Tag: APMCs

As Farm Laws Are Repealed, Is All Hope Lost for Agricultural Reform?

The Narendra Modi government will require a rethink and a more collaborative approach, even as the burden shifts to state governments to pick up the baton of reform.

When the Union government repealed the three farm laws, which were hastily enacted in September 2020, several commentators opined that the Narendra Modi government had committed a blunder and that the decision is likely to have an adverse impact on the process of reforms in all sectors including agriculture.

We disagree and believe that reforms in agriculture will continue. It, of course, needs a rethink and a more collaborative approach.

There are multiple avenues of reform that lay ahead – the path to which is laid out by the three farm themselves, their motivations and challenges.

To amend the Essential Commodities Act (ECA) 1955, the Union government brought the Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs (Amendment) Order, 2021.

The idea was that by removing the axe of stocking limits on traders and stockists, the government of India wanted to encourage private trade and investments. Historically, stocking-limits have been synonymous with consumer-bias in the system, and by removing the ad-hoc stocking limit orders, the Indian government wanted to correct the bias to balance with farmer interests who tend to lose when traders are not allowed to stock. However, as the country grappled with deficits in onions, pulses, and oilseeds, in 2020 and 2021, provisions of the ECA were liberally invoked to check the building price pressures. The trade undoubtedly was adversely impacted. But the moot question is, if the country continues to have deficits in production of critical commodities, how can the needs of farmers for remunerative prices align with demands of consumers for affordable food. Unless the private sector is provided independence and certainty of policy environment, investments in processing and storage may not materialise as needed.

But, if production in a year falls short of demand, then with storable-crops, building price pressures would hurt consumers. It is a thin-line walk for GOI. Therefore, in a situation of cyclical deficits in production of critical commodities, ECA amendments will have to be more dynamic and innovative. The ECA is well within the jurisdiction of the Union government and suitable amendments which make it predictable can be introduced after building a consensus with the states.

The most contentious of the three farm laws was the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act (FPTC), 2020. But its biggest contribution was the introduction of the concept of ‘trade area’, which was outside the physical boundaries of Agricultural Produce and Livestock Market Committees (APMCs). No licence was needed for the purchase of agricultural produce in the trade area and anyone could start the purchase of produce from farmers if he had a PAN card. The market fee and other charges within APMCs were not applicable to the trade area, presumably reducing the cost of transaction.

Pipariya mandi in Hoshangabad district. Representative image. Photo: Kashif Kakvi

The farmers’ agitation was extremely fearful of the long-term implications of this law as tax differential was considered a precursor to the entire agricultural trade moving out of APMCs into these trade areas. On the procurement side, there were apprehensions that the procurement by government agencies would also move out to trade areas as the Comptroller and Auditor General (CAG) would object to procurement from APMCs in which market fee and other charges were payable.

Now that the law has been repealed, there are a few lessons and suggestions for the future.

First, the introduction of the trade area concept led many states to reduce market fees and other charges in APMCs. Many states have sadly reverted to status-quo-ante in recent months. The good news is that there is a scope for reducing transaction costs in the APMCs. State governments can begin work on this.

Secondly, we must solve the puzzle of horticulture production. Horticultural produce has been exempted from regulation of APMCs and its trading outside APMCs is not regulated in many states. Such transactions do not even attract any marketing fee. However, this has not resulted in any substantial trade in horticulture moving out of APMCs. It is only in Maharashtra that private mandis have been set up. However, they also cater to specific commodities like cotton.

Thirdly, there is the problem of smaller-holder farmers and their access to APMC. A majority of farmers do not bring their produce to APMCs. The reasons vary from small landholdings, distance to APMCs and no real expectation of realising a better price. So, they prefer selling their produce in local haats or to the village traders. The situation assessment of agricultural households (77th round of the National Sample Survey, 2018-19) also confirms this. There is a need to strengthen the marketing infrastructure in the country and take markets closer to farmers.

Fourthly, there is an urgent need to not only reform APMC’s access but also strengthen its infrastructure and appraise its management: In its true spirit, the Indian government wanted to create more selling options for the farmers. Strengthening APMC, while simultaneously encouraging private trade, will be a good move.

But how should this be done? The following steps can achieve this objective.

1) In APMCs, state governments should issue more trading licences so that there is more competition. Preference can be given to those who also own agricultural land. Nafed, state marketing federations and other state-level cooperatives and farmer producer organisations (FPOs) dealing with agricultural marketing should be given unified licenses valid in all the APMCs in a state. A reduction in market fee and more transparency in operations is needed in the APMCs. The Union government can persuade BJP-ruled states to have a uniform rate of market fees and other charges (not more than 2%). These states can also fix a uniform rate of commission for arhtiyas (middlemen) and societies.

2) Declare all warehouses and cold storages as market yards so that the farmers can bring their produce directly to the warehouses. E-National Agriculture Market (e-NAM) already provides a framework for trading across AMPCs and even state boundaries. In 2007, the Union government enacted the Warehousing (Development and Regulation) Act but it continues to be optional for warehouses to get registered with the Warehousing Development and Regulatory Authority. As a result, only 2200 warehouses are registered. They can issue electronic negotiable warehousing receipts which are negotiable and transferable. The RBI has recently directed that loans against e-NWRs up to Rs 75 lakh will be classified under Priority Sector Lending (PSL). But the banks treat registered and unregistered warehouses at par and there is no concession in the rate of interest on loans against e-NWRs. For promoting the formalisation of agricultural trade and attracting investment in warehousing, some concession in the rate of interest on bank loans for agricultural commodities stored in registered warehouses needs to be given.

The Union Government can easily persuade the states ruled by the BJP or its allies to implement these marketing reforms.

In addition, there are some important reforms outside the ambit of the three laws that the Union government should consider. A consensus on a central law for seamless trading of agricultural produce can be achieved. To facilitate seamless movement of agricultural produce between state boundaries, the Union government should enact a law. For this, consultations with state governments should begin without waiting for the recommendation of an expert committee.

The farmers’ agitation has attracted the country’s attention to the economic distress of farmers. Challenges of climate change are more perceptible now than ever and damage caused to natural resources like soil, and air require urgent attention of the government.

Agriculture is primarily a state subject and state governments should now rethink, redesign and implement reforms suited to their conditions.

It was the reluctance and delay in implementing the marketing reforms, discussed since 2003, that perceptibly persuaded the Union Government to legislate on marketing and contract farming. It is now up to the state governments to take forward the baton on reforms so that Indian agriculture can provide food and nutrition security to its vast population.

