Farm Bills 2020 – Pros, Cons & Challenges

Farmer bills - Pros, Cons & Challenges

Theme:

  • On 20th September 2020, Parliament passed three farm bills, which created protests in the country.
  • The three bills are –
    • Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill‘, 2020 – ‘One Nation-one market’ concept was introduced to allow farmers to sell the produce anywhere in the country.
    • Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill‘, 2020 – Contract farming empowers farmers to engage with wholesalers, exporters etc. so that they will get the price assurance before sowing the crop.
    • Essential Commodities (Amendment) Bill‘, 2020 – This bill removed pulses, oilseeds, onions and some other products from the essential commodities list, and thereby the restrictions on the storage of these items will be removed.

Pros:

  • One nation – one market can end the monopoly of ‘Agricultural Produce Market Committees‘ (APMCs). APMCs criminalises setting up of other competing markets. Some states made it mandatory for farmers to trade with only APMC-licensed traders. With Farmers’ Produce Trade and Commerce bill, farmers can sell the produce as per their choice. So the problem of middlemen, which is one of the main loopholes of APMCs will be eliminated.
  • In some states, there is a surplus of some vegetables and fruits, whereas in some other states there is less supply and more demand for them. Through one nation-one market, corporate companies can bridge this gap benefiting the consumers.
  • It will attract private investments in the agricultural industry. Private investments can improve the infrastructure of the agricultural sector, which can lead to its modernization. The competition to buy the produce can fetch better prices for farmers. They may even come to the farmers to take the produce, saving the transport costs for farmers.
  • Contract farming is helpful for farmers because they will get price assurance beforehand. Some companies provide seeds, fertilisers and other requirements too, which will reduce the burden of input costs for farmers.
  • Essential commodities bill, 2020 can help in stabilising the prices. For example, if the onion supply is more than the demand, they can store them to prevent the price fall. This will also improve the cold storage facilities in the country.
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Cons:

  • The process of passing the bills is not democratic. Agriculture and trade are state subjects, but the states are not consulted before passing the bills. The main people for whom the bills are made – farmers were also not given the opportunity to voice their concerns. Even in the parliament, clear voting was not conducted. They passed the bills on a mere voice voting.
  • APMCs are very helpful for small farmers not just to sell the produce but also to know the prices & production choices. Many states have amended the APMC acts to make it more liberal. The passing of farm bills 2020 may weaken the APMC system and hence can become a disadvantage to small farmers.
  • There is no guarantee that the farmers’ income will be increased by these bills. If we take the example of Bihar, when the state abolished APMCs in 2006, farmers got lower prices for their produce than the Minimum Support Price (MSP). So, agricultural economists are suggesting that it is important to strengthen the APMCs, instead of transferring the responsibility to private entities.
  • One nation – one market may not be much useful to small farmers, because transporting the produce requires more expenditure than selling them at the nearest APMC.
  • Contract farming may turn farmers into slaves.
  • Removing the restrictions on the storage of some foodgrains may lead to more imports at cheaper prices affecting the domestic farmers. And big businesses may store the foodgrains to increase the prices artificially.
  • Unless the prices are regulated by the government, the market will go into the hands of big businesses putting both the farmers and the consumers at the risk of exploitation.
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Challenges:

  • There is a mistrust in farmers on the government for passing the bills without debate. Implementing the laws in these circumstances will be a challenge
  • As the restrictions on storing some products are removed, imports of those products may increase. So, protecting domestic farmers from such imports will also be a challenge.

Conclusion:

The way the bills are passed created mistrust in farmers on government sidelining the positive sides of the bills such as the opportunity to modernise the Indian agricultural sector. It is the responsibility of the government to take the opinions of farmers and also of the states before passing such bills.

Moreover, the main thing to do to ensure the betterment of farmers is strengthening the government market spaces – APMCs and to eliminate the loopholes in them.

Your Turn…

Do you think Farm Bills 2020 can increase the income of farmers? Express your thoughts through the comment section below. And subscribe to our blog to read answers to the trending GD topics.

