Farm Bill 2020: Do Farmers Really Need These



“Agriculture is the most healthful, most useful and most noble employment of man”

- George Washington

 

 

The COVID-19 pandemic affected the world economy very badly. Every country undertook special steps to fight against the pandemic by maintaining social distancing. Additionally, restrictions on travel and trade were laid down in most of the countries across the world to limit the spread of the virus. All these measures against the pandemic vastly affected the major economic sectors such as agriculture. 

 

Agriculture is one of the most important economic sectors patronizing food security and human development. The Indian farmers were also amongst the worst-hit by the COVID-19 pandemic. Hence, the government introduced the farm bills in order to enable easy access to farmers to markets across the nation and thus increase their income through private investments. It aims to prevent farmers from plummeting into debts due to traditional intermediaries. 

 

On 27th September 2020, India’s President Ram Nath Kovind gave his assent to the three most controversial farm bills. The farm bills were passed in the Rajya Sabha in a way you cannot even guess. The opposition claimed that the government lacked the requisite numbers and hence they flouted many rules and thus they wanted the bills to be sent to a select committee. However, this resolution of the opposition was not considered and the bills were passed by voice vote amid the vociferous opposition protests. 

 

The three bills are as follows:

 

(i)   The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill 2020;

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

(iii) The Essential Commodities (Amendment) Bill 2020. 

 

Till date, the farmers used to sell out their agricultural produce to the Agricultural Produce Market Committee which is governed by the respective state governments. A farmer could sell his agricultural produce to the specific mandi which has been allotted to him in his region. Similarly, a trader could trade only in the specific mandi for which he holds the license. Farmers sell their produce through auction at the Minimum Selling Price (MSP). The MSP is restricted only to the items contained in the Essential Commodities Act. The Price Discovery method is used to determine the prices of other commodities on the basis of market demand and supply. Further there are middlemen involved who purchase the agricultural produce from the farmers and further sell it to the local mandi.

 

These farm bills aim to bestow upon the farmers the liberty to trade across states and emancipate them to be traders of their own product and master the process thus putting an end to the mandi system. Its raison d'être is to create an ecosystem wherein the farmers and traders have the liberty to trade their agricultural produce and carryout inter and intrastate trade outside the market area specified in the APMC Act without any impediment. The current changes will lower the powers of APMC or maybe even kill all of it. 

 

Now the flip side of these bills is that the person in question is a farmer who might not possess the art of bargaining before industrial giants. These private players will enter the markets and exploit the farmers furthermore worsening their condition. Besides, it would be highly irrational to postulate that the farmers in Punjab who are habituated to the traditional mandi system would sell their products to someone in Maharashtra given the fact that India is still yammering with connectivity issues and the cost of transit might exceed the one paid to APMC’s.

 

Besides, one of the reasons which gave an impetus to protests throughout the country is for the unconstitutional manner in which the bills were passed and ideally it is the state governments which regulates agricultural subjects. The Parliament may rationalize the passage of these bills by promulgating that they were enacted in exercise of its powers to legislate under Entry 33 in List III as entailed in the Seventh Schedule of the Constitution.

 

The Seventh Schedule of the Constitution of India consists of the Union List (List I), the State List (List II) and the Concurrent List (List III) each stipulating subjects on which the Centre and State can legislate. The States under Entry 14 in List II have the exclusive authority to legislate on agricultural subjects. Moreover, the States have the absolute authority to make laws with respect to markets under Entry 28 in List II. Whereas, under Entry 33 in List III both Parliament and State legislatures have the power to legislate in matters relating to Trade and Commerce in, and the production, supply and distribution of, foodstuffs, including edible oilseeds and oils, cattle fodder, including oilcakes and other concentrates, raw cotton, whether ginned or unginned, and cotton seed and raw jute. Albeit the fact that markets fall in the absolute legistorial competency of the State, the Parliament went ultra vires and altered the dynamics of trading farmers produce. This gambit of the Parliament infringes the basic structure of the Constitution.

 

The Empowerment and Protection Act attempts to empower the farmer by granting him the prerogative to enter into a farming agreement with any person known as ‘sponsor’. However, both the Promotion and Facilitation Act and the Empowerment and Protection Act preclude and overthrow the jurisdiction of civil courts. The individuals contracting under these laws are barred from approaching the judiciary even under a farming agreement, which is essentially governed by the principles of contract law. The dispute resolution mechanism deliberated in these acts is through a conciliatory process. In case a party is not pleased with the decision, the matter can be referred to the Sub Divisional Magistrate or the Additional Collector.

 

Conclusion

 

The Indian farmers are significant in not only feeding the world’s largest democracy, but also in earning foreign exchange by way of exports of its produce. The Empowerment and Protection Act must be scrutinized so as to assure that corporations are not given a free hand to exploit the farmers.
 

History has witnessed the way corporations have treated agriculturalists forcing farmers to produce indigo instead of food crops, in a bid to satisfy their own corporate greed that abet turmoil in the lives of farmers. One should also not brush off the manner in which these laws are passed in utter disregard of the rules of parliamentary procedure. Petitions have been filed before the Supreme Court of India challenging the constitutionality of these laws. It remains to be seen whether or not they will pass the test of constitutionality.

.