Siraj Hussain and Shweta Saini are visiting senior fellows at the Indian Council for International Economic Relations (ICRIER). Hussain has served as secretary, Ministry of Agriculture, government of India.

What Not to Expect for Agriculture in Budget 2021

Much of the churn in the agricultural sector has happened outside the confines of the Union Budget over the last few years.

While the farmers’ agitation has focused the attention of the country on the travails of the agriculture sector, the Union budget on February 1 next week may not reveal the direction of reform trajectory India will follow over the next decade.

During the last two years, a number of important economic decisions were not announced in the budgets presented to parliament. Thus, the decision to reduce the corporate tax rate from 30% to 22% was announced on September 20, 2019.

In May 2020, at the height of anxiety about the impact of COVID-19 on the Indian economy, the finance minister held five press conferences and gave details of five packages, initially announced by the Prime Minister under PM Narendra Modi’s Atmanirbhar Bharat Abhiyaan. It was claimed that the packages will amount to Rs 20 lakh crore.

She also made several announcements in the agriculture package, including amendment of the Essential Commodities Act (ECA), 1955, and enactment of laws by the Centre to streamline agriculture marketing.

Rest, as they say, is history.

Three major changes to existing governance of the agricultural economy have been under discussion for years. These are: reforms to fertiliser subsidy, electricity subsidy and management of water resources

Fertiliser subsidy

On November 12, 2020, the government suddenly announced that it will provide an additional Rs 65,000 crore for fertiliser subsidy. This was in addition to Rs 71,309 crore already budgeted for 2020-21. Fertiliser companies had arrears of fertiliser subsidy of about Rs 48,000 crore on April 1, 2020. For several years, the fertiliser companies were not even paid the entire amount of subsidy incurred by them during the year. 

Also read: Budget 2021 Is a Chance to Undo the COVID-Induced Inequality That Has Surged Across India

While the provision of additional grant to clear the arrears of fertiliser subsidy was perhaps unexceptionable as a good budgetary practice; quite possibly the industry itself would have least expected it in a year when the GDP is projected to shrink by at least 7%. The Union budget for 2020-21 projected collection of Rs 26.33 lakh crore from direct and indirect taxes. Due to the devastation of the economy on account of COVID-19, the actual collection may be only about Rs 19.33 lakh crore, a good 26.6% lower than the budget estimates. It is clear that the fertiliser industry has been very lucky.

It was generally thought that payment of arrears of fertiliser subsidy is a precursor to major reform in the administration of fertiliser subsidy. However, as a fallout of the farmers’ agitation against the farm laws, it seems unlikely that the government will go for direct benefit transfer of fertiliser subsidy. In the absence of any record of tenancy, DBT can only reach the land holder and not the actual cultivator.

A farmer arranges harvested tomatoes in a tractor trolley on the outskirts of Ahmedabad, India, February 7, 2018. Photo: Reuters/Amit Dave

Secondly, the present consumption of fertilisers and therefore the subsidy availed varies widely across states. In Punjab and Haryana, the consumption of N, P and K in 2018-19 was 224.5 kg per hectare while it was only 70.6 kg per hectare in Odisha and 61.9 kg per hectare in (undivided) Jammu and Kashmir. Also, consumption of fertilisers depends on the crops grown and the area cultivated – whether it is irrigated or un-irrigated So, fixing a uniform amount of fertiliser subsidy for farmers in all the states and UTs of India is not going to be easy. 

The opposition to hastily enacted farm laws would have already persuaded the government to make much more effort to have wider consultation with stakeholders.

FCI arrears

The second major item of subsidy which is unlikely to be fully paid by the government even in 2021-22 is food subsidy. Dr Shankar Acharya wrote in Business Standard that “fudging budget numbers has become a serious problem in recent years”. 

For several years, the government has not been paying even the food subsidy incurred by FCI in a year. As a result, arrears of subsidy have been mounting up. The arrears of FCI went up from Rs 1,35,514.52 crore on March 31, 2018 to Rs 2,42,905 crore on March 31, 2020. Due to additional allocation of wheat and rice under Pradhan Mantri Garib Kalyan Yojana, an additional quantity of 315.2 lakh tonne has been issued this year. As a result, it is estimated that on March 31, 2021, the arrears of FCI alone will reach Rs 3,48,808 crore. 

Also read: Demand for MSP Guarantee Ignores Agricultural Labourers and Widening Class Divide

The arrears of food subsidy in decentralised procurement states (DCP) are not even known.

PM Kisan and APMCs

The largest allocation in the budget of the Ministry of Agriculture (Rs 75,000 crore in 2020-21) is for PM-Kisan. It is unlikely that the government will reduce this allocation.

A surprising announcement in the budget could be a new scheme for improving the infrastructure of APMC mandis, including modern facilities for drying, sorting, grading and storage. The focus of the farmers’ agitation has been a fear that business will move out of APMCs to trade areas. A handsome budgetary allocation for APMCs can show that the government is not for deterioration of the AMPCs and it would rather like them to continue and give good competition to trade areas. Now that the fees and other charges in AMPCs have been substantially reduced in most states, they can continue to be the first choice for primary marketing of agricultural produce. 

Poultry and fisheries sectors have seen growth rates exceeding 8% annum, mostly without much incentive from the government. Setting up of modern marketing facilities for these in all metropolitan cities of India is need of the hour.

And lastly, our wish list includes a clear and unequivocal message to reduce the area under paddy and sugarcane in water-stressed districts of India. A financial incentive, shared by the Centre and the states can lay down a road map for such diversification. 

Siraj Hussain was Union Agriculture Secretary. At present, he is a Visiting Senior Fellow, ICRIER.  Jugal Mohapatra retired as Union Fertiliser Secretary.

Farm Laws: Key Talking Points of the Centre’s Proposed Dilutions

The Centre has promised to give a written assurance to farmers on the MSP regime, however farmer union leaders have questioned the current status of this system where some farmers get paid even below the MSP.

New Delhi: After several weeks of protests against the hastily passed agriculture laws, the Centre on Wednesday came up with a set of draft proposals, diluting some provisions of the laws. However, some farmer union leaders have expressed utter disappointment with the proposed amendments and decided to continue their agitation over the coming days.

Although the Centre has promised to give a written assurance to farmers on the minimum support price (MSP) regime, farmer union leaders have questioned the current status of this system where some farmers get paid even below the MSP.