References:

  1. It’s a no green signal from the farm world
  2. Hardly the 1991 moment for agriculture
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19 comments

  1. As per my opinion before passing these three bills in the Parliament The opinion of farmers should have known because these bills are related with farmers . But unfortunately it didn’t happen . Gvt is saying that we are going to double the income of farmers. But How ? One nation one market is not good for every farmers . I would like to give some examples . Suppose I have 20 kg onions and I want to sell .then a person told me go to Tamil Nadu and sell .where u will get maximum profit but the transportation is very costly . Instead of getting 20 ruppes profit I will have to pay thousands . Is it in my favour . Absolutely No. I would like to sell in those Mandi’s which is near at me . So that transportation could be minimum . Second thing is about contact farming .As per law Corporate sector will provide seed, fertilizers & other things and they will pay before acquiring the land . But why I need to give it . Suppose my Land is not futile and they want to grow some kinds of crops which is not possible in the land .then after what will happen ? They will recover their money & say sorry, Your land is not capable to Grow these kinds of Crops now I need to money . Then in this case where will I go . As per law you can Complain up to only ADM . U haven’t right to file a case against him/ her company in the High court or supreme court . So overall I want to say is First talk with farmers those who are protesting and get to know their opinion . If they are ready then fine no need to debate or argue . Thanks

  2. According to my point of view, this three bills is not beneficial for the small farmers, yes it may be beneficial for the middle man farmers. When this bill was not announced by the govt. till that time small farmers were happy to produce near by the APMC places, because APMC has given the right not just to sell the produce but also knows the price and production choices. The passing of bill 2020 may weaken the APMC and hence became a disadvantage for small farmers. One nation one trade bill is more expenditure for small farmers, as they have to bear the expense for exporting the produce. And also one more disadvantage is removing the restrictions of storage of the produce, for that they have to sell the produce when production will be high, but business man is getting benefit because they will store the produce and they will wait for the price to increase.

  3. According to me, advantage and disadvantage both will happen from this three bills. big farmers have advantage but small farmers have disadvantage from this bills.becouse small farmers can’t store the product,so they sell the product at fix price but big farmers store the product and sell it high price.

  4. I think these bills are only helpful for big farmers because the small farmers can not afford the transportation fare to sell their crop to the other state of India. so these bills should be reformed.
    govt. should give the guarantee of MSP and APMC that will be not removed.

    1. Government in recent press conference clearly said , we will give in written that current system of APMC, and MSP will remain as such. They are just giving more choices to Farmers. Regarding beneficial for small farmers, currently 86% of farmers are small farmers and most of them don’t have as you said provision to go to Mandi’s as they are not in sufficient level to take there produce to Mandi. So they generally sell there produce to local village market shops. By these laws more Mandi’s will be created , aslo government already approved making of 10000 Farmer Produce organization which will collect produce from Farmers like how Amul collects milk from each and every small farmers. I’m with farmers reagrding there demands and I have seen government agreed with there demands in recent press conference. Dialogue between farmer and government is best solution. I find intent of government is for the benefit of farmers.

  5. I am in favor of three bills passed by government. My supporting points are:-
    1- APMC mandi’s are not getting closed, farmers are just getting an additional option to sell their produce. It totally depends on them whether they want to use that option or not.
    2- MSP is used by only 6% of farmer overall India, rest of the farmers are still selling to private players may be indirectly through mandi’s.
    3- MSP can’t be given to all the commodities as government has no financial power to buy all the produce harvested by farmer.
    4-Major issue is the inclination of farmers towards Wheat and rice due to MSP. Farmers are not moving towards crop diversification because of no market available to buy there product. If private player comes to the market and give good amount to farmer to produce say Maize, then farmer will definitely move towards Maize. Currently production of rice has huge impact on environment, water table depletion, soil degradation, water contamination as to produce 1 kg of rice 5000lt of water is required, we are exporting 5000 lt water for free with 1 kg of rice outside India.
    4- All genuine problems regarding involvement of court, protection of land, registration of private mandi, registration of contract etc. is addressed by government in latest talks.
    5- If market will drive price of goods, competition will increase, price of product will be high thus helping farmers, also commission and cess levied can be shared between customer as well as farmer, overall helping in rise of farmers income.
    6- Regarding fears that private sector will make farmers slave is far fetched. Best example is currently working sector of dairy industry, how milk is handled by AMUL, there is no MSP on milk, MNC like Nestle is involved in milk collection and collect milk from more than 1 lakh farmers, even Hatsun agro private company in South India is there is dairy sector, no one is harassing farmers. Government had announced formation of more than 10000 Farmer producer Union which will help in making farm sector Atam Nirbhar.

