After the Monsoon session of Parliament began this week, the Centre introduced three Bills in the parliament which seek to replace the recent ordinances to allow barrier-free inter-state trading of farm goods and contract farming. The Lok Sabha on Thursday passed two bills aiming to liberalise the agriculture sector and provide freedom to farmers and traders to trade at a venue of their choice, outside the established Agriculture Produce Marketing Committee (APMC) regulated structure.

The two bills — The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020, were passed after a five and a half-hour debate in the lower house.

Farmers expressed their outrage over the passage of these ordinances by the Centre which they called “anti-farmer”. The farmers are more concerned with the first ordinance. Farmers fear that this ordinance will end the Mandi system of selling agricultural products and will lead to the sale of their products below the Minimum Support Price or the MSP. Hundreds came out on streets in Haryana’s Kurukshetra to oppose the new laws promulgated without deliberation in the Parliament. They even blocked the Delhi-Chandigarh national highway for a couple of hours, following which the police used force on the protesting agrarians.

What are the three bills about? 

Three Bills are:

The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020

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

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020.

The first among them is the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance 2020, which allows farmers to sell produce outside the markets notified under the various state agricultural produce market laws (state APMC Acts). While ‘The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020′ aims to promote inter-state trade, give farmers and traders the freedom to sell or purchase agricultural produce outside the established APMC markets and provide a framework for electronic trading of the produce, ‘The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020’ makes it possible for farmers to enter into a direct contract to sell their farm produce.

Why are the farmers protesting against the Bills?

Farmers fear that the Centre will end the current system of open-ended FCI procurement. Farmers in Punjab think that the Food Corporation of India (FCI) and other central agencies will shut down annual wheat and rice purchases from the states, leaving them at the mercy of traders’ predatory practices. The central government’s repeated assurances that the ‘MSP will continue’ are being called deceptive by various farmers’ collectives. It is to be noted that the Centre distributes the annual wheat and rice procured from the farmers in Punjab through the Public Distribution System (PDS), and the farmers feel that the ‘unlimited procurement’ will be ended by the government’s new bill.

Another feature of the bill that is likely to have an adverse impact on farmers’ incomes and also on the state revenue is doing away with the mandi tax for produce traded outside the APMC market. Under the new law, no market fee will be levied on goods sold outside the mandis.

How will these Bills benefit farmers?

According to the centre, bills will bring revolutionary changes in the lives of farmers. It will fulfil the expectations and the needs of the country from agriculture. The farmer will get attracted towards comparatively good crops, and if the farmer produces costly crops his income will automatically increase and he will also support agriculture growth.

Bills will not affect the Minimum Support Price (MSP)” and that these will help in making the farmers more advanced. “MSP was, MSP is, and MSP will continue in the future.”

Through these reforms, farmers will connect directly with the big traders and exporters, bringing profit to agriculture. Bills do not affect the State APMC Act. APMC will be in the state but there will be inter-state trade outside its periphery and the farmers will be able to sell their produce from their field, home and any place after the legislation comes into existence.

 What is the government’s point?

The government said the provisions will be beneficial to all: farmers, consumers and traders. “Almost all agriculture experts and economists were batting for these reforms in the agriculture sector. The Centre was also persuading states to implement the Model APMC Act, 2002-03. But the states did not fully adopt it. Therefore, the Centre had to adopt the ordinance route. It will lead to helping farmers realise a better price. This is very forward-looking legislation and it is a win-win situation for all farmers, consumers and entrepreneurs,” said Ramesh Chand, member of NITI Aayog.