The Centre’s farm laws had instilled fear among the farmers that the Agricultural Produce Market Committee mandis would be weakened and they will be stuck in a vicious circle of selling crops to private sellers or big corporate players. The Centre said the laws will ensure that new buyers enter the market and promote competition, which will help the farmers earn more money. Farmer unions did not agree with this narrative.

The Centre’s new proposal said that state governments can impose taxes/fees in private trade areas to maintain parity with regulated APMC mandis.

Also read: ‘Will Block All Delhi Roads One by One’: Farmer Leaders Reject Centre’s Proposal

Apart from this, the Centre addressed various other issues including registration of merchants – where anyone with a PAN card can buy crops from farmers. The government proposed that state governments will be authorised to frame rules to register private traders – as per local conditions – in the favour of farmers.

On the issue of farmers not getting the right to appeal in civil courts for dispute resolution, the government said it is open to making an amendment to provide for an appeal in civil courts. Currently, the dispute resolution is at SDM level.

On fears that big corporates will take over farmlands, the government said it has already been made clear in the laws, but still, for clarity’s sake, it can be written that no buyer can take loans against farmland nor any such condition will be made to farmers.

On attaching farmland under contract farming, the government said the existing provision is clear but still it can be clarified further if required.

Also read: Full Text: The Government’s Proposals to Protesting Farmers

On fear about the scrapping of the MSP regime and shifting of trade to private players, the government said it is ready to give a written assurance that the existing MSP will continue.

On demands to scrap the proposed Electricity Amendment bill 2020, the government said there won’t be any change in the existing system of electricity bill payment for farmers.

On farmers’ demand to scrap the Air Quality Management of NCR Ordinance 2020, under which there is the provision of penalty for stubble burning, the government said it is ready to find an appropriate solution.

After the passage of the farm laws, farmer unions and experts had reported their concerns that small and marginal farmers – a section that constitutes 85% of agrarian landholdings – are likely to be worst hit and that they will have the lowest bargaining power and the highest level of uncertainty.

Responding to the proposals, Kavita Kuruganthi of the All India Kisan Sangarsh Coordination Committee (AIKSCC) issued a statement saying that the proposed amendments are an “insult” to farmers. “Farmers strongly reject the proposals from the government. They call it an insult to the farmers of the country.”

(With PTI inputs)

Full Text: The Government’s Proposals to Protesting Farmers

The farmers have rejected the proposal and said that while they are eager to consider future proposals, this one is an “insult” to them.

On Wednesday, the Centre sent agitating farmers a proposal to consider in place of the latter’s demand for a repeal of the three farm laws. The farmers have rejected the proposal and said that while they are eager to consider future proposals, this one is an “insult” to them and their protest. 

The 20-page proposal contains a summary of the government’s version of the farm laws until page 8, after which the proposed “amendments” are written. Below is the full text of these proposed amendments, from page 8 to 20.

The following has been translated from the original Hindi by Naushin Rehman.

§

Issue: Regarding constitutional validity of agricultural reform laws

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 as well as the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 have been passed by the Parliament of India under Entry 33 of List III (Concurrent List) under Schedule 7 of the Constitution.

As per the above Entry 33, the Parliament may pass an Act with respect to trade and commerce, production and distribution of food items. Under Entry 26 of the state list, subject to the provisions of Entry 33 of the Concurrent List, the state assembly has the power to pass an Act regarding trade and commerce within the state. Therefore, it is clear that both the Acts are constitutional.

Proper legal advice has been obtained by the government at the time of introducing this Act and prior Ordinances.

Issue: To repeal the agricultural reform laws

Proposal

The government is ready to consider with open mind the provisions of the Acts to which the farmers have an objection.

Issue: It is feared that the mandis set up by the mandi committees will be weakened and the farmers will be in the clutches of private mandis.

The new provisions provide more options to sell the crop, keeping the previous options open. Farmers will now be able to sell crops outside the mandis, such as from store houses, cold storages, factory premises or even from their fields.

There will be more competition in crop procurement from the farmer as new traders will become direct buyers of the crop and so the farmers will get higher prices.

All the restrictions of intra-state and inter-state trade will be removed.

In addition to the new provisions, the option before farmers of selling the crop in mandis and government procurement agencies at MSP will remain unchanged.

Also read: Will Block All Delhi Roads One by One’: Farmer Leaders Reject Centre’s Proposal

Proposal 

By amending the Act, it may be provided for the state government to implement a system of registration for private mandis. In addition, from such mandis, the state government can determine the cess/fee up to the rate of cess/fee applicable in APMC mandis.

Issue: Instead of making an arrangement for the registration of the buyer, a system has been put in place for purchasing the crop from the farmer only on the basis of PAN card, due to which there is a possibility of cheating.

With a view to provide more options of marketing to the farmers in the new Acts, there is a system of carrying out business with the buyer on the basis of PAN card.

As per the law, the Central government reserves the power to formulate rules regarding the registration of traders, the method of trade and the mode of payment.

There is already a provision to implement registration system on the basis of documents other than PAN Card.

Farmers listen to a speaker during a protest against the newly passed farm bills at Singhu border near New Delhi, India, December 9, 2020. Photo: Reuters/Adnan Abidi

Proposal

To address the doubts raised in this regard, the state governments may be empowered to formulate rules for such registration so that the state governments can make laws in the interest of the farmers according to local conditions.

Issue: The farmer does not have the option of approaching the civil court for dispute resolution. Therefore, there is a possibility of not getting justice.

A provision has been made to enable farmers to get justice quickly, easily and at a low cost and to resolve the dispute within 30 days at the local level. 

The first arrangement in both the Acts is to resolve disputes on the basis of mutual agreement through a Board of Conciliation.

Proposal

To address the doubt in this regard, in addition to the provision in the new laws for resolving disputes, the option of going to the civil court may also be provided. 

Issue: There is no system for the registration of agricultural contracts.

Under the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, there is already a provision to make arrangements for registration of contracts by the state government.

State government also has the right to establish a registration authority.

Proposal

Until the state governments set up a system of registration, suitable arrangements will be put in place to make the copy of all written agreements available at the concerned SDM office within 30 days of signing the agreement. 

farmer leaders address media after a meeting regarding the Centres farm reform laws, near Singhu border in New Delhi, Wednesday, Dec. 9, 2020. Photo: PTI

Issue: Big industrialists will take over farmers’ land and the farmers will be deprived of their land.

Under the Farmers Agreement Act, there can be no agreement on sale, lease or mortgage of the land or premises of the farmer.

