This week, the Lok Sabha passed three agricultural reform bills introduced by the Centre, that have led to massive protests by farmers, farmer unions and agricultural activists in Haryana and Punjab along with some other states. While the Centre states that these bills are aimed at benefiting farmer, farmers, union leaders and activists claim that they shall destabilise the Minimum Support Pricing system and provide exploitative opportunities to big corporations.
Speaking on this matter on Friday, Prime Minister Narendra Modi said, "If anybody has fulfilled the promise made to the farmers, then it is the present BJP-NDA government." Modi also added that farmers are being misled and lied to by opposition members.
However, several allied parties and organisations have voiced their concerns on the farm bills as well. Bharatiya Kisan Sangh (BKS), a Rashtriya Swayamsevak Sangh-affiliated farmers' union, demanded that the Centre send the three agricultural bills to the parliamentary standing committee.
BKS national general secretary Dinesh Kulkarni told the Economic Times, "We have serious doubts whether the current bills will serve any purpose to the farmers and it appears more of a tool for the buyers rather than the farmers."
Eventually, Shiromani Akali Dal (SAD) leader Harsimrat Kaur Badal, who was also the Union Minister of Food and Processing Industry in Modi's Cabinet, resigned from her post in protest and was replaced by Narendra Tomar.
The Three Bills
During the ongoing Monsoon session of the parliament, the government introduced three bills to replace three ordinances introduced on June 5, which were subsequently passed by the lower house of parliament this week. These bills are:
- The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
This bill essentially allows traders to bypass the current APMC mandi system, and trade outside previously designated areas. - The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020
A bill that creates a framework for contract farming through an agreement between farmer and buyer. - The Essential Commodities (Amendment) Bill, 2020
Removes the supply of all food items from regulation under the previous act, except in "extraordinary circumstances". Under such situations, this allows the Centre to regulate supply of certain food items.
Confusion And Contention
The points of contention are the lack on mention of floor pricing methods like the Minimum Support Pricing, and the definitions of words like "trader", "dispute resolution" and "market fee". Farmers' unions are also opposed to the fact that they have not been consulted before passing the ordinance.
Kavitha Kurungati, who represents a network of organisations called Alliance for Sustainable & Holistic Agriculture-Kisan Swaraj told BOOM, "A combination of the bills would enable big players to wipe out competition, and lead to the collapse of the existing mandi system that protects farmers."
The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
Under the state Agricultural produce market committee (APMC) Act, trading was carried out by commission agents who were financially verified and had licences to trade. The new bill - which intends to remove the role of commission agents, or arhatiyas, defines a trader as "a person who buys farmers' produce by way of inter-Statetrade or intra-State trade or a combination thereof, either for self or on behalf of one or more persons for the purpose of wholesale trade, retail, end-use, value addition,processing, manufacturing, export, consumption or for such other purpose."
However, it does not specify any financial requirement or licence in trade areas outside APMC mandis. According to the Centre, any trader with a PAN card can buy farmers' produce in these trade areas.
This has generated fear of traders not fulfilling payments, especially if they have not been verified or are not required to put down a deposit, as mentioned by Kulkarni.
Section 6 of the The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Ordinance, states, "No market fee or cess or levy, by whatever name called, under any State APMC Actor any other State law, shall be levied on any farmer or trader or electronic trading and transaction platform for trade and commerce in scheduled farmers' produce in a trade area."
Kurungati believes that moving from the APMC mandi to a completely deregulated market would leave farmers to deal with big corporations directly, which would provide exploitative opportunities for the latter.
On the matter of destabilisation of the MSP system, she said, "It would be the implication, if the existing mandi system collapses."
Section 3 of the Contract Farming bill states that, "A farmer may enter into a written farming agreement in respect of any farming produce and such agreement may provide for—
(a) the terms and conditions for supply of such produce, including the time ofsupply, quality, grade, standards, price and such other matters; and
(b) the terms related to supply of farm services."
Section 19 of the bill however puts a bar on jurisdiction of civil court. This creates an issue, since the agreements are voluntary - including for written contracts.
Kurungati believes this would be unfair for farmers, who are the weaker party in any agreement. "In fact, what the government should have done is to have ensured that the pricing of farming produce be referenced to MSP as the guaranteed price and the price fixed in the contract should be over and above the MSP," she said.
The Essential Commodities (Amendment) Bill, 2020
Farmers unions and activists believe that this amendment - meant to promote better stocking of farm products - would greatly benefit big corporations in stocking up on such goods in a way that smaller competitors like Farmer Producer Organisers (FPOs) would not be able to do.
While the amended bill says that it was meant to "enhance income of farmers", Kurungati pointed out the Essential Commodities Act of 1955 only put restrictions on businesses and moneylenders from stocking up, and such restrictions never applied to farmers.
"Big business will be able to stock up and dominate the market. This means farmers will be at the mercy of these companies who will dictate the prices - which are likely to fall and lead to less income for farmers," she said.