    I will say intention and vision of reforms are very good, how it’s implemented in ground is the major challenge.

    1. I dont agree with you….bcoz talking about elimination of apmcs mandis are very beneficial for farmers in the some states like punjab nd haranya bcoz there are vast spread of the network of local mandis ….. This bill clearly states that there will be 6% tax on the traders if they purchase inside the mandis but they dont have to pay any tax outside the mandis due to which no trader will go into the mandis nd apmc system will automatically be demoshiled after sometime.
      There’ s no guarantee of getting msp outside the mandis.
      In the states like bihar nd up govt.has no interference in the purchase of grain due to which farmers are getting fair price for their crops
      There r many loopholes in these bills that should be addressed by govt.

      1. Loopholes in bill -Definitely Yes.
        Solution- Talks with farmers , sharing concern and solving. Many things cleared by government in press conference and agreed to demands of farmers.
        Now issue is the stand to completely repel the law which is not rational, if still concern is there then only dialogue between two parties is the solution.
        And you are saying elimination of mandi is beneficial for Punjab and Haryana farmers , so why they are protesting????
        Regarding 6% tax if bought through Mandi, there isn’t any mention in laws like this. And concern about mandi is not whether traders will buy from mandis or not, its about whether government will buy from mandi’s or not. Government have to buy according to Public Distribution Act to meet rationing demand of whole India. Law gives only added option to sell outside mandi.
        It’s completely farmer choice to sell in Mandi or outside. If farmer is getting good price outside then only he will sell outside mandi.
        Also if there is no tax or less tax in buying outside mandi, its completely a win win situation, those tax amount can be shared between farmer and company.
        Farmer can form union, there is already many unions, they will represent farmers, proper price will be given and can be negotiated. Also government is working on development of Farmers Producer Organization of which small farmers will be part of, they can speak through that organization
        I will again quote example of milk, many MNC, private player, government player working in this field, no one exploiting farmers. Nestle taking milk from 1 lakh farmers. . Reforms are much needed in agriculture sector.
        Bihar and UP example is again I can’t understand. In Bihar APMC mandis are already abolished.

        I am again saying i am with farmers, I will say we should share concern, solve through dialogue, government intention through laws is not bad. Still open to any concern and issue.

  6. offcourse,farmers have both advantages and disadvantages from this bill.But, in my point of view there is no guarantee that all the farmers wii be profited by this 3 bills.we cannot acess all farmers can bare charges for their crop to sell out of state or inter state.just they will onlyhave one choice that should be sell at nearby APMCs.

  7. I think the whole bill is not wrong , because it is implemented for favouring the farmers but the main question arises here is why farmers are protesting then…..
    1) like in bihar case in 2006 they get produce prices lower then msp so , there is possibility that it will happen again.
    2) small farmers can’t afford exportation expenditure to selling in different states
    3) horders may store old produces and sell them when their price is high it will directly affect farmers as the new produces price get affected …
    4) if it will go towards modernization then farmers have to agree to private companies flows.