There is a provision that no structure can be constructed on the land of the farmer, and if constructed, it will be removed by the Sponsor on the expiry of the agreement period. 

If the structure is not removed, then it will be the property of the farmer.

Proposal

Though the provision is already clear, it will be made further clear that no loan can be availed by the sponsor against the structure constructed on the land of the farmer nor can such a structure be accepted as a surety.

Issue: The land of the farmer will be attached.

Under Section 15 of the Farming Agreement Act, there is a clear provision that no action for recovery of any amount shall be initiated against the agricultural land of the farmer.

Under this Act, no penalty can be imposed on the farmer, whereas a penalty to the extent of 150% of the outstanding amount may be imposed on the Sponsor.

While the Sponsor is bound to purchase the crop at full price as per the agreement, there is no restriction for the farmer.

Proposal

The provision is clear yet if any clarification is required, it will be issued.

Issue: The farmers will no longer have the option to sell their produce through government agencies at support prices, and all agricultural produce will be traded in private hands.

The new Acts have not interfered with the support price system and government procurement.

State governments have the right to set up support price centres and are free to set up such centres in mandis.

The system of procurement on MSP has been strengthened by the central government. This year’s bumper procurement of rabi and kharif crops is an example.

Proposal

The Central government will give written assurance regarding the current procurement system of MSP.

Issue: To repeal the Electricity (Amendment) Bill, 2020

The Electricity Amendment Bill has currently been tabled for discussion.

Regarding DBT, it has been proposed that the state government will deposit the subsidy payment in advance directly into the consumer’s account.

Madhya Pradesh-based farmer leader Shiv Kumar Kakkaji, Bharatiya Kisan Union (BKU) spokesperson Rakesh Tikiat, and other farmer leaders address media after a meeting regarding the Centres farm reform laws, near Singhu border in New Delhi, Wednesday, Dec. 9, 2020. Photo: PTI

Proposal

There will be no change in the present system of farmers’ electricity bill payment.

Issue: To repeal Air Quality Management of NCR Ordinance, 2020

Under the present provision, fines and criminal proceedings can be imposed on stubble burning.

Proposal

The objections of the farmers will be addressed appropriately regarding the provision for stubble burning under the Air Quality Management of NCR Ordinance, 2020.

Honouring the farmers of the country and with an open mind, the Central Government has tried to resolve all issues with full compassion. Therefore, all the farmer unions are requested to end their protest.

‘Will Block All Delhi Roads One by One’: Farmer Leaders Reject Centre’s Proposal 

‘The Modi government is insincere and arrogant about resolving farmers’ demands,’ the AIKSCC said in reply to the proposals drawn up by the government.

New Delhi: Farmers groups protesting the three new farm laws have rejected the Centre’s latest proposal, calling it an insult and vowing to escalate their struggle, now in its fourteenth day.

The government’s negotiations with leaders of the farmers’ unions reached a critical point on Tuesday – the very day farmers had called for a nationwide strike in protest. Union home minister Amit Shah had called a few of the many farmers’ union leaders for a meeting with him and other representatives of the Centre. The meeting went on till late at night and was learned to have been inconclusive.

However, Shah had reportedly promised to send farmers a proposal in writing.

This draft proposal was sent to 13 farmers’ union leaders – including Joginder Singh Urgrahan of Bharatiya Kisan Union (Ekta Ugrahan), one of the biggest among the nearly 40 agitating unions – by Vivek Aggarwal, joint secretary at the Union agriculture ministry.

The main point of the proposal given to the farmers was that the minimum support price (MSP) for procurement will not end with the recently enacted laws. Other amendments include the possibility of registration and taxation of traders operating outside APMC mandis, and allowing farmers the opportunity to appeal disputes in civil courts.

Farmers listen to a speaker during a protest against the newly passed farm bills at Singhu border near New Delhi, India, December 9, 2020. Photo: Reuters/Adnan Abidi

Firm on rejection

Farm union leaders, however, are firm on their demand that the three agriculture laws must be repealed. Dr Darshan Pal, president of Krantikari Kisan Union, said, “We reject the government’s proposals.”

Farmers have said that they will continue demonstrations on all four borders points, at Singhu, Chilla, Ghazipur and Tikri and will continue to occupy more roads in the capital city as a mark of their protest. 

A statement issued by Bharatiya Kisan Union (Ekta-Ugrahan) notes that there is “nothing new in the amendments.” What was communicated to the agitating unions in the last meeting has been sent to them in written form, the statement notes.

Speaking to The Wire, Tejinder Singh Virk of the Terai Kisan Union of Uttarakhand said that he is unhappy with the Centre’s proposed amendments, especially when it comes to MSP. “The amendments say that the current system of MSP purchase will remain as is and the government will provide a written guarantee to farmers. But in the current system, hardly any state other than of Punjab and Haryana get MSP for their crops,” said Virk.

“What about in Uttar Pradesh where farmers get paid below the MSP,” Virk added.

According to him, MSP must be made a legal right. The Terai Kisan Union, along with Rakesh Tikait’s BKU have been camping at the Ghazipur border since the last week.

farmer leaders address media after a meeting regarding the Centres farm reform laws, near Singhu border in New Delhi, Wednesday, Dec. 9, 2020. Photo: PTI

‘Gherao’, ‘boycott’, ‘protest’

The All India Kisan Sangarsh Coordination Committee, a pan-Indian umbrella organisation comprising 250 farmers’ units has issued a statement supporting the rejection of the government’s proposal by farmers. The statement read, “Modi government is insincere and arrogant about resolving farmers’ demands. All farmer bodies have rightly rejected the old proposal dressed up as new.”

In a press conference on Wednesday afternoon, farmers’ union leaders said that they will continue with their protest and will block all “Delhi roads one by one” if the three laws are not scrapped.

On December 14, there is a call to all north Indian farmers to come to Delhi. On the same day, farmers in south India and other states will protest at district headquarters and sit in indefinite protests.

Farmer leader Shiv Kumar Kakka said, “We will gherao district headquarters in states on December 14, and the Jaipur-Delhi highway will be blocked till December 12.” No tax will be be paid on that day at any toll plaza in country, he added.

The farmers have also given a call for gheraoing offices of the BJP on December 14. On the day, they will also be boycotting Jio services and boycotting of malls and products owned and marketed by Adani and Ambani, who they consider symbols of big corporations to which the Centre is pandering.

However, farmer leaders have also said that they will consider another proposal if it is sent by the government.

Also watch: Why Hasn’t PM Modi Spoken With India’s Farmers Yet?

