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Farm Bills 2020: It's Negative and Positive Impacts
Introduction:
By the end of September, The central government of India passed three bills as the replacement of ordinances enacted during the COVID-19 lockdown. They are:
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
Essential Commodities (Amendment) Bill 2020
These bills together were enacted to bring about revolutionary changes in the Indian agricultural system. It also aims at multiplying the farmer's income so that their economic condition is elevated.
Positive Impacts :
The Farm bills enacted by the parliament of India in September 2020 were designed to regulate government interference, fix the lack of uniformity, and help create a national policy. ‘The government aims to deregulate the sector and offer farmers the freedom of choice to sell their produce’. These legislations intend to attract private investment both domestic and foreign into the farm sector. These laws assure farmers more freedom of choice to sell their produce outside the state-designated markets to private buyers.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020:
As per this bill, the farmers and traders will be given the freedom of choice in selling and purchasing agricultural produce. It also enables a barrier-free inter and intrastate trade and trading beyond the physical boundaries of a market for which the farmers need not pay any cess, levy, fees, or commissions. An e-trading platform has also been proposed to be established. Farmers can use their freedom of choice to sell their produce at storages, warehouses, etc( in addition to Mandis) which helps in eliminating the Middlemen and prevent the exploitation of farmers from middlemen
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020:
This bill allows farmers to engage in contracts with agribusiness firms, exporters, Huge Retailers, wholesalers, etc, legally. In such a contract there would be a pre-agreed price even before the sowing of crops, i.e) a price assurance will be given to the farmers. ‘In case the crops are sold at higher prices due to market demands the farmer get profitable prices too’. The market prices are generally very volatile, so there is always a risk of selling the produce at reduced prices and facing losses. This bill transfers this risk of uncertainty from the farmer to a much financially well off sponsor. This happens as there is a price assurance given to the farmers. A dispute redressal mechanism has also been facilitated under the bill.
The Essential Commodities (Amendment) Ordinance, 2020:
The government is the regulator of the production, supply, distribution, trade, and commerce of essential commodities. This new legislation aimed at removing commodities like cereals, pulses, oilseeds, oil, and potato from the list of essential commodities which makes them deregulated. It also seeks to put an end to the imposition of stock holding on these commodities except for certain extraordinary circumstances such as war, famine, natural calamity, and extreme price rise. This is done to attract private investment and FDI into the farm sector.
Negative Impacts :
Farmers however fear the implementation of these new bills and consider them as ‘Corporate-Friendly and Anti-Farmer’ laws. Farmers fear the enactment of these bills for several reasons. Farmers and opposing political parties believe that It will eventually lead to the abolition of MSP (Minimum Support Price) which in turn would lead to exploitation of farmers by private firms. They also fear that these massive private corporations may end up dominating the Indian agrarian sector, where the farmers lose their negotiating power. The essential commodities act removes certain commodities from essential goods and makes stocking of the latter unnecessary. But corporations can stock those commodities and dictate terms to farmers. Also, the process of passing the bill hasn’t been democratic as agriculture falls under the state list but the states were not consulted about the bills. The farmers also couldn’t voice their opinions before passing the bill. There is also no guarantee that the farmer's income will be increased because in 2006 the APMC in Bihar was abolished and ever since then the farmers have been earning lesser than the MSP( Minimum Support Prices).
