Punjab farmers lead protests over farm laws; fear losing MSP

Thousands of farmers from Punjab, joined by farmers of Haryana and western Uttar Pradesh are protesting against new farm laws, contending fiercely that these Central Acts would imperil their livelihood. The Narendra Modi Government counters these concerns, stating that permitting private sector firms to procure agri produce outside the Mandi system would help farmers raise their income. The protesting farmers do not agree and fear that deep-pocketed private players would distort prices and lead to dismantling of the Minimum Support Price , which at least , has been of great help at least in the procurement of two main crops of wheat and rice (paddy).

Why Punjab farmers are at the forefront of agitation?

Because they have the maximum stake in continuance of the MSP, which is treated as a benchmark in agri produce, particularly for wheat and paddy? Being an agrarian state, contributing maximum to the country’s foodgrains, Punjab farmers consider the MSP as the lifeline of their household income. Of 31 million total paddy procured in the ongoing procurement season for Khariff upto November 26,2020, Punjab alone accounted for over 20 million tonnes, or 65.24 per cent of the total procurement by the government agencies.

If Govt is continuing with MSP with increased quantity, why these protests?

Yes, this year (upto November 26), for instance the paddy procurement is 19 per cent more than the previous season, with the government making total payment of Rs 58,644 crore. But somehow, a livelihood fear has been ingrained in the mind of agitating farmers that with entry of private players, the assured price for their produce would not continue. They insist that let private players be allowed only with a provisio in the law that they would not be permitted to procure below the MSP. That is the sticking point ! This year, the MSP for paddy (common variety) is Rs 1868 per quintal.

Features of new farm laws, as shared by Ministry of Agriculture and Farmers’ Welfare

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.

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 (Essentially permitting contract farming)

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 /Farmers‘ Doubts

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

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