AGRARIAN REFORM 2.O

 Government of India on June 2020, passes a two new bills and amended the one previous bill related to Agriculture. Bills are 1) Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Ordinance Act .

2) Farmers (Empowerment and Protection )Agreement on Price Assurance and Farm Services Ordinance.   

3) The Essential Commodity (Amendment) ordinance, 2020.

According to government this three bills will ensure the better development of the Indian agriculture system. But passing of these bills have created a lot of chaos in the country farmers as well as the various political parties and states. Lets discuss everything in detail.

Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Ordinance Act .

This act deals with the trading of the farms produce, which can be understood  under  following criteria:-

a) Government have allowed the private players to enter in the sale and purchase of the commodities. Which earlier was reserved to the government authorities only.

b) Allowing the free outside trade area for sale and purchase of the commodities. Which earlier was reserved only inside the APMC markets.

c) Electronic trading also get the green light with the condition of the companies to have a PAN under income tax Act 1961.

d) State government  are ordered not to levy any charges , market fees or cess from the Outside trade area and E Trading.(1)

 Farmers (Empowerment and Protection )Agreement on Price Assurance and Farm Services Ordinance.

This act deals with the providing a farmer protection from the exploitation, which can be understood from  below

a) There should be farming agreement between the Farmer and buyer of the commodities. Minimum period of the agreement should be one crop season or one production cycle  of livestock and maximum period is upto 5 years.

b) Price of such purchase should be mentioned in agreement.

c) Three level dispute settlement Mechanism is set up i.e, Conciliation Board, Sub Divisonal Magistrate and Appellate Authority.(2)

The Essential Commodity (Amendment) Ordinance, 2020.

Earlier essential commodity act ,1955 is amended by the government in order to promote the proper implementation of the earlier act . The changes made are listed below:-

a) Removed the commodities such as cereals, pulses, potato, onion edible oilseeds and oil from the essential commodities. Also to be regulated by the government only case of uncertain condition such as war or emergency situation.

b) No government restriction on the stock limit . Action against the stock limit can be taken only based upon the price rise if there is  a) 100% rise in the retail price of horticulture products. b) 50% rise in the retail price of the essential goods or food stuff.(3)

These act are passed by the government from  the view point to increase the competitiveness among the farmers and to increase the income of the farmers by allowing the free trade within nation . Also by bringing privatization in this sector can lead to development of the agricultural sector in the form of the structural transformation. Along with the farmers income increase the bills can also helps in increasing the Indian economic growth which have fallen badly in this pandemic situation. 

Now the question is what is of the serious concern for the farmers regarding this bill . The Major concerns lies here that farmers are afraid they might lose their only source of income with these bill passing. Now one must be thinking HOW? So here are the answers       

In one of the bill government ordered the states to not to levy any market fees or cess  from outside trade area and E trading but no such removal order is passed for the MANDIS. Mandis are charged with a market fee of buyer and licensing fee  from the agent by the state govt. It is about 14.5%(taxes as % of MSP)  high in Andhra Pardesh for the Rice and 14.5% high in Punjab for wheat. Any farmer if want a sale of their product , with the prevailing condition why they will go for the mandis. Indirectly the MSP or the MANDIS will be destroyed .(4)

With the Mandis destruction the small farmers will not get any opportunity for the sale of their products.

Small farmers are also not aware of the proper mechanism of the sale and purchase to private players . With the little knowledge how the farmers will facilitate their product sales.

There are only 6% of the farmers in INDIA who are able to sale their produce around MSP, rest 94% are barely able to sell at 1/3 to 2/3 of the MSP. 

Since the govt have opened the market of farm a product now the question is how the farmers will transport the product from one state to other . No such concern is given on the transportation of commodities . Also if farmers arrange something for the transportation then there will be the transportation chargers which will be included in such food grains which will lead to increase in the price rise of the goods for the consumers. Serious drawback for the consumers.

Private players entry can provide good income for the farmers but for how long . No serious concern on this.

  These will also give rise to black marketing , hoardings, and inflation . Private players aim is just to gain profits , what if the these players start charging high prices from consumers .

By making amendment in Essential commodities act, they  reduce their role in all these dealing and also action against the private players to be taken only when price rise more than 50% for the essential commodities . what if these private players increased the but less than 50% , where the consumer will go . As government have diluted his role .

Government should once again think about passing of these bills. If they want to pass these bills they must include some provision in these such as :-

Government should not completely dilute his role . They must act as the watchdog for the safety and welfare of the farmers.

Concession for the farmers those who going with the idea of intra state sale ,especially the travel concession or transport concession or we can say extra sum should be granted to farmers.

Infrastructure development should also be focused  by the government for smooth facilitation.

An officer should be appointed in each village of nearby the villages who can tell the farmers about the e trading and other procedure.

There should also the removal of the market fees or cess from the mandis .

Govt should define the price structure for the sale of their product. And the price structure should be strictly based upon the current prices or the price covering the cost of the farmers.

Source:-

  The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, Ministry of Agriculture and Farmers’ Welfare, June 5, 2020.

 The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020, Ministry of Agriculture and Farmers’ Welfare, June 5, 2020.

The Essential Commodities (Amendment) Ordinance, 2020, Ministry of Consumer Affairs, Food and Public Distribution, June 5, 2020.

A National market for agricultural commodities- Some issues and way forward.