Meeting with the president

Meanwhile, five opposition leaders including Rahul Gandhi, Sharad Pawar met President Ram Nath Kovind seeking the repeal of farm laws. “We have given a memorandum to the President. We are asking to repeal agriculture laws and electricity amendment bill that were passed in anti-democratic manner without proper discussions and consultations,” CPI(M) general secretary Sitaram Yechury said.

Congress leader Rahul Gandhi said, “We met the President and have said that its important that the farm laws be taken back.”


The three laws – The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020, and The Essential Commodities (Amendment) Act, 2020 were passed by the Centre in the last monsoon session of parliament. 

With an Eye on Punjab Polls, Kejriwal and Amarinder Singh Spar Over Farm Laws

The Congress has attacked AAP for notifying one of the three contentious farm laws and “trying to fool farmers’ unions”.

New Delhi: The Arvind Kejriwal-led Aam Aadmi Party (AAP) government in Delhi, which had last month notified one of the three controversial farm laws enacted by the Centre, has since extended wholehearted support to the farmers’ agitation in Delhi.

Along with other opposition parties, it also supported the Bharat Bandh called in support of the farmers’ demands on December 8. But while the party had also opposed the legislation in parliament, it has been criticised by its opponents for adopting an apparent ‘double standard’.

On November 23, the Delhi government notified the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020. At the time, it said, “the remaining two laws are under examination by the development department of the Delhi government”.

The party’s move, which came at a time when farmers were already protesting in Punjab and Haryana against the three laws, drew criticism from Punjab chief minister and Congress leader Amarinder Singh.

He said the notification, which came when the farmers had embarked on the ‘Delhi Chalo’ march, would sound the death-knell for the ‘annadattas’ (providers of grain).

Accusing the AAP leadership of trying to “fool” farmers’ unions by appearing to stand in solidarity with them, Singh had asked: “Do they have no shame?”

Saying that AAP’s “true intent and affiliation have been utterly exposed, the senior Congress leader further added, “first they failed to pass any amendment laws in the Delhi Assembly to negate the central laws, as was done in Punjab. And now they have gone so far as to officially notify the agricultural legislation in Delhi, where AAP is in power.”

‘Delhi notified Centre’s law due to petty political interests’

Irked by AAP’s suggestion that the Punjab government should have passed a Bill in the state assembly to make MSP a statutory right for farmers in the state, Singh countered it by saying, “It is obvious that AAP either does not understand the problems of farmers or simply does not care. Even if the state has the money to buy all the foodgrain, which it simply does not, where would it sell the same?”

He asserted that the issue of MSP was larger, which was why farmers from all over the country had joined the agitation. He also questioned why AAP leaders couldn’t see that farmers from all agricultural states were marching to Delhi to fight against the farm laws or could not go beyond their own “petty political interests”.

Also read: Arvind Kejriwal, Amarinder Singh in Twitter Spat Over Punjab Farm Bills

‘Had no choice’

Kejriwal had then defended his government’s move to notify the farm law by saying the state government had no choice but to implement it. “Punjab CM has made allegations against me that I’ve passed the black laws in Delhi. How can he do such low-level politics in this fragile situation? It’s not up to the state government to implement it. Had it been so, why would farmers of the country hold talks with the Centre?”

It was also pointed out that the notification would allow farmers to sell their crop anywhere, including outside mandis, and would fetch them better rates. Given that the sale of fruits and vegetables had already been de-regulated several years ago, the AAP government said the notification would similarly allow the sale of grains and poultry to take place anywhere.

Farmers' protest

Amritsar: Farmers raise slogans during a protest in support of the nationwide strike, called by farmer unions to press for repeal of the Centres Agri laws, in Amritsar, Tuesday, Dec. 8, 2020. Photo: PTI

Kejriwal accuses Singh of succumbing to Centre’s pressure

The Delhi chief minister also accused Singh of cozying up to the ruling BJP at the Centre. “So, is it the pressure of these people that you are putting allegations against me? Are you doing it for friendship with BJP or are you under pressure as the Enforcement Directorate has filed a case against your family?” he asked.

Thereafter, the two chief ministers again engaged in a confrontation after Singh met the Union home minister Amit Shah on December 3 in connection with the farmers’ agitation. During the meeting, he said, he urged the Union home minister to find an early solution to the impasse.

“I came to meet the home minister to reiterate our position and to make a request to him and the farmers to resolve this soon because this affects the economy of my Punjab as well as the security of the nation,” the Congress leader told reporters after the meeting.

AAP terms Shah-Singh meeting a ‘conspiracy’

However, AAP, through its spokesperson and MLA Saurabh Bharadwaj, did not miss the opportunity to attack Singh and said that Singh’s meeting was a “conspiracy”. The spokesperson said “It is very surprising that after leaving the meeting with Shah, to whom the ED reports, Captain Singh did not say anything about rolling back the laws.” It insinuated that Singh was under pressure from ED owing to the notices it had sent to his son.

Also read: Congress, Aam Aadmi Party Workers Vie With Each Other to Help Protesting Farmers

The Aam Aadmi Party tweeted, along with an image of Amarinder Singh, that he was a leader who had stooped before the government.

However, the back and forth between Singh and Kejriwal, or their parties, is hardly new. Prior to the farmers’ agitation, the two had also been involved in a similar confrontation over the handling of the outbreak of COVID-19 in Punjab.

With the Punjab assembly elections less than a year and a half away, both the parties do not want to miss any opportunity to portray the other as betraying the masses.

AAP-Congress fight for ‘secular’ votes in Delhi, Punjab

While both parties remain opposed to the BJP in Delhi as well as in Punjab, the real fight between the Congress and AAP is for the “secular” vote. In Delhi, it was AAP and not the BJP which finally managed to form a government in 2013 after the Congress had ruled the state for 15 straight years.

It is only ironical then that the first AAP government in Delhi was formed with the help of support from the Congress, as the party wanted to keep the BJP out of power. However, the move did little to help the Congress’s cause, as AAP later returned to power in 2015 with an overwhelming majority of 67 seats in the 70 member assembly while the Congress’s tally dropped to zero.

Likewise, in Punjab, where AAP won four Lok Sabha seats in the 2014 general elections, the party managed to make deep electoral inroads in the 2017 assembly elections. Though it ended up securing the second rank with 20 seats, behind the Congress which bagged 77 seats in the 117-member house, it was evident that by securing nearly a quarter of all the votes polled, AAP had become a force to reckon with in the times to come.