    1. 1) Farmers in Bihar are getting lower prices for their produce which are even below the MSP because APMC Act has been completely abolished over there which gives the big corporates a ground for exploitation. But the situation in Punjab and Haryana is different. Here, the government has given alternative options to the farmers to sell either at APMCs or in the free market depending upon wherever they get better prices. This will break the monopoly of such APMCs and the exploitative middlemen. Nowhere, it states that the MSP will be taken away or APMCs will be shut down. These farm bills clearly intend to benefit the small and vulnerable farmers constituting roughly about 86%. It s the middlemen (arhatiyas) and the state government (who earn revenue via AMPCs) whose interest is being affected.
      2) It is a far fetched idea to expect small farmers to transport their produce to other states instead of selling it at places in the nearby because transportation and storage requires money.
      3) Allowing storage of certain commodities is definitely not a good idea as it will enable the hoarders to raise prices artificially.
      4) Modernisation will empower the farmers and in no way make them slaves to the big corporate houses.

  8. According to my point of view government passed these farm Bill’s for the benefits of farmers and modernization in agricultural industry but still there isa doubt that the farmers actually get any benefit from these Bill’s.according to me it is not that much beneficial for small farmers. What if the investor not invest in there produce.also during APMCfarmers can sell their produce in nearby places but these Bill’s increase the transport expenditure of farmers .according to me strengthen the apmc system is the best solution.

  9. According to me, no farmers will be going to benefit from three farm bills. I would like to say one thing like in contract farming there is a chance for the exploitation of consumers. I will explain it say for example if the farmer gets agreement on the price by a corporate firm high price for his produce before sowing the crop. there is a natural disaster affected produce before the harvesting of the crop. fare enough the problem will begin from here, the corporate firms are buying the produce from the farmer as on the agreement. After buying the all produce from the farmers and it would be stored in cold storages. after that corporate firms create a declining supply and develop high demand in the market for the particular product artificially. it will show the effect on both farmers and consumers. farmers buy their own produce at a higher cost. here most of the consumers affected. finally, one more point is if the market price for particular in Bangladesh is high compared to our country so the corporate will export the produce into Bangladesh why means there is a high market price for a particular product.

  10. According to me Govt. Passed the three Bill’s to take care the farmers but how much farmers will get benefit there is doubt. One market one nation may be farmers will incur more profit but we know some of the states there some of the crops are huge production as a result that areas people can purchase the price little less if farmers sales there produce where production is less then state people will not be able to purchase, for example in West bengal potato production much than other state if west Bengal farmers will sales their total produce to the other state then west Bengal people will have to purchase potato in a high price so Govt is not thinking for common people how they will manage. Secondly private organizations and corporate sector can invest their money in agriculture sector. As a result famers before sowing the plantation they have to commitment to the organizations. Earlier years we have seen farmers couldn’t have got money to sales their produce but middleman they used to earn more money and right now private organizations and corporate sector will incur profit and farmers will not. Thirdly govt removed pulses, edible oil, potato, onion etc from essential commodities. According to me these all are not essential commodities ? Then poor and middle class people will not use thses products ? So govt is not taking care of the common people rather govt is taking care of industrialist and corporate sector.

    1. I think the laws passed are olosh but there are some inherent flaws in it firstly there should be a regulatory body( consisting of dm, 30percent corporate mebers ,40percent farmering expersts,40percent farmers) which ensures that farmers get price for their own producE and rhe contract is followed.the same body must see that their is strengthening of APMC and it’s msp.they sholud ensure that all the products are bought by the gov coming in apmcs.the msp in the APMC will decide the price in the market.but i donot support msp in free market as that would destroy the whole meaning of this reform

  11. Here, I want to add some more points in cons –
    1) These laws will make India’s farming sector a puppet of private agencies. As, contract farming is being encouraged, it is good only upto some extent. Private agencies will provide some profit to farmers and further, to earn more profit, farmers will increase use of fertilizers which will affect environment, soil health as well as consumers’ health adversely.
    2) Hoarding has been allowed by these bills, so now, markets will be controlled by these hoarders only. They will able to increase and decrease the price of agri products according to their will.
    3) the way in which these bills have been passed, although a member asked for clear voting yet bills were passed by voice voting. This process is against the spirit of our constitution.

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