The Farm Bills 2020: A Farmers' Perspective

Written By: Gaurika Suri


Source: https://www.organiser.org/Encyc/2020/11/30/Farm-Bills-2020-Demystifying-10-Myths-about-Agriculture-Bills.html


In September of 2020, the Parliament of India passed three new Bills, known as the ‘Farm Bills 2020’. The first of the three, the Farmer Produce Trade and Commerce Bill, aims to provide a greater freedom of choice to farmers. A second bill, the Farmer and Protection Agreement of Price Assurance and Farm Services Bill, focuses on protecting farmers’ interests. Finally, the Essential Commodities Bill seeks to increase farmers’ incomes and empower private investment in the country. In passing the new Bills, tthe Government intends to elevate the poor conditions farmers in India face and provide them with greater freedom of choice. However, the Bills have left farmers far from satisfied and more apprehensive and fretful than they previously were.



The Farmer Produce Trade and Commerce (Promotion and Facilitation) Bill


Under the first Bill, the Government now promises to include inter and intrastate trade of farmers’ produces beyond the physical premises of the Agricultural Produce and Livestock Market Committee (APMC) markets[1] a government-led committee in India. The intention behind this Bill is to increase the choice farmers have to sell their produce, as the legislation now allows them to sell beyond the APMC ‘mandis’[2] and to corporations. It appears that this will benefit the farmers by granting them greater ‘freedom’ to sell. However, the farmers have been reluctant to embrace the proposed legislation for a number of reasons. Firstly, if the farmers are allowed to sell their produce elsewhere, companies will profit and States will lose revenue, since the mandis will soon be removed. The dismay that mandis will collapse and the large capitalists will hold sway is a valid one,[3] especially since trade outside the APMC is largely unregulated.[4] Farmers in certain States in India have voiced their apprehensions more than others. Punjab and Haryana, for instance, have been a hub for protesters. This is particularly because nowhere in the Bill is there a mention of procuring the Minimum Support Price (MSP). The new legislation has completely removed provision for a mechanism that generates a minimum price set by the Government to purchase crops directly from the farmer, ensuring that they receive a fixed amount of profit. In the mentioned States, these mechanisms were set in stone. For instance, the State of Punjab showed light by procuring 127,00 tonnes of wheat by the Government in the months of April and May of 2020.[5] The counterargument provided by the lawmakers emphasizes the fact that a large proportion of farmers are unable to receive any profits from the MSP system in other parts of the nation. Yet, in the words of Pallagummi Sainath, Indian journalist and author ‘you don’t kill a man if he sick’. He draws the analogy of a sick man, comparing it to the current procurement system and implies that the Government must sought to improve the system if it fails to function well instead of dismantling it altogether. Additionally, there is evidence suggesting that ‘private’ traders are more likely to buy produce from bulk vendors rather than farmers, especially the smaller ones. This is how milk is bought in the country[6] Therefore, an end to this system may in some sense lead to a further exploitation of farmers, if there isn’t a body overseeing and regulating trade outside the APMC. Lastly, this amendment also makes it more complicated for farmers to receive protection. Prior to this, if farmers were being exploited by APMC traders they could directly reach out to APMC officers. However, since the aim of this legislation is to reduce reliance on this committee, they will have to go court with their complaints,[7] which is both a time-consuming and expensive route. Overall, although the intention behind this legislation may be to offer more ‘freedom’ to farmers, it has been framed in a way that surely instills a fear of exploitation by corporations from the farmers’ perspective.


Farmer Empowerment and Protection Agreement of Price Assurance and Farm Services Bill


A similar approach is reflected in the second Bill introduced by the Government which was drafted with the intention of protecting the farmers’ interests and attracting private investment. According to the Bill, if a particular business owner wants to buy products, they will be required to get into a legal agreement with the farmer, to prevent him from being cheated. For instance, in the absence of a legal agreement, the business owner may well fluctuate prices according to his will. This provides a disputes resolution between the farmer and buyer. Secondly, this bill facilitates what is known as 'contract farming’. The purpose of the agreement is to set out conditions for the production of products and for its delivery. Contract farming suggests that price is a previously established one, implying that there is a mutually agreed renumeration, the aim being to increase private investment. More often than not, the ‘buyer’ is a company or corporation. This form of farming will attract investment since companies aid with the supply of inputs providing production advice to its farmers. However, an apprehension towards this Bill arises for the reason that it will lead to farmers being left at the whim of private corporations as they will, as a result of the Bill acquire the power to create a legal agreement to their advantage. There are fair chances that a company may exploit a farmer through legal clauses.[8] It is known that post-liberalization, private players have had a much greater role to play in the economy. However, the Bill fails to regulate these players . Even though there is a fixed advanced price, there is a possibility for farmers to be co-opted, in order words being forced to work for big businesses in order to aggregate supply for them. According to Sudha Narayan, an Associate Professor at the Indra Gandhi Institute of Development Research, being co-opted is one of the consequences of dealing with big companies.[9] Corporations are highly likely to secure a place in the market once the Farm Bills are enacted, which will result in the farmers being co-opted. As mentioned above with the milk supply chain in India, especially with the creation of a legal framework companies may avoid working with farmers and prefer working with middlemen. Overall, with the introduction of this Bill there is a clear tradeoff between the attraction of private investment and farmers exploitation.


