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What are Farm Laws?
The new Farm Laws, also known as Indian Agriculture Act 2020/Farm bills, are three acts: The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020; The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020; and The Essential Commodities (Amendment) Bill, 2020.
The Three Farm Laws are as follows:
- Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020
The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 is an act of the Indian Government that permits intra-state and inter-state trade of farmers' produce beyond the physical premises of Agricultural Produce Market Committee (APMC) market yards (mandis) and other markets notified under state law. Farmers are free to sell their produce to anyone, anywhere, and support seamless electronic trade without any barriers.
The State Governments are prohibited from levying market fees on farmers and traders for trading farmers’ produce in an 'outside trade area.'
How does it help?
- This ends the monopoly of traders
- Infuses competition among buyers
- Assures better returns to farmers, thus raising their income
- Enables free movement of farm produce from surplus areas to deficit regions
- Provides a platform for a national market, eliminating high intimidation cost mandis
- Gives consumers access to better and cheaper crops and other produce
- The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020
The Farm Laws 2020 provide a national framework on farming agreements that empower and protect farmers to engage with wholesalers, exporters, processors, agriculture business firms, or large retailers to avail of farm services and sell their farming produce at a mutually agreed remunerative price framework.
Prior to the production or rearing of any farm produce, the new Farm Laws provide a farming agreement between a farmer and a buyer. The pricing of farming produce and process must be mentioned in the agreement. This allows farmers the chance to gain more profit in accordance with fluctuating market conditions, as there are higher chances to earn significant profits. The Act does not permit using farmland as a mortgage, lease, or making any modifications to the land.
How does it help?
- Drives tie-ups with large farmers
- Assures farmers of prices before sowing
- Transfers market risk from farmer to sponsor
- Provides farmers with more access to fertilizers, pesticides, and quality seeds
- Attracts private investment in farming to the global market
The Essential Commodities (Amendment) Bill, 2020
The Essential Commodities (Amendment) Bill, 2020 allows the Central Government to regulate certain food items during extraordinary circumstances like war and famine. Stock limits are imposed on agricultural produce only if there is a steep price rise. This bill allows the agricultural sector to get more exposure to private investment. It opens up the possibilities of funding for farmers to promote crop production.
How does it help?
- Removes oilseeds, edible oils, onion, pulses, cereals, and potatoes from the list of essential commodities
- Stock limits are imposed only under exceptional conditions
- Assists consumers and farmers in ensuring price stability
- Liberalizes the regulatory system while protecting consumer interests
Is India’s new forum a death for farmers?
Since November 2020, thousands of farmers have been protesting against Farm Laws on the highways of the outskirts of Delhi. All the opposition parties are also calling it a death warrant.
Actually, the issue is that it is still unclear how labor laws will play out in reality. Farmers are mainly concerned that it will eventually lead to the end of the wholesale markets and assured prices, which would leave them with no back-up option. This implies that if farmers are not satisfied with the prices offered by a private buyer, they cannot return to the mandi or use it as bargaining during negotiations.
Supreme Court stayed the implementation of the Farm Acts 2020
The Supreme Court has stayed the implementation of the Farm Laws 2020. The panel has notified a dedicated portal to fetch views of farmers individually. However, the Agriculture Minister reiterated that the Centre is not going to repeal Farm Laws 2020 but is ready to discuss other options with farmers.