Also read: Only Six Delhi Farmers Have Benefited From AAP’s Much-Touted Plan to Increase MSP

With the next assembly polls in the state due in early 2022, both Singh and Kejriwal want to present their case again to the voters of Punjab in the best possible way.

Singh emerged as a pro-farmer face

Kejriwal also realises that Singh has, with his proactive approach on reaching out to farmers, emerged as a patron for the farmers’ protests. Punjab was the first state to bring its own laws to reject the Centre’s movement and thwart its implementation in the state.

For this Singh had called a special session of the Punjab assembly on October 20 and passed amendment Bills thereby removing Punjab from the ambit of the central laws.

Captain Amarinder Singh along with other Punjab state legislators staged a protest against the central government in Jantar Mantar. Photo: Twitter/@capt_amarinder

The state government had stated that the amendment Bills would “restore the agricultural safeguards for the farmers through the regulatory framework of Punjab Agricultural Produce Markets Act, 1961 to secure and protect the interests and livelihoods of farmers and farm labourers as also all others engaged in agriculture and related activities.”

His stand on the laws had endeared Singh to the protesting farmers of Punjab and also forced the Shiromani Akali Dal (Badal) to break its long alliance with the BJP in the Centre and the state. Thereafter, Congress also supported the ‘Delhi Chalo’ march of the farmers.

Kejriwal, AAP making all attempts to be seen with the farmers

As such, it became necessary for Kejriwal and his party to be also seen as supporting farmers, especially those in Punjab. While AAP’s Rajya Sabha MP Sanjay Singh had set the tone for the party by opposing the Bills in parliament, Kejriwal also came out in support of the farmers.

Also read: At Farmers’ Protest, Field Reporters of ‘Godi Media’ Channels Face the Heat

On December 7, he visited the Singhu border protest site of the farmers along with his ministers and MLAs and declared that he supported “all demands of farmers.” He had earlier also urged his party workers to wholeheartedly support the protests.

Kejriwal also spoke about how he refused to convert nine stadiums into prisons for detaining the protesting farmers. “My party and I have stood with them (the farmers) from the very beginning,” he said, as he became the first chief minister of a state to visit the protest site.

The eagerness of the party leaders to be seen with the farmers, when they are protesting, also became clear when they accused the BJP of deploying police to physically bar Kejriwal from leaving his residence during ‘Bharat bandh’ on December 9 – a charge denied both by the police and the saffron party.

Farm Laws: Public Perception Is in Favour of Farmers, Centre Cannot Be in Denial

The farmers’ movement has reached a stage where it no longer deals with the sectional interests of farmers alone but has deeply affected all sections of Indian society.

As the latest round of talks between home minister Amit Shah and farmer representatives once again ends in a deadlock, hope still exists that progress can be made towards an agreement.

However, unless the government changes its current position – being willing only to make marginal amendments to the existing farm marketing laws on minimum support price and compulsory public procurement – the fundamental difference between the government’s position and that of the farmers’ representatives will continue.

As a way of moving towards resolving this deadlock, it is important to recognise that there has been progress in many areas since June 5, 2020, when the three farm laws were brought in as ordinances. It has been a huge learning process for the government, the farmers’ organisations and wider Indian society.

Outside India, many actors are now much better informed about the political economy of these reforms than they were in June, including academics studying the Indian economy, especially its agriculture sector. The Indian diaspora, the governments of many countries that have wide-ranging economic and other ties with India (especially countries with substantial numbers of citizens of Indian descent), environmentalists and parliamentarians from these countries, and, most significantly, the UNO are now better informed.

Also read: Farmers’ Protests: Talks With Amit Shah Inconclusive; No Meeting on December 9

The Central government’s recognition that these farming laws contain errors that need to be corrected is a notable development. In matters of this importance, such an acknowledgement must be viewed positively – not as an end in itself, but as a movement in a positive direction. The farmers’ organisations have also gone through a massive learning experience during these months through discussions with the government, and through engagement with media and with public intellectuals knowledgeable on agrarian issues.

Farmer leaders after a meeting with Union minister for farmers’ welfare Narendra Singh Tomar on the new farm laws, outside Vigyan Bhawan in New Delhi, December 3, 2020. Photo: PTI/Arun Sharma

One example of the educational opportunities afforded by this debate deserves special attention. The Kisan Majdoor Sangharsh Committee, one of the Punjab organisations that campaigns on issues affecting both farmers and farm workers in Amritsar district and surrounding areas, translated the three farm laws into Punjabi and distributed one lakh copies among farmers and workers.

In my opinion, this is one of the most admirable large-scale educational interventions in an issue of public interest. Other farmers’ organisations have similarly produced booklets containing critical evaluations of these farming laws (including some by this writer) and have done mass distribution of such critical reviews. Such self-educative experiences have encouraged the farmers’ organisations to move from their initial position, where they asked only for the provision of a minimum support price (MSP) and public procurement through APMC mandis to an understanding that such piecemeal changes cannot be effective without changing the whole structure of the three farm laws.

I cannot remember any other law in post-independent India that has received as much attention in terms of mass reading and discussion as these three laws have achieved, and hence as much attention from civil society.

Also read: Why Indian Farmers Find it Hard to Trust the Government’s Promises

It would be fair to say that a widely-shared consensus has emerged in India and among the Indian diaspora that the government is defending the interests of agri-business corporations through these laws. It would be good if the Central government were to recognise this widely-shared social consensus, even if this recognition remains confined within the inner circles of the government.

The government’s effort to portray these laws as empowering the farmers has failed, not because of any fault of the public relations campaigns of the government, but because of the content of the laws. There are limits to how far public relations efforts can go in altering people’s perceptions. The spread of mass literacy in India and the development of multiple forms of mass media have certainly enabled a large majority of the Indian population to differentiate between truth on the one hand and falsehood presented as truth on the other. This deserves to be celebrated as a strengthening of democracy in Indian institutions and practices.

Effective and truthful communications between the government and the farmers’ representatives are central to the comprehension of the merits of the farmers’ plea that all three farm laws – along with the recent enactments on electricity and environment – should be repealed.

MSP can’t be detached

The farmers’ argument that the mere provision of MSP and APMC public procurement is not acceptable any more is based on a slowly emerging iterative and mature understanding that these two issues cannot be detached from other key features of the farm laws.

Let us look at the contradiction between inserting the MSP provision in The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 and retaining the existing provision of ‘remunerative price’ to be agreed by a farmer in a contract with ‘agri-business firms, processors, wholesalers, exporters and large retailers’.

