumstances as per the provisions of this bill.  The extraordinary circumstances include war, famine, extraordinary price rise and natural calamity of grave nature.

The Essential Commodities (Amendment) Bill, 2020 empowers the central government to regulate the stock of an essential commodity that a person can hold.  The provisions of the bill regarding the regulation of food items and the imposition of stock limits will however not apply to any government order relating to the Public Distribution System or the Targeted Public Distribution System.


By Uday India Bureau


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