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Farm Bills: Rumours Vs. Truth

After receiving the assent of the Lok Sabha, the Rajya Sabha on September 20 passed The  Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020.

The two bills are aimed at transforming agriculture in the country and raising farmers’ incomes.

However, a lot of rumours have been going around about the bill saying that it is anti-farmer with the usual rhetoric of that the bill is an attempt to make Ambani and Adani rich.

In this article, we bust some of the rumours and false rhetorics floating around:

Rumour 1:  MSP will be scrapped

Truth: The government has clarified that procurement through Minimum Support Price (MSP) will continue and  farmers can sell their produce at MSP rate. Mandis will continue to function and trading will continue as before. Under the new system, farmers will have the option to sell their produce at other places in addition to the mandis. Since the coming of Modi government in 2014, the MSP for paddy, wheat and pulses have been increased 24, 177 and 75 times respectively.

Rumour 2: State APMC acts will be diluted

Truth: The two bills that have been passed will not lay a finger on the State Agricultural Produce Market Committee (APMC) Acts as they are state Acts. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 seeks to create more avenues for farmers to sell their produce. It will promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations.

In simple words, it empowers the farmers by giving them the choice to sell their produce where they get a better price.

Rumour 3: Government is conspiring to sell the lands to rich capitalists and industrialists

Truth: The bill provides for contract farming between a buyer and farmers. A contract farming agreement between the farmer and the buyer must provide for a conciliation board as well as a conciliation process for settlement of disputes. The board should have a fair representation of the parties to the agreement.  The bill proposes to create a three-level dispute settlement mechanism: the conciliation board, Sub-Divisional Magistrate and Appellate Authority. At first, all disputes must be referred to the board for resolution. If it remains unresolved for more than 30 days, parties may approach the Sub-divisional Magistrate for resolution. If the parties are not satisfied with the decision of the sub-divisional magistrate, they will have a right to appeal to an Appellate Authority which will be presided by collector or additional collector. Penalty can be levied by the Magistrate or the Appellate Authority on the party contravening the agreement.

However, sale, lease or mortgage of farmers’ land is totally prohibited and farmers’ land is also protected against any recovery.

Rumour 4: Farmers will be disadvantaged in terms of fixing the price

Truth: The farmer will have full power in the contract to fix a sale price of his choice for the produce. They will receive payment within maximum 3 days.

Rumour 5: Buyers will exploits farmers

Truth: The price of farming produce should be mentioned in the agreement.  For items where prices are subjected to fluctuations, a guaranteed price for the produce and a clear reference for any additional amount above the guaranteed price must be specified in the agreement. The process of price determination must also be mentioned in the agreement. Thus, this bill will encourage farmers to engage with processors, wholesalers, aggregators, large retailers, exporters etc., on a level playing field.

Rumour 6: Farmer will be severely hit if there are market fluctuations

Truth: Price will be assured 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.

If the bills are said to be of benefit to the farmers, why is there opposition to it?

Agricultural produce selling has 3 major stakeholders at play apart from the farmers: commission agents, state mandis and bureaucracy. The local APMC mandis are heavily politicised with the commission agents and middlemen having political influence gulping a major portion of the profit. The existing system leaves the farmer parched with less money. Once these reforms are implemented, those who have been making money at the cost of farmers will stand to lose. The middlemen commission and patronage structure will disappear. It is these middlemen who stand to lose who are against the bill.

Why are these reforms needed?

Agriculture sector though being the biggest employer, does not contribute much in terms of Gross Value Added. This is because the archaic laws and regulations does not provide any incentives for investments in agriculture. Only if there are private investments, farmers will get access to high quality farm inputs. These investments will help the farmer to put use better technology on the farm and increase the productivity. Better productivity will benefit both the businesses and farmer thereby unleashing the potential of the agriculture sector.

 

 

 

 

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