Also read: ‘Don’t Neglect Jawan-Kisan Link’: Armed Forces Veterans Urge Govt to Repeal Farm Laws

If an agri-business firm, processor, wholesaler, exporter, or large retailer were to agree a ‘remunerative price’ with a farmer, the agreement  would not allow a farmer to sell his/her crop under MSP provision in the APMC marketing yard. An agri-business entity would be legally entitled to take a non-compliant farmer to litigation.

market yardFile photo of a market yard Photo: MAHAPFC.

According to the agriculture census of 2015-16, the overwhelming majority of farmers in India, 86%, are marginal (with holdings below one hectare) and small (with holdings between one and two hectares). The remaining 14 % are described as ‘semi medium’ (2-4 hectares), ‘medium’ (4-10 hectares), and ‘large holdings’ (over 10 hectares). Though the situation appears slightly better than the all-India average in Punjab, where 33.1% of land holdings are small and marginal and 33.6% are semi-medium, and in Haryana, where 68.5% of holdings are small and medium, overall, the farmers are marginal and have low bargaining power.

Leaving aside the marginal and small landholders, even the so-called medium and large landholders would not be in any position to challenge the legal resources of ‘large retailers’ and agro-business entities. Therefore, keeping the provision for the so-called remunerative price negates the purpose of having the MSP in the APMC mandi yard.

Also read: Did You Think the New Laws Were Only About the Farmers?

A similar contradiction emerges regarding the ‘dispute resolution’ provision in ‘The Farming Produce Trade and Commerce (Promotion and Facilitation) Act, 2020’. The threat of a penalty of anywhere between Rs 25,000 and Rs 10 lakh if a contract is contravened, and a further penalty of anywhere between Rs 5,000 and Rs 10,000 per day if the contravention continues, make the provision of the MSP in APMC mandi redundant.

The farmers’ representatives have by now understood the interwoven nature of these three laws and the fact that the MSP and public procurement alone cannot untangle them. The government is still floundering on these matters. Intellectually and ethically, the farmers’ organisations have achieved the victory, and the public clearly views the government as persisting without recourse to logic or ethics.

Governments consist of individuals who take decisions, and such individuals can take wrong decisions that deserve to be repealed. There are examples in contemporary history where the governments have rolled back laws they had previously passed. One of the most well-known rollbacks is the decision taken by Margaret Thatcher’s government in the UK in 1990 to repeal the poll tax. This was a tax to be imposed on anyone in the electoral roll. It faced large-scale public protest including mass riots and came to be branded as a tax on existence on the grounds that someone could be homeless but still liable to pay the tax since their name was on the electoral roll.

Also read: Online Petitions Supporting Farmers Garner Lakhs of Signatures From Around the World

In the interests of Indian democracy, the Central government should either issue an ordinance repealing the five laws (the three farm laws and the two relating to electricity use and environmental pollution) and call parliament later to approve the ordinance, or alternatively call parliament back straight away to repeal the laws. The government can retain the option to introduce laws later after a due consultation process with all stakeholders, proper discussion in both Houses of the Parliament and in the parliament’s Select Committee.

The alternative scenario – in which the government resorts to repression – is so fraught with immediate and long-term dangers that it should not even be attempted. The farmers’ movement has reached a stage where it no longer deals with the sectional interests of farmers alone but has deeply affected all sections of Indian society. It has truly become a Lok Andolan.

Once the deadlock is resolved by repealing the contentious laws, there is the important task of carrying out agricultural reforms to deal with rural poverty, farmer debt, suicides, and making small-scale farming viable and sustainable both economically and ecologically.

The old developmental paradigm that the demise of agriculture is necessary for economic progress is fundamentally flawed in the present era of global climate change, where sustainable agriculture is central to a new sustainable development paradigm. We must then move into a new realm of creative thinking, collective democratic policy-making, and long-term planning. This is the only way to deal with the challenges that Indian agriculture, economy, ecology and society currently face.

Pritam Singh is professor emeritus Oxford Brookes Business School, Oxford UK.

Farmer Leaders Say Ordinances Will End Existing Grain Market, Deprive Farmers of MSP

The controversial ordinances seek to include private players in agriculture – a move that protesting farmers say will destroy the sector and turn farm labour into industrial labour.

New Delhi: The urgent anger among farmers protesting against three agriculture-related ordinances that the Narendra Modi government introduced this year in June is growing, as can be seen by the large number of farmers out on the roads in various states despite the COVID-19 pandemic still raging.

Farmers across India are accusing the Centre of gradually doing away with the protection of Minimum Support Price (MSP) and of leaving farmers at the mercy of big traders who are moving towards agriculture in a big way.

‘Centre wants to make industrial workers out of farm labour’

Talking to The Wire, Rakesh Tikait, the leader of the Bharatiya Kisan Union, said, “Gradually, every effort is being made to push big business towards the agricultural sectors so that the agricultural labour becomes available for industrial work.”

He said the farmers are seeking a roll back of the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 and the Essential Commodities (Amendment) Ordinance, 2020 for a variety of reasons.

“The foremost is that now the protection of MSP is being taken away. We have repeatedly urged the Centre to ensure that as inter-state borders are opened to allow for sale of agricultural produce in any part of the country and that the farmer is given the guarantee that the produce will not sell for less than MSP anywhere,” he said.

‘No assurance from Centre on retaining MSP’

But, he said, let alone give an assurance, the Centre has not even been forthcoming about discussing the issues at hand. “We have tried several times to hold discussions. But as with the farmers insurance scheme – in which they did not discuss anything till after two years of passage of the scheme – this time too no one is coming forward to discuss the concerns being raised.”

Tikait said farmers, apart from holding protests in places like Chandigarh and Muzaffarnagar, have also been protesting in Delhi – on September 14 and thereafter – but there has been no response from the government.

Referring to how a businessman who used to provide audio systems for BJP’s rallies in Muzaffarnagar has now set up a sugarcane crusher to benefit from the changed norms, Tikait said this is only a prelude of what lies ahead. “We will soon have all kinds of big business coming in to set up farm related projects. This would also result in hoarding of produce in large quantities and their sale when the prices are high. As such, while the businesses will gain from the margins, the farmers will lose out on the benefits of high price of produce,” he said.

Also read: Haryana Farmers Protest Against Three Farm Ordinances, Face Police Lathicharge

‘Changes will promote contract farming’

Contract farming is about to make its presence felt in a big way, he said. “Already, the farmer is burdened by the high cost of seeds, power, fertilisers and transport. They will soon start giving out their land on contract to big players and the excess agriculture labour would in this way get released for working in industries at low wages.”

