Debate on Agri Bills explained

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The Narendra Modi Government has got Parliamentary approval for two controversial bills which it says would give farmers freedom to sell their produce outside the state government-controlled mandis for better realisation of prices. However, the Opposition and some farmers’ organisation are up against arm , stating the new legislation would allow corporate trading houses establish their hold on Indian agriculture. Farmers have apprehensions that the government may eventually stop the age-old system of Minimum Support Price (MSP) , forcing them to sell their harvest at distress prices. Prime Minister Narendra Modi has said, the government would continue with the MSP and the new bills are ”watershed” moments for the Indian agriculture.

The Ministry of Agriculture and Farmers’ Welfare has shared details of the bills. The Minister incharge Narendra Singh Tomar also assured Parliament that the farmers’ interest would not be compromised and be protected. Meanwhile, there have been protests by Congress Party and farmers’ organisations , mostly in Punjab and Haryana, the two largest producing states of wheat and rice.

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

Main provisions –

  • 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 Bill also proposes an 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.

Opposition /Farmers’ doubts

  • 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

Govt Clarification

  • Procurement at Minimum Support Price will continue, farmers can sell their produce at MSP rates, the MSP for Rabi season will be announced next week
  • 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

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

Main provisions –

  • 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.

Opposition /FarmersDoubts

  • 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

Govt Clarification

  • 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.
  • 10000 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 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

Pics courtesy: APEDA

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