Farm Bill: An Analysis

Author: Vaishnavi Dandotikar, ICFAI Law School, Hyderabad

Recently, farmers all over India carried out large-scale protests against the Central Government’s new amendments to the Agricultural Produce Marketing Committee Act. The farmers were unhappy about the proposed (now legislated) reforms which the government has implemented in order to achieve their goal of doubling farmer’s income by the year 2022. 

Farmers from the states of Punjab and Haryana were at the forefront of the protests. They fear that due to the new amendments, they will lose the little profit that they are presently making. The farming community and the public at large feared that the industry might now be dominated by private individuals who might drive up the prices of produce all the while exploiting farmers. 

In an interview to Al Jazeera, one of the farmers at the protests said – 

“The government has left us at the mercy of big corporations.”

This is one of the most common fears among farmers. Before the now-repealed law was brought into force, the way in which the farmers went about selling their produce was by selling it at the state mandis which were set up under the Agricultural Produce Marketing Committee Act. 

New Provisions – 

Under the new law, the following reforms have been brought about – 

  1. The farmers aren’t forced to sell their produce at the government mandis. Instead, they can sell it to anybody they like. This is a part of the government’s one nation, one market initiative. 
  2. The price at which the farmer shall sell their produce will depend on the predetermined quality of their product. This was introduced to reduce the risks taken by the farmer and to ensure that they receive profit. 
  3. Agricultural produce such as cereals, pulses, onions, oilseeds and edible oils have been removed from the list of essential commodities as mentioned under the Essential Commodities Act, 1955. 
  4. Provisions have been introduced to deter large scale purchase of produce by the middlemen so as to prevent the sudden rise and fall in prices. 
  5. Owing to the fact that state-run mandis no longer enjoy a monopoly over buying the produce, the state government’s shall miss out on the tax which they were collecting from these places.
  6. The new provisions do not affect the MSP (minimum support price) initiative of the government. 

Why are the farmers protesting? 

Despite the government’s claims that these initiatives will boost the farmers’ income and that it will double their income by 2022, farmers from many states have been protesting endlessly urging the government to get rid of its new provisions. 

Farmers from the states of Punjab and Haryana can be seen to be at the forefront of this activity. The farmers fear the private individuals will monopolize the market over a period of time. In a statement to BBC Punjabi, a farmer was found saying – 

“First, farmers will feel attracted towards these private players, who will offer a better price for the produce. The government mandis will pack up meanwhile and after a few years, these players will start exploiting the farmers. That’s what we fear,”

This seems to be one of the main concerns among the farmers. They fear that the government will go back on its word and withdraw the MSP system thereby leaving the farmers at the mercy of the big corporations. 

Another thing is that due to their inability to make a profit, they will be forced to sell their agricultural land and thereby be rendered landless. The farmers appear to have a general distrust towards private players. More than the large landholders, it is the small landholders who seem to be the most worried for they neither have the access to proper storage spaces nor do they have the resources using which they can sell their produce. 

Amidst all this, opposition leaders have taken to the streets to take a stance in favour of the farmers and have urged the government to not implement the recent reforms. 

Economist Ajit Ranade commenting on the issue said – 

“Giving them the freedom to the farmer to sell outside the mandi system, to whoever is a welcome step, in unshackling the farmer. But you need the mandi system to coexist with a private trading system. Perhaps the government needs to come out with a written law that they will not withdraw the MSP or the mandi system.”

 From their demands, it can be summarised that they prefer not having to deal with individual corporations. Carrying on business with the government at the state mandis seems like a sure way to earn a profit. 

Actions taken by the Punjab and Haryana Governments – 

The Punjab State Legislative Assembly in the wake of the farmer’s protest, recently passed the  Farmers’ Produce Trade and Commerce (Promotion and Facilitation) (Special Provisions and Punjab Amendment) Bill, 2020. 

The main provisions of the bill are – 

  1. Provides a law which bard the selling of paddy and wheat below the MSP. Forcing a farmer to do so, is an offence punishable with a fine and imprisonment which shall not be less than three years. 
  2. In its attempt to protect the interests of the farmers in the state, the bill provides that anyone who buys produce below MSP shall be punished with imprisonment of three years. 
  3. Through this bill, the Assembly aimed to suspend all of the Central Government’s new provisions. It has provided that no one will be held liable for violating the Central Government’s provisions under the new reforms. 
  4. Provides for clauses that prevent the hoarding of produce by middlemen.

This bill was passed by the Assembly under article 245(2) of the Constitution according to which the state governments have been granted the right to make changes to the central government’s legislation on subjects that fall under the concurrent list. Such an amendment must be approved by the President. The bill is yet to receive the consent of the President. 

Conclusion – 

The future of the Indian farming industry will be gravely impacted by the President’s decision to either grant or deny his assent to the Bill introduced by the Punjab State Assembly. 

While the Central Government’s aim to improve the farmer’s income is commendable, the way in which they are carrying it out seems rather foolish. In the words of Devendra Sharma, an agricultural policy expert, 

“There are leakages in the current system, and it needs to be reformed, but replacing one failed model with another is not the solution. Leaving farmers to the tyranny of the markets would be akin to putting the sheep before the wolf,”

Perhaps a review of the provisions of the reforms is warranted. Something that will dissuade the concerns of the farmers and those of the experts. 

References – 

  1. “Farm bills: Are India’s new reforms a ‘death warrant’ for farmers?” BBC News, Sept 23. 2020. 
  2. “Why Indian farmers are protesting against new farm bills” Al Jazeera, Sept 23. 2020.
  3. Indranil De, Sanjib Pohit, “Rich farmers dominate farm protests in India. It’s happening since Charan Singh days” The Print, Sept 30. 2020.
  4. Vaibhav Palnitkar, “Here’s Why Farmers Are Protesting the 3 New Agriculture Ordinances”, The Quint, Sept 21. 2020. 
  5. The Constitution of India, art. 245(2). 
  6. Man Aman Singh Chhina, “Punjab Assembly rejects Centre’s farm laws, clears own with MSP benchmark”, The Indian Express, Oct 21. 2020.