Every country needs financial support to maintain its expenses. Agriculture is the main source of income for the majority of Indians even today. The colonial rule was the result of this factor, that India can produce various spices like cloves, pepper, and cinnamon, etc. Along with that, the cotton produce and other produce were in great demand by different markets of the world.
But because of the continuous exploitation of farmers by the Britishers and even after the independence by the zamindari system and other traders the conditions of the farmers were not very well and their capacity to produce or sell crops got worsened. This made the government realize this problem and introduce a system according to which a farmer can sell their crops, since the majority of people at that time were involved in the primary sector as compared to the secondary and territory sector, and since the majority of people were involved in the primary sector we need to think about their financial welfare.
What is APMC (Agriculture Produce Market Committee) and why was it introduced?
The government introduced, APMC (Agriculture Produce Market Committee) system in 1950 which would help the farmers to sell their produce at a particular area called “mandi” according to their residence.
These mandies were regulated by the state government for the Agriculture produce and a Licensed Commission Agent OR Arthiyas (term used in the states of Punjab, Haryana, and Rajasthan) is appointed to help the farmers to sell their crops to the trader. This Commission agent charges a sum of 1.5- 3% on the total sale from the farmer for proving the services of polishing the crops before selling, packaging, and assorting of the crop
Since the crops were sold by the Auction method by the government, there could be chances that the prices could be exploited, so to save the farmers from the same they introduced the method of MSP (Minimum Support Price). MSP enabled the farmers to get at least a minimum amount of money for their produce, but only 22 crops were involved in the provision of MSP, the rest of the crops were sold by the method of Discovery.
In this method the price of the crops is decided by the demand and supply of that particular product, if the demand is high and supply is less then the prices would be high whereas if the demand is less and supply is more then the prices would be less.
What was the reason behind the enactment of the 3 bills if the things were going right?
The biggest reason behind making the above provisions for the farmers was to save them from exploitation, but these provisions were doing their job as decided. The APMC mandies which was decided that it will provide a place for selling their products and also can provide better price proved to be wrong because the money charged by the commission agents itself exploits the farmers because their own produce didn’t get sold on the expected prices.
Also, the state government who regulates these mandies charges tax on selling the crop, depending on the sale.
To cope with the above-mentioned problems the government introduced 3 bills which could probably solve these problems and can also improve the other factors which are involved in the agriculture process.
The 3 bills introduced were as follows:
- The Farmers produce trade and commerce (Promotion and Facilitation) Bill, 2020.
- Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services bill, 2020.
- Essential Commodities (Amendment) bill, 2020.
The 1st two bills were introduced by Mr Narendra Singh Tomar, in the Lok Sabha, whereas the 3rd bill was introduced by Mr Roasaheb Patil Danve.
But these 3 bills are not supported by the farmers and they are protesting in different states, the main protestors are from Punjab and Haryana but protesting is also done by the farmers from Bengaluru, Kerala, Tamil Nadu, and from many such parts of India.
What is 3 farms bill all about?
Bill 1- The Farmers produce trade and commerce (Promotion and Facilitation) Bill, 2020
- This bill talks about the provision to move freely by the farmers from one state to other for selling there crops, because earlier they need to sell their produce only in their respective “mandis” because of the taxation and licening process. By removing the barrier they can sell their product to that mandi were they could probably get more price of their crops. But the fun fact is this earlier also they could move freely only by doing the licening and taxation process.
- Earlier the farmers were only allowed to sell their goods/ crops in the APMC which was regulated by the state government, now according to this bill they can sell their product both in the public and private land. Now, private firms can also setuo their own mandis to do the same.
- Earlier in APMC, the lincesed men decides the price of the crops and allowed the farmers to sell their crop in the market by charging a rate of 1.5% to 3% commission on their sale.
- So, the chain goes like this Farmers-APMC-Commission agent-Traders-wholesaler-retailer-consumer. But now after this bill the farmers itself can set the price of the crop before selling the crop to the actual buyer and can eleminate the middlemem or the lincesend person who charges some commmission on the crop. This inturn will help the farmers to earn more.
- They can also sell their crop directly to the buyers (corporate buyers) who want the crop for their food industries, along with that they can also sell the crops directly to the individual buyer too.
But there is a negative face of it also, suppose if any company or individual buys crops at a lower price than the expected price then it will incur a loss for the farmer, these problems would most probably be faced by the one who has less then 2 hectors of land because large scale buying would probably overshadow the small farmers and the fact is 85% of the farmers are having a small amount of land.
Bill 2 – Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020
- This bill talk about the farmer to contract with the firm who deals in agro-product or tjose who are into exporting of agro product, to have a price according to the quantatiy decided, this will inturn help the farmers to deal in good price of the crop, but this also has a negative consequence of it.
For eg- A company provide a product to estabish it self in the market and to do the same the start proveding good offers in the starting, but gradually charges more from the customer and pay less to the farmers for their crops one of the major reasons the motive of the company is profit making.
- Secondly, because of the provision to sell the crops directly to the agro firm will result in removal of the, provision of MSP (Minimum Support Price) which in future can exploit the farmers income. Currently it is said by the officals that as if now MSP is not removed from the new bill, but the fact is if there is a contract between the 2 parties then the 3rd person cannot interfere in their contract for the prices.
So, in future even though the prices of the crops is fixed by the governmen and there is a contract made between the parties then it cannot be challenged and slowly with time the provision will have no meaning and will be removed by the law making authority.
Bill 3 – Essential Commodities (Amendment) Bill, 2020
- The provision of essential commodity was added in the bill were the central government has the power to regulate the supply of certain food products mainly cereals, pulses, potatoes, onion, edible oilseeds, and oils. These provision was added so that the central government can use this stock in war like situation or in national emergemcy.
- According to this bill, it allows a farmer to stock their product and sell it accordingly when the prices of the same crop is high, this will help the farmers to earn more profits. But this provision can be removed if there is 100% increase in retail prices of hoticulture produce and secondly if there is 50% increase in the retail price of non-perishable agro-products.
- It is also assumed by the government that it will improve the stroage facilities or technology of the product.
- But, this stocking of product will inturn can cause balck marketing which can result in unfair prices by the farmers.
We have noted that by introducing these bills, the government tried to solve the ongoing problem which was being faced by the farmers. The government clearly failed to make the farmers understand the Farm Laws. This lead to the farmers blocking highways and expressways for more than a year and causing immense loss and inconvenience to the common people. The Modi government finally gave up and rolled back the farm laws.