Farm Bills - Good or Bad ?
Post pandemic the most sought-after issue in India, is the Farm bill (The Indian agriculture acts of 2020, often referred to as the Farm Bills). When the country is still struggling to find its way out of Covid-19 and looking for mass vaccination at a much higher pace, some of the most highlighted personalities are coming forward to speak either for or against the bill. Farmers protesting against this bill have now completed 100 days but Central govt. and protesting farmer unions are yet to meet midway to resolve this issue. We tried to understand what is actually there in the bill which is causing so much buzz that even international stars like Rihana are also getting into it without even having any proper ground-level knowledge about our country.
- What's the story?
The Indian Agriculture acts of 2020, often referred to as Farm Bills are three acts initiated by the Parliament of India in September 2020 which was heavily protested by a large group of farmers from the states of Punjab, Hariyana, and the nearby regions. Due to the massive protest in January 2021 Supreme court stayed the implementation of the farm laws and appointed a committee to look into farmer grievances related to the farm laws.
- The objective of the bills?
large retailers for farm services and sale of future farming produce at a mutually
agreed remunerative price framework in a fair and transparent manner and for matters connected therewith or incidental thereto."
- What's in the bill?
The key provisions of new farm laws are intended to help small and marginal farmers (86% of total farmers) who don’t have the means to either bargain for their produce to get a better price or invest in technology to improve the productivity of farms. The Act on Agri market allows farmers to sell their produce outside APMC ‘mandis’ to whoever they want. Anyone can buy their produce even at their farm gates. Though ‘commission agents’ of the ‘mandis’ and states could lose 'commissions' and 'mandi fees' respectively (the main reasons for the current protests), farmers will get better prices through competition and cost-cutting on transportation. The law on contract farming will, on the other hand, allow farmers to enter into a contract with agri-business firms or large retailers on pre-agreed prices of their produce. This will help small and marginal farmers as the legislation will transfer the risk of market unpredictability from the farmer to the sponsor. The third law seeks to remove commodities like cereals, pulses, oilseeds, edible oils, onions, and potatoes from the list of essential commodities. This provision will attract private sector/foreign direct investment into the agriculture sector.
- Farmers Concern?
The biggest fear among farmers is of losing the MSP i.e. minimum price paid by govt. to purchase their produce which impacts heavily on their earnings and acts as a key price support for the agri produces. They are demanding a legal assurance from the government that the MSP system will remain intact.
- Our take on this?
While going by the farm laws we found it very optimistic for farmers as it opens up the agriculture industry for private and international players to invest capital technology to grow this industry at the desired pace. If implemented successfully this will definitely increase farmers' earnings by removing middlemen and optimizing operational and transport costs. Though there remain concerns of regulating the food prices as there are huge chances of the formation of private player cartels to inflate prices. As government holds the right to regulate prices and force players to sell out their inventory in time of crisis or high inflation this law deserves its fair chances. We were surprised to know that in December 2020 government agreed to provide written assurance on the continuation of MSP but still failed to reach an agreement with the protesting farmers association which raises a serious question if they are actually worried about the income of farmers or the mandis and bicholias !!
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