1.         Amid the showdown in Parliament, the Lok Sabha on 17 September passed two Farm Bills as historic reforms in the agriculture sector. The bills passed were the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill and The Farmers' (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020.The first bill is on agricultural market reforms, while the second is about contract farming provisions. A third Bill on amending Essential Commodities Act was passed a couple of days prior.Together, the three Bills would replace ordinances passed earlier by the Rajya Sabha.

The Farmers' Produce Trade & Commerce (Promotion and Facilitation) Bill.

2.          The key provisions of this Bill are as here under:-

              (a)  To create an ecosystem where farmers and traders will enjoy the freedom to sell or purchase farm produce outside                  registered ‘Mandi’s’ under the State APMCs.

(b)  To promote barrier free interstate/ intra state trade of farmers produce.

(c)   Reduce marketing and transportation costs and help farmers in getting prices.

(d)  Provide a frame work for electronic trading.

3.         There have been wide spread protests against the introduction of this bill due to following misapprehensions:-

             (a)   The States will revenue as they will not be able to collect “Mandi fees” if farmers start selling their produce outside                   the  registered mandi’s under the states APMCs markets.

            (b)  The bill will adversely affect influential commission agents if the farmers move out of the Mandi’s. Commission                          agents  want to retain their control and grip over the farmers.

            (c)  The Bills will end the Minimum Support Price (MSP based procurement regime.

            (d)   Electronic trading will lead to end of e NAM which is an electronic platform that works with physical Mandi structures.

The Farmers' (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020

4.          The key provisions of this Bill are as here under:-

             (a)  Farmers will be able to enter into contracts with agri-business firms, processors, exporters, wholesalers or                 large retails for the purpose of sale of their produce at a pre-decided price.

(b)   Small and marginal farmers with land holdings less than 5 hectares will stand to gain.

(c)   The bill will transfer the risk of market and boost farmer’s income.

(d)   The bill eliminates the role of intermediaries and enables farmers to engage in direct marketing for full price realisation.

             (e)     It will enable an effective dispute resolution mechanism with redressal timelines.

5.        There have been wide spread protests against the introduction of this bill due to following misapprehensions:-

                (a)   The farmers in contract farming will become weaker players in their ability to negotiate their requirements.

               (b)   The bill will give an upper hand to sponsors who will have an edge in disputes being big exporters,                             wholesalers and processors.

Essential Commodities (Amendment) Bill, 2019

6.           The key provisions of this bill are:-

              (a)     The bill provisions to remove commodities like pulses, oilseeds, onions, potatoes and cereals from the                    list of essential commodities.

              (b)    The bill will also do away with the imposition of stock holding limits on such items except during extra                      ordinary circumstances like war.

             (c)     The bill aims to attract Foreign Direct Investment into the farm sector.

             (d)     The bill aim isto attract investment for farm structures like modernisation of food and supply chain and                      cold storage.

             (e)    The bill aims to help both farmers and consumers and bring price stability.

             (f)      The bill also aims to pave way for a competitive market environment and cut wastage of farm produce.

7.         There have been wide spread protests against the introduction of this bill due to following misapprehensions:-

            (a)   The price limits set for extraordinary circumstances are so high that they might never be invoked.

            (b)  The bill will enable large companies to stock up commodities. They will be able to dictate terms t farmers, which may               lead to less prices for the cultivators.

8.          It is a well-known fact that all is not well with the existing mandi system for marketing of agricultural produce. Firstly there are not enough mandi’s and also cartelisation of traders as well as politicisation of the market committees. The new legislation seeks to allow private market forces into the largely government regulated farm sector. Currently farers take their produce to wholesale markets or mandi’s governed by the Agricultural Produce Market Committees (APMC). The prices to be paid to the farmers are decided by the APMC who then buys and sells further.  Historically this has meant that farmers have a market certainty for being able to sell their produce. The government is of the view that by allowing private players into the fray, farmers can potentially negotiate higher rates and become active participants in their economic prosperity.  However the fear around the new legislations stems from the long standing convention of MSP which the government offers as a cushion to the farmers during sharp price fall during a particular season. Farmers are apprehensive that MSP would lose its teeth with a pure market play. However, since Mandi’s are not being shut, it offers greater autonomy to the producers. Scepticism against the bills is as a result of lack of information with farmers to be able to negotiate the right prices for their produce in open market.