Farm Bill 2020: Do Farmers Really Need These


“Agriculture is the most healthful, most useful and most noble employment of man”

- George Washington

 

 

The COVID-19 pandemic affected the world economy very badly. Every country undertook special steps to fight against the pandemic by maintaining social distancing. Additionally, restrictions on travel and trade were laid down in most of the countries across the world to limit the spread of the virus. All these measures against the pandemic vastly affected the major economic sectors such as agriculture. 

 

Agriculture is one of the most important economic sectors patronizing food security and human development. The Indian farmers were also amongst the worst-hit by the COVID-19 pandemic. Hence, the government introduced the farm bills in order to enable easy access to farmers to markets across the nation and thus increase their income through private investments. It aims to prevent farmers from plummeting into debts due to traditional intermediaries. 

 

On 27th September 2020, India’s President Ram Nath Kovind gave his assent to the three most controversial farm bills. The farm bills were passed in the Rajya Sabha in a way you cannot even guess. The opposition claimed that the government lacked the requisite numbers and hence they flouted many rules and thus they wanted the bills to be sent to a select committee. However, this resolution of the opposition was not considered and the bills were passed by voice vote amid the vociferous opposition protests. 

 

The three bills are as follows:

 

(i)   The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill 2020;

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

(iii) The Essential Commodities (Amendment) Bill 2020. 

 

Till date, the farmers used to sell out their agricultural produce to the Agricultural Produce Market Committee which is governed by the respective state governments. A farmer could sell his agricultural produce to the specific mandi which has been allotted to him in his region. Similarly, a trader could trade only in the specific mandi for which he holds the license. Farmers sell their produce through auction at the Minimum Selling Price (MSP). The MSP is restricted only to the items contained in the Essential Commodities Act. The Price Discovery method is used to determine the prices of other commodities on the basis of market demand and supply. Further there are middlemen involved who purchase the agricultural produce from the farmers and further sell it to the local mandi.

 

These farm bills aim to bestow upon the farmers the liberty to trade across states and emancipate them to be traders of their own product and master the process thus putting an end to the mandi system. Its raison d'être is to create an ecosystem wherein the farmers and traders have the liberty to trade their agricultural produce and carryout inter and intrastate trade outside the market area specified in the APMC Act without any impediment. The current changes will lower the powers of APMC or maybe even kill all of it. 

 

Now the flip side of these bills is that the person in question is a farmer who might not possess the art of bargaining before industrial giants. These private players will enter the markets and exploit the farmers furthermore worsening their condition. Besides, it would be highly irrational to postulate that the farmers in Punjab who are habituated to the traditional mandi system would sell their products to someone in Maharashtra given the fact that India is still yammering with connectivity issues and the cost of transit might exceed the one paid to APMC’s.

 

Besides, one of the reasons which gave an impetus to protests throughout the country is for the unconstitutional manner in which the bills were passed and ideally it is the state governments which regulates agricultural subjects. The Parliament may rationalize the passage of these bills by promulgating that they were enacted in exercise of its powers to legislate under Entry 33 in List III as entailed in the Seventh Schedule of the Constitution.

 

The Seventh Schedule of the Constitution of India consists of the Union List (List I), the State List (List II) and the Concurrent List (List III) each stipulating subjects on which the Centre and State can legislate. The States under Entry 14 in List II have the exclusive authority to legislate on agricultural subjects. Moreover, the States have the absolute authority to make laws with respect to markets under Entry 28 in List II. Whereas, under Entry 33 in List III both Parliament and State legislatures have the power to legislate in matters relating to Trade and Commerce in, and the production, supply and distribution of, foodstuffs, including edible oilseeds and oils, cattle fodder, including oilcakes and other concentrates, raw cotton, whether ginned or unginned, and cotton seed and raw jute. Albeit the fact that markets fall in the absolute legistorial competency of the State, the Parliament went ultra vires and altered the dynamics of trading farmers produce. This gambit of the Parliament infringes the basic structure of the Constitution.

 

The Empowerment and Protection Act attempts to empower the farmer by granting him the prerogative to enter into a farming agreement with any person known as ‘sponsor’. However, both the Promotion and Facilitation Act and the Empowerment and Protection Act preclude and overthrow the jurisdiction of civil courts. The individuals contracting under these laws are barred from approaching the judiciary even under a farming agreement, which is essentially governed by the principles of contract law. The dispute resolution mechanism deliberated in these acts is through a conciliatory process. In case a party is not pleased with the decision, the matter can be referred to the Sub Divisional Magistrate or the Additional Collector.

 

Conclusion

 

The Indian farmers are significant in not only feeding the world’s largest democracy, but also in earning foreign exchange by way of exports of its produce. The Empowerment and Protection Act must be scrutinized so as to assure that corporations are not given a free hand to exploit the farmers.
 

History has witnessed the way corporations have treated agriculturalists forcing farmers to produce indigo instead of food crops, in a bid to satisfy their own corporate greed that abet turmoil in the lives of farmers. One should also not brush off the manner in which these laws are passed in utter disregard of the rules of parliamentary procedure. Petitions have been filed before the Supreme Court of India challenging the constitutionality of these laws. It remains to be seen whether or not they will pass the test of constitutionality.

.