What is Farm Bill- why are farmers protesting?
INTRODUCTION
The Indian Farms Reforms 2020 (Farm bill) was passed by the Lok Sabha on 17th September 2020 and by the Rajya Sabha on 20th September 2020. Later the President of India, Ram Nath Kovind gave his assent for the three bills on 27th September 2020. The farmers of mainly from Punjab, Haryana and western Uttar Pradesh are angry with the provisions of these Bills. Farmers and others have called the bills “corporate-friendly and anti-farmers. Farmers think that the bills will make farmers on mercy of corporates.
What is the Farm Bill?
The three acts include are as below-
- Farmers Produce Trade and Commerce (Production and Facilitation) Act, 2020.
- This bill expands the scope of trade areas of farmers’ produce and allows the farmers to sell their produce outside the Agricultural Produce Market Committee (APMC) regulated markets. Thus farmers have the choice to sell their produce anywhere.
- It allows electronic trading and e-commerce of scheduled farmers’ produce.
- The bill also prohibits state governments from levying any market fee on farmers, traders, and electronic trading platforms for trade of farmers’ produce conducted in an ‘outside trade area’ (APMC).
- Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020.
- This bill makes provisions for the setting up of a framework for contract farming. It provides a legal framework for farmers to deal contracts with buyers including mention of pricing before the production happens.
- Defines a dispute resolution mechanism.
- Essential Commodities (Amendment) Act, 2020.
- Removes commodities like cereals, pulses, potato, onions, edible oilseeds and oils, from the list of essential commodities, removing stockholding limits on such items except under “extraordinary circumstances” such as war.
- This provision will attract private sector and FDI to invest into farm sector as it will reduce lengthy regulatory interference of private investors in business operations. Thus bring investment for farm infrastructure like cold storages.
- The bill will help both farmers and consumers by bringing in price stability and will create competitive market environment and reduce wastage of farm produce.
What Government Says?
- The government says that the new laws will give farmers the freedom of choice to sell and purchase their produce inter-state and intra-state. And thus farmer will be engaged in direct marketing of their crops too by eliminating intermediaries for full price realization.
- It transfers the risk of market unpredictability from farmers and reduces cost of marketing and boost farmer’s income.
- Effective dispute resolution mechanism with redressal timeline.
Why are Farmers Protesting? - They fear the government will no longer continue the procurement of farm produce at MSP if the new bills become law and thus they will not get the Minimum Support Price (MSP). Farmers from Punjab and Haryana, where nearly 70% of wheat is procured at MSP by the Food Corporation of India and state agencies, are therefore more aggressive as it will hurt their earnings ahead.
- The effect on middlemen, loss of states’ revenue and low bargaining power of the farmers are some of the fears. Farmers believe that big buyers will be benefited and farmers will stand on the mercy of corporates.
- Farmers believe that, Being big private companies, exporters, wholesalers, the sponsors will have an edge in disputes. They will have the freedom to stock commodities. It means they will impose terms to farmers which may lead to fewer prices for the cultivators.