Thousands of farmers in Punjab, Haryana, Uttar Pradesh and several other states are on the roads to protest against three farm ordinances which were presented in the Lok Sabha on Monday. They have been pointing out that the new laws are anti-farmer and would destroy agriculture and even compel many distressed farmers to die by suicide.

‘Will end existing grain market system’

Another BKU leader Sahab Singh has been quoted as saying that the changes are aimed at ending the existing traditional grain market system. This is also a reason why many commission agents have also been opposing the move as they fear it would take their business away. At the moment, these agents often make advance payments to the small farmers before the cropping starts and the amounts, which act as short term loans, get adjusted at the time of sale of the produce.

On the other hand, the Centre has stated that the ordinances will provide barrier-free trade to farmers and enable them enter into farming agreements with private players prior to production.

The farmers are evaluating the impact of the changes to see if the new provisions hold promise or will simply push them into greater hardship and penury.

Also read: Centre’s Self-Registration Facility Led to Rs 110-Crore PM Kisan Scam, Says TN CM

Political parties unite to oppose move

The issue has also acquired political overtones with Punjab chief minister Amarinder Singh openly opposing the move and saying that “these ordinances will cause irreparable damage to farming in the state”. He spoke of how the Punjab Assembly had, on August 28, passed a resolution urging the Centre to withdraw these ordinances.

Sensing the resentment towards the ordinances among farmers, Lok Sabha MP and Shiromani Akali Dal leader Sukhbir Badal also said yesterday that the Centre did not consult his party, despite it being an NDA-ally, before introducing these ordinances.

“In June, the Central government brought three ordinances related to farmers. Before bringing these ordinances, there should have been discussions with farmers and political parties. The majority of our workers are from farmer families,” he said, adding that “when the ordinance was brought in cabinet, our representative in the cabinet raised queries. These ordinances are affecting Punjab the most. The farmers of Punjab did not get their answers.”

Haryana Farmers Protest Against Three Farm Ordinances, Face Police Lathicharge

The Union Cabinet had passed three agriculture ordinances in June, claiming them to be farmer-friendly. However, farmers allege that in the name of reforms, the government is planning to discontinue the MSP regime.

New Delhi: Hundreds of farmers and arhtiyas (middlemen) associations protested against three agriculture ordinances of the Central government at Pipli near Haryana’s Kurukshetra. As they marched towards the grain market, police lathicharged them for defying the administration’s warnings during a raging coronavirus pandemic, news reports said.

The demonstration was held by Bharatiya Kisan Union (BKU) who blocked the national highway-44 to protest against the central ordinances for the agriculture sector, the reports added.

The Union Cabinet had passed three agriculture ordinances in June: the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, and an amendment in the Essential Commodities Act, 1955.

The government says that the three ordinances will create a farmer- and trader-friendly environment where they will be able to sell and purchase agricultural produce. However, farmers allege that in the name of reforms, the government is planning to discontinue the MSP regime.

Also read: Centre’s Self-Registration Facility Led to Rs 110-Crore PM Kisan Scam, Says TN CM

As per an Indian Express report, former Haryana chief minister Bhupinder Singh Hooda expressed outrage over the police lathicharging protesters and said, “By bringing three anti-farmer ordinances during the coronavirus pandemic, the government has forced the farmer to come out on the streets and protest. No ordinance can be in the interest of the farmers unless it guarantees minimum support price of crops and there is a discussion in Parliament. If the government wants to make any changes in the system, it will have to guarantee the protection of the mandi and the MSP system.”

A Hindustan Times report quoted Haryana agriculture minister J.P. Dalal as saying that the state government is committed to provide minimum support price (MSP) for all the crops of the farmers in the state.

BKU state unit chief Gurnam Singh said, “The voice of farmers has to be raised, we want withdrawal of these anti-farmer ordinances, which will destroy the peasants and leave them at the mercy of market forces.”

Similar protests were held in Haryana and Punjab earlier.

Also read: Centre’s Advisory on Migrant Workers Ignores Existing Laws, States’ Need for Funds: Experts

What are the three Ordinances?

Finance minister Nirmala Sitharaman in May introduced an amendment to the Essential Commodities Act, 1955 as part of a COVID-19 relief measure. The Union Cabinet passed it in June and is now an ordinance. However, the Essential Commodities Act, 1955 will lapse if it doesn’t get cleared by the parliament in the upcoming session.

Under the amended Act, essential food commodities such as cereals, pulses, edible oil and sugar will be deregulated. Simply put, there will be no storage limit or movement restriction for the aforementioned commodities. Only under emergency situations, such as a natural calamity when production collapses, would limits on stocks be imposed.

Under the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, traders have to mandatorily pay farmers on the same day or within maximum three working days. It allows inter-state and intra-state trade of farmers’ produce outside mandis. The Ordinance also allows electronic trading of “scheduled farmers’ produce” in a “trade area”.

“Trade area” is defined under Section 2(m), as “any area or location, place of production, collection and aggregation including — farm gate; factory premises; warehouses; silos; cold storages; or any other structure or place, from where trade of farmers’ produce may be undertaken…” APMC mandis and private market yards have been excluded from the definition of trade area.

Basically, it aims to end the monopoly of the Agricultural Produce Market Committees (APMCs) and allow anyone to buy and sell agricultural produce. A person will be penalised up to Rs 10 lakh for non-compliance of provisions under the Ordinance.

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance allows farmers to sell their agricultural produce to private players. This Ordinance also attracts a penalty if a business fails to pay farmers on time.

Also read: PM Eco Advisor Says GDP Could Fall Upto 9% This Year, Calls for Stimulus Financed by Gold Amnesty

Experts’ opinion

Last month, N. Sai Balaji, research scholar at the CIPOD, wrote in The Wire about the three agricultural reforms and said that India needs a state-supported scheme that ensures income for damaged crops during a drought, flood or a cyclone. The analytical piece also pointed to the advantages private players will get through changes in the Essential Commodities Act. The changes, if passed by parliament, will neither benefit the consumer nor the producer, and will give corporates the legal right to hoard and take advantage of high prices.

Experts have said that the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance has been touted as a reform that will give farmers freedom to sell their produce anywhere in the country. However, currently farmers are already free to sell anywhere. Experts have maintained that farmers’ freedom to sell was never in question and calling the reform historic obscures real intervention.