New Farm Bills

Why in news?

• Farmers have restarted the agitations in Delhi against the farm bills.

About the Bills:

• There are three bills which are intended to give approval to ordinances earlier promulgated.

1.The Farmers’ Produce Trade and Commerce (Promotion and      Facilitation) Bill, 2020:

• This proposed legislation seeks to give freedom to farmers to sell their produce outside the notified APMC market yards (mandis).
• This is aimed at facilitating remunerative prices through competitive alternative trading channels.
• Farmers will not be charged any cess or levy for sale of their produce under this Act.
• Benefits:
  • It will open more choices for farmers
  • reduce marketing costs
  • Help them get better prices.
  •  It will also help farmers of regions with surplus produce to get better prices and consumers in areas with shortages at lower prices.
• Opposition:
  • States will lose revenue as they will not be able to collect ‘mandi fees’ if farmers sell their produce outside registered Agricultural Produce Market Committee (APMC) markets.
  • Also, commission agents stand to lose if the entire farm trade moves out of mandis.
  • But, more importantly, farmers and opposition parties fear it may eventually lead to the end of the minimum support price (MSP) -based procurement system and may lead to exploitation by private companies.

2. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020:

• This proposed legislation seeks to give farmers the right to enter into a contract with agribusiness firms, processors, wholesalers, exporters, or large retailers for the sale of future farming produce at a pre-agreed price.
• Benefits:
  • It seeks to transfer the risk of market unpredictability from farmers to sponsors.
  • Besides giving them access to modern tech and better inputs, it also seeks to boost farmer income by reducing the cost of marketing.
• Opposition:
  • Farmer bodies and opposition parties say the law is framed to suit “big corporates who seek to dominate the Indian food and agriculture business”.
  •  It will weaken the negotiating power of farmers. Also, big private companies, exporters, wholesalers, and processors may get an edge.

3. The Essential Commodities (Amendment) Bill, 2020:

•  This proposed legislation seeks to remove commodities like cereals, pulses, oilseeds, onion, and potatoes from the list of essential commodities.
• It will also do away with the imposition of stock holding limits on such items except under ‘extraordinary circumstances’ like war, famine, extraordinary price rise and natural calamity.
• Benefits:
  • It is aimed at attracting private investment/FDI into the farm sector as well as bringing price stability.
• Opposition:
  • Big companies will have the freedom to stock commodities, helping them dictate terms to farmers.

Government Stand:

• The present MSP mechanism for farmers will continue.
• Also, the proposed laws would not encroach upon the Agriculture Produce Marketing Committee (APMC) Acts of the states.
• These Bills are to ensure that farmers get better prices for their produce without being subject to the regulations of mandis.
• Acts will increase competition and promote private investment which will help in the development of farm infrastructure and generate employment.

Prelims Question

Consider the following statements regarding “Farmers’ Produce Trade and Commerce (Promotion and  Facilitation) Bill”:
1.It will supersede and completely invalidate the Agriculture Produce Marketing Committee (APMC) Acts passed by states.
2.The main purpose of the bill is to facilitate contract farming by giving farmers the right to enter into a contract with agribusiness firms for the sale of future farming produce.
Which of the statements given above is/are correct?
(a)1 only
(b)2 only
(c)Both 1 and 2
(d)Neither 1 nor 2

Answer to prelims question