Farmers Bill 2020 and its repercussions towards the general public
Abhishek Sinha 5 Apr 2021

Farmers Bill 2020 and its repercussions towards the general public


The Farmers Bill 2020 (hereinafter referred to as “The Bill”) has made all the headlines and has definitely caught everyone’s attention for not so good reasons. According to the Government this bill aims to improve the already dire situation of the agricultural industry in India. The said bill has introduced three below-mentioned acts:

1. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020.

2. The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020. 

3. The Essential Commodities (Amendment) Act, 2020.

These bills were presented in the Lok Sabha on 17th September, 2020 and in Rajya Sabha on 20th September, 2020. Subsequently, they were given the accent by the President on 24th September, 2020. 

Brief Outline and the new Bills Introduced

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020: This legislation permits farmers to trade without restrictions in India. This Act provides a countrywide basis for the Farmer-Sponsor arrangements, i.e. the trader or buyer. It also facilitates the barrier-free exchange of agricultural products between States and intra-State and offers a basis for electronic trade. 

According to Section 3 (1) of this act, a farming agreement can be constituted between the farmer and the buyer which would provide the essentials of the trade such as price, standard, quantities. This agreement ensures that the farmer gets the pre-determined value of his produce and the value once decided in the agreement cannot be changed irrespective of the market prices.

It also contains a “Force Majeure” clause wherein if the farmer does not deliver the pre-decided amount of produce due to natural calamity, the said amount cannot be recovered against the farmer. Also the Sub-divisional Magistrate would be the adjudicating authority in these kinds of disputes. Section 3 (3) of this act also gives farmers the opportunity to enter into an agreement with corporates. 

The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020: This Act enables farmers to engage in inter-state trade outside mandis and also provides that no market fee shall be levied on trade executed outside of the mandis. The purpose of this act is to widen the scope of selling famers produce and also enabling farmers to sell where they want and where they get the best value for their yield.

The Essential Commodities (Amendment) Act, 2020: The Bill enables the central government, though only under exceptional circumstances to control the supply chain of certain food products (such as war and famine). Only if there is a sharp increase in price the stock limits would be imposed on agricultural products.

The government also ensured that the interests of consumers were safeguarded while liberalizing the regulatory climate. The Amendment provides for certain agricultural food items to be controlled in circumstances such as war, drought, exceptional price rises and natural disasters. The installed capacity of the participant in the supply chains and the exporter's export demand will remain excluded from this stock limit imposition, so as not to deter investments in agriculture.

Reason behind farmers protest:

It has made the headlines that farmers are protesting at the Delhi border and one of their main contentions is that MSP (Minimum Support Price) is not guaranteed under these new laws and also the farmers fear that mandis would become redundant once these laws come into force and they would have to sell their produce outside the mandis at a relatively lower price. The whole unrest can be attributed to the fact that as per the farmers there is no specific provisions when it comes to MSP and they fear that the absence of such provision would make them subjected to exploitation. 

Several farmers have stated that the ruling government is heavily inclined towards the big corporate houses and these legislations reflect the same ideology. They further have argued that these laws have also been approved in an unconstitutional manner. 

Conclusion and how these laws would affect the general public

There is no denying of the fact that currently this issue has come out as a massive outrage from the farmers and also certain political parties. The Supreme Court of India has also granted a stay on these laws and has suggested constituting a committee which would submit a ground report suggesting if there are any amendments that are needed to done. These laws though are enacted to uplift the agricultural sector, are filled with loopholes through which farmers can be exploited. One of them being the entry of corporate entities, it is believed that the entry of these entities would only benefit big farmers as they place huge orders of produce. Also, corporates have a well structured legal team which can exploit small farmers in case where a dispute arises. 

One more concern from a judicial point of view would be that the adjudicating authority would the sub-divisional magistrate and talking about the ground level, it would only increase their work load which would result in in-efficient adjudication process. 

The biggest concern of the general public would be the state of monopoly. Once it is struck by the corporates in the agricultural sector, they could demand any price and we have to pay them accordingly. What we are buying at Rs 10 right now would become Rs 100 if this situation is met with. 

Going forward, these bills though are enacted with good legislative intention are needed to be re-structured and that could only happen with realizing what is happening at the ground level. With certain amendments and government’s watchful eye, these laws can reform the agricultural sector and can realize its true potential. Agriculture industry in India has huge upside potential but unfortunately is still in a dire condition. Some reforms are desperately needed in this sector and whether these laws can be those reforms is yet to be seen. 

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