Farm bills passed by Parliament are a paradigm shift in the government’s policy for farmers’ welfare, paving way for increasing their income up to at least one and a half times till 2022 as promised by the government before the Lok Sabha elections.
Let us discuss how these Acts are beneficial or otherwise to farmers?
Act on Agriculture Marketing-Farmer’s Produce Trade and Commerce (Promotion and Facilities)Act, 2020
It provides an environment where farmers can sell their farm produce outside the registered ‘mandis’ in states under APMC. Before the new Act was passed and implemented, the farmers were bound to sell their produce at registered mandis under the APMC Act where middlemen ‘Aaratiyas’ were fixing the price of the produce. They along with other several intermediaries were charging their commission and other miscellaneous charges from the farmers.
The farmers had to pay the Mandi Fee too. They were compelled to sell their produce through these middlemen at their convenience because if the rates offered did not suit to sell, then they had to take their produce back home after having spent a huge cost on transportation and labour. Small and marginal farmers, who constitute almost 86% of the agri-population, don’t have enough resources at their disposal to bear such expenses, including that to be spent on warehouses/cold storages.
Even then if they opt to sell at a later date, then again they have to spend on transportation to mandis and have to go through the same process as mentioned before.
Farmers are now at liberty to sell their produce anywhere in the country, including at the registered mandis which already exist under APMC Act, in different states, at the competitive best price available elsewhere. Now, there is no compulsion for them to sell their produce at the registered mandis only where the price of the produce is fixed by the middlemen.
Few state governments and middlemen are opposing this act because they will lose the Mandi fees and middlemen their golden share of commission from farmers directly and indirectly in fixing the price of produce.
Contract Farming Act: The farmers (Empowerment and Protection) Agreement of Price Assurance and Farm services Act, 2020
This Act allows the agribusiness companies, processors, whole sellers, exporters buying the produce from farmers at a pre-agreed price.
The advantage of this Act is that small and marginal farmers who don’t have sufficient infrastructure, machineries, modern technology and inputs will be able to raise the crop with the support of such companies. With the use of such modern resources the crop yield is bound to increase. The farmers will get high yields and thus high assured return at the prefixed price irrespective of the fear of price fall at the time of harvest, which normally happens for perishable commodities like onion, tomato, potato, other vegetables and fruit crops when farmers don’t get even the minimum of seed cost involved and compel to throw the produce on road.
The contract farming has been in the practice in the country for long time in almost all the states. All major seed-producing companies and those dealing with oil seeds and cash crops are largely dependent on contract farming but such companies were not having any legal binding on themselves. Now with the Act, they would have to undergo an agreement with the farmers on various terms and conditions, including providing technology and inputs to farmers and also they will have to pay the pre-fixed price to farmers under all circumstances at harvest.
As part of this Act, land of the farmer cannot be acquired or sold or mortgaged under any circumstances. This act would be a boon to all farmers including those marginal and small farmers to grow the crop with modern technology’s and inputs. They could sell the produce at the farm gate without spending the transportation cost up to Mandi and paying the commission and other charges.
Commodities Act – The Essential Commodities (Amendment) Act, 2020
It makes provisions to remove commodities like cereals, pulses, oilseeds, onion, and potatoes from the list of essential commodities. It will do away with the imposition of stock holding limits on such items excepting under the extraordinary situation.
This will attract private sector/FDI in farm sector as it will remove fears of interference of regulatory interference in its operation. The private sector or FDI would be exercising their best of global technology and input. So the per unit production will get a boost paving further income of the farmer.
This will also bring investment in farm structure like cold storage, ware houses and strengthening of food supply chain including cold chain reducing farm losses and improving the export. It will cause price stability both for farmers and consumers.
I am of the opinion that none of the Farm Acts are against the farmers in any way. Rather they are one of the most prominent steps to raise the farmers’ income. The reason for opposing these acts by few farmers of Punjab and Haryana might be inconsistent with the farmers’ welfare activities.
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