Essential commodities Bill


Lastly, amendments presented in the third Bill passed in the Parliament spark debate such as Section 2(A) of the Act positively defines essential commodities by listing nine such commodities whose production, supply and distribution are controlled by the Government. Under the new amendments, the Bill removes commodities such as edible oil, onion and potato from the list of essential commodities and only wishes to include this back into the bill in ‘emergency situations and circumstances.’[10] As a result of this, the Government will no longer regulate these commodities. The perspective of the Government and their intention behind the Bill is to attract more private investment by a reduction in Government intervention, which would in turn lead to a ‘higher income’ for farmers. The Minister of State for Consumer Affairs, Food and Public distribution Dadarao, points out how this will benefit both ‘farmers and consumers’.[11] On the other hand, it appears that the Government has made this decision rather hastily, since India is a principally rural country where farmers still do not have access to basic commodities and the ones that have been removed from government supervision are a common man’s daily essential commodities.[12] Experts have also pointed out that since the Government has opted out of taking charge of these commodities, this could lead to businesses to hoard these essential commodities leading to a rise in prices,[13] increasing the adversity of rural poverty. Protesters also highlight how the new law will only increase hoarding. Conclusively the worries of farmers stem for the valid reasons of being on the mercy of big businesses and being stripped of their essential needs.


Conclusion


Conclusively, The Farm Bills could lead to a paradoxical state of affairs, whereby those they were intended to protect are disadvantaged even further. The Bills aim to reduce farmers’ reliance on Governments, but in the process, it creates an environment that places an overreliance of farmers on Private corporations, leading to a possibility for their exploitation. On the assessment of the Essential Commodities Bill, it is clear that the Bill would effectively strip farmers of basic commodities. In a nutshell, although not entirely unsatisfactory, if left unregulated, the Farm Bills could increase the farmers’ distress leaving them exploited.


Disclaimer: The opinions expressed in this post are those of the authors, and do not reflect the views or opinions of the Durham Asian Law Journal.

[1] Dr Arindam Gupta ‘Why Punjab and Haryana Are The Hub of Farmer Protests’ (19 October, 2020) <https://www.outlookindia.com/website/story/opinion-why-punjab-and-haryana-are-the-hub-of-protests/362503> [2] Market place [3] Abhinav Sahay, ‘Here’s why farm protests have been loudest in Punjab, Haryana’ (September 25, 2020)<https://www.hindustantimes.com/india-news/here-s-why-farm-protests-have-been-loudest-in-punjab-haryana/story-G18qzwYWo7UuvrFmb06xuK.html> [4] Jyotika Sood, ‘Explained: Are New Farm Bills Anti-Farmer? All you need to know’ (21 September, 2020) <https://www.outlookindia.com/website/story/india-news-the-farm-bills-and-quandary/360640> [5] It’s Time for a 10- Year Plan that Says How Much Rice and Wheat Will Be Produced From Each State < https://thewire.in/agriculture/punjab-protests-rice-wheat-procurement-ten-year-plan-foood-security> [6] ibid [7] Harish Damodaran ‘Why Punjab and Haryana Are The Hub of Farmer Protests’ (Indian Express, September 21, 2020) <https://www.outlookindia.com/website/story/opinion-why-punjab-and-haryana-are-the-hub-of-protests/362503> [8] ‘Farm bill 2020 Explained/ Why are Farmers Protesting,’<https://www.youtube.com/watch?v=Mist4zw3e3I&t=227s> [9] Vikas Dhoot, ‘Will the farm bills benefit farmers’ (September 25, 2020) < https://www.thehindu.com/opinion/op-ed/will-the-farm-bills-benefit-farmers/article32690170.ece> [10] ‘Explained: Why Essential Commodities Act amendment a double-edged sword’ (September 23, 2020) <https://www.theweek.in/news/biz-tech/2020/09/23/explained-why-essential-commodities-act-amendment-a-double-edged-sword.html> [11] ‘Parliament passes amendments to commodities law’ (Economic Times, India, September 22, 2020)<https://economictimes.indiatimes.com/news/politics-and-nation/parliament-passes-amendments-to-essential-commodities-law/articleshow/78250922.cms> [12] ibid [13] ibid

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