Parmita Uniyal
New Delhi: Farmers and central government have been at daggers down for the last three months with no signs of a thaw in the sight. Farmers from Punjab and Haryana have been protesting at various highway entry points to Delhi demanding withdrawal of the three farm laws enacted in September.
The Modi government has instead been counting benefits of the three laws and termed them major reforms to allow farmers get remunerative price and more market access. Farmers are not ready to buy the argument. The two sides met on December 1 to find a solution to the problem but the meeting was inconclusive. Top Lead India explains the three farm laws and why farmers are up in arms.
Which are the three laws famers are protesting against:
The three farm laws that were passed by Parliament in September, 2020 and subsequently assented by the President are as follows:
1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act
2. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act
3. Essential Commodities (Amendment) Act.
Key provisions of the three laws, government argument in support of them and doubts raised by farmers:
1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act
Main objectives –
* The new legislation will create an ecosystem where the farmers and traders will enjoy freedom of choice of sale and purchase of agri-produce.
* It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations.
* The farmers will not be charged any cess or levy for sale of their produce and will not have to bear transport costs.
* The law provides for electronic trading in transaction platform for ensuring a seamless trade electronically.
* In addition to mandis, freedom to do trading at farmgate, cold storage, warehouse, processing units etc.
* Farmers will be able to engage in direct marketing thereby eliminating intermediaries resulting in full realization of price.
Doubts raised by farmers
* Procurement at Minimum Support Price will stop
* If farm produce is sold outside APMC mandis, these will stop functioning
* What will be the future of government electronic trading portal like e-NAM?
Clarification given by the government
* Procurement at Minimum Support Price will continue, farmers can sell their produce at MSP rates.
* Mandis will not stop functioning, trading will continue here as before. Under the new system, farmers will have the option to sell their produce at other places in addition to the mandis.
* The e-NAM trading system will also continue in the mandis.
* Trading in farm produce will increase on electronic platforms. It will result in greater transparency and time saving
2. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act
Main Objectives–
* The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field. Price assurance to farmers even before sowing of crops. In case of higher market price, farmers will be entitled to this price over and above the minimum price.
* It will transfer the risk of market unpredictability from the farmer to the sponsor. Due to prior price determination, farmers will be shielded from the rise and fall of market prices.
* It will also enable the farmer to access modern technology, better seed and other inputs.
* It will reduce cost of marketing and improve income of farmers.
* Effective dispute resolution mechanism has been provided for with clear time lines for redressal.
* Impetus to research and new technology in agriculture sector.
Doubts raised by farmers
* Under contract farming, farmers will be under pressure and they will not be able to determine prices
* How will small farmers be able to practice contract farming, sponsors will shy away from them
* The new system will be a problem for farmers
* In case of dispute, big companies will be at an advantage
Clarification given by the government
* The farmer will have full power in the contract to fix a sale price of his choice for the produce. They will receive payment within maximum 3 days.
* 10,000 Farmer Producer organizations are being formed throughout the country. These FPOs will bring together small farmers and work to ensure remunerative pricing for farm produce.
* After signing contract, farmer will not have to seek out traders. The purchasing consumer will pick up the produce directly from the farm.
* In case of dispute, there will be no need to go to court repeatedly. There will be local dispute redressal mechanism.
3. Essential Commodities (Amendment) Act
Main Objective
The law removes commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. This gives traders and private firms freedom to stock foodgrains without any limit.
Arguments given by the government
* The law removes fears of private investors of excessive regulatory interference in their business operations.
* The freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector/foreign direct investment into agriculture sector.
* It will help drive up investment in cold storages and modernization of food supply chain.
Doubts raised by farmers and agri experts
The freedom to stock foodgrains will ensure entry of large corporates. The corporates will make bulk purchase leading to price rise. This will only benefit the hoarders and black-marketers and not farmers.
Clarification given by the government
The law ensures that interests of consumers are safeguarded. It has been provided in the law that in situations such as war, famine, extraordinary price rise and natural calamity, such agricultural foodstuff can be regulated.
One of the frequently asked questions has been why only farmers from Punjab and Haryana have problems with the new laws and not those from other states?
The crops produced in one region is different from the other region. Punjab and Haryana primarily produce wheat and paddy which are mostly procured by the government at minimum support price (MSP). In other states, procurement of wheat and paddy by the government is very low and hardly makes any difference whether government procures the produce or not at the MSP.
The farmers from Punjab and Haryana fear that the new law promotes private companies to enter into trading of agri commodities and government would eventually get out of the procurement business. This will badly hurt the farmers as market price of most crops are mostly lower than MSP. This will, hence, result in lowering of their income.
Pic credit: Internet