We have been hearing the term ‘Farm Bill’ but seriously, What is Farm Bill 2020? And how it affects the farmers?
The Farm Bill 2020 refers to the agricultural bills passed by the Lok Sabha on 17 September 2020 and by the Rajya Sabha on 20 September 2020. The bills collectively seek to provide farmers with multiple marketing channels and provide a legal framework for farmers to enter into pre-arranged contracts among other things. The President of India, Ram Nath Kovind gave his assent for the three bills on 27 September 2020. The Farm Bill 2020 includes the three acts
- The Farmers (Empowerment and Protection) Agreement on Farm Services Act, 2020.
- The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020.
- The Essential Commodities (Amendment) Act, 2020.
First of all, What is “The Farmers (Empowerment and Protection) Agreement on Farm Services Act, 2020? And how it affects the farmers?”
It provides a legal framework for farmers to enter into pre-arranged contracts with buyers including mention of pricing and defines a dispute settlement mechanism.
The agreement will outline conditions for the production of farm products and delivery requirements, the farmer then agrees to the supply products based on the quality standards, and in return, the buyer agrees to buy products. The primary purpose of this act is for contract farming whereas the secondary purpose of this act is to provide a nationwide legal framework wherein the farmer produces crops as per contracts and the central government says that it transforms Indian Agriculture and attracts private investment. As we see it does attracts private investment. This act may lead to the exploitation of farmers legally by buyers.
Now coming to the second bill “The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020”. It allows the trading of farm goods outside the Physical premises of Mandi and APMC Yard.
As we know all the subjects in India are divided into three lists
- Union List
- State List
- Concurrent List
Agriculture comes under State List, states like Punjab and Harayana could lose a big source of state revenue. We may have seen our parents going to Mandis’ to buy vegetables and other agricultural products. These Mandis’ are spread across the country. Farmers usually sell their products in Mandis’ and these Mandis’ are managed by the state government through APMC ( Agricultural Produce Market Committee).
There are some conditions for the farmers to sell their products outside Mandis’ because the products which have all the minimum support price need to compulsorily go through Agricultural Produce Market Committee (AMPC).
Otherwise, farmers can directly sell their products to consumers, the small-scale farmers are still doing it now. If a farmer like a larger-scale farmer wants his products to be sold through the government then he has to notify APMC or trade with only AMPC licensed traders. This bill will allow barrier-free trading of Agricultural produce outside the notified APMC Mandis’. With the help of this bill, the state government will not impose any tax on the purchase and selling of agricultural products outside the Mandis.
This Bill is more beneficial to Large-scale farmers because it gives more options to them to sell their products and this bill makes hardly a difference to the small-scale farmers because anyhow, they are selling outside the Mandis.
But the other perspective of this bill is it gives a way to the government to get out of the Agricultural business, once the farmers enter the market, their income will depend upon the ups and downs of the market.
The third bill is ‘The Essential Commodities (Amendment) Act, 2020’.
This is not a new bill, the government had an amendment to the existing bill. Basically, it is a law that controls the production, supply, and distribution of certain commodities.
What is the essential commodities bill?
With the help of this law, the government can include new commodities to the essential commodities list to make sure that they are available to everyone when the need arises and take them off this list when the situation improves. For example, if someone illegally stores onions to create artificial demand (Hoarding) the government adds onions to the essential commodities list under this act to make sure that onions are available to the people at the right price.
Recently in March 2020, the Central government added Masks and sanitizers under this act to make sure that all are available to the people in the pandemic situation at the right price and right quality, and again on 1 July 2020, the government removed them from this act.
The amendment added in this bill is government removed certain commodities like cereals, pulses, potatoes, onions, edible oilseeds, and oils from this act even though they are daily used by everyone. The government will regulate and supply them only in case of Famine, High Price Rise, or Natural Calamities. There are more conditions to add this into essential commodities
- If there is a 50% increase in the retail price of Non-Perishable items like cereals, edible oilseeds, and oils then only the government will add them back into the essential commodities list.
For example, If the retail price of the rice is 100 Rupees/Kg and it suddenly increased to 151 Rupees/Kg then, the government adds them back into the essential commodities list until the situation improves.
- If there is a 100% increase in the retail price of Perishable items like onions, potatoes then only the government will add them back into the essential commodities list.
For example, If the retail price of the potatoes is 50 Rupees/Kg and it suddenly increased to 101 Rupees/Kg then, the government adds them back into the essential commodities list until the situation improves.
In one way this act is a good step because it boosts farmer’s income but on another hand, it leads to hoarding and black marketing.