Farm Law – Is it a boon or bane

Author: Mohamed Sultan Maricar, Crescent School of Law

ABSTRACT

The 3 major agricultural reforms Laws are the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, Essential Commodities (Amendment) Act. The Bill has its own pros and cons. In one aspect, in the eyes of the government, it is beneficial for the farmers. But, in the eyes of farmers, this act looks like a devil. Farmers are much satisfied to work with the known persons i.e, the present APMC system, instead of unknown persons. The farmers are not literate enough to deal with big corporates. So, even though these Acts widens the market for farmers, it won’t reach or benefit the desired farmers.

Keywords – Farm bill, Farmers protest, FPTC, APMC, E-choupal, e-NAM,

Present Practice

In order to go further, we must be aware of the present system in the sale of agricultural goods. There are certain goods that are classified as Essential commodities. These commodities can’t be stored more than a certain limit as prescribed in the Essential Commodities Act. Then, farmers can sell their produce through APMC (Agricultural Produce Market Committee) which is under the State government. The farmers can only sell their agricultural produce at the market yards of APMC. The APMC was introduced to safeguard the farmers from exploitation by creditors and other intermediaries. It is well established and farmers are much aware of it. Even though there are certain irregularities with the middlemen, this system has been accepted widely by the farmers. As they are attaining profits with the present practise itself.

What is the expectation of this amendment Act?

The amendment provides for making agreements between a farmer and a buyer prior to the production of the farm produce itself. This Act provides for sale Intrastate and Interstate even outside of the APMC. These essential commodities have been relaxed for certain goods. The Act allows the farmers to trade in outside trade areas. This removed the state barriers and enhanced the e-commerce platforms. As per the Act, the State Governments are prohibited from levying any market fee or cess on farmers, traders and electronic trading platforms for trading farmers’ produce in an ‘outside trade area’. This would reduce the middlemen charges in between the farmers and buyers. Many agro-based industries will be formed and will lead to an increase in employment. The essential commodities have been relaxed, which would attract private investments in these commodities as these commodities were under the ambit of the Essential Commodities Act, the private investors were hesitant to invest in these products as these commodities were under the ambit of the Essential Commodities Act. But, now, the situation has changed, private investors would be able to invest without any hesitancy in these products and the export opportunities also will increase, which would help in the growth of the Indian Economy.

The reality of these farm laws

As we all know, the law might be quite good in papers but it can’t be in reality. The best example for this can be the E-choupal setup by the ITC in India in 2015. e-Choupal is an initiative of ITC Limited to link directly with rural farmers through the internet for procurement of agricultural and aquaculture products. It was functioning well at the beginning. But it indicated a  monopolistic control over the local agriculture through the use of e-choupal. The DNA profile of the farmers were acquired during the registration of e-Choupals which has led the ITC to determine the buying behaviour very closely. The farmers won’t be aware of their rights and they are well educated to enforce their rights too. This would be the best example for what would happen if the present system of practice is changed to a scenario like e-choupal.

Then In 2016, e-NAM ( e- National agricultural Market) was created by the Government. Its main objective was to connect all the farmers and create a uniformed national market for agricultural produce. The NAM Portal provides a single-window service for all APMC related information and service. Even on May 15, 2020, there was information that the government has joined around 1000 markets in the eNAM. After this Act, the APMCs would be of no use. So, this would affect the e-NAM also. How will it be resolved?APMC, Mandi, Middlemen are known devils to the farmers. They would be able to negotiate with them and in case of problems, it can be solved within the place through the local people or Local panchayats. As they are practised with it for a long time, they would be aware of all the pros and cons of it. But, the Corporate are like an unknown devil for the farmers, as they are unaware of the practices of the corporate and they won’t be able to resolve issues or fight with big corporates in case of problems. So, fighting with a known one is much better than fighting with an unknown person.

The Ministers have given assurance for the Minimum Support Price (MSP) but there is no such provision in the Act. As we all know, a law written is more powerful than the words of the Ministers. If they are ready to give assurance for Minimum support price, why are they not able to place in the Act? This clearly indicates that these assurances are given just for word sake.

In General, The bills would be sent to a committee for recommendations before it’s implementation. But, in the present case, there is no consultation with the state government and no reference was made to the committee in this bill. This bill has major changes in the farm field, it must be considered with the state government and various experts before it’s implementation. But, it was not made out. What’s the need for such a fast implementation of such a bill?

In one way, opening the markets for farmers would help them getting higher prices for their products as the state barriers have been removed. But, almost 86% of the farmers are small farmers in India. They won’t be able to negotiate with big companies or unknown buyers to get the best price and there is a great possibility of being exploited by the big corporations. And if there is any issue between the farmer and the buyer in future, whether they will be able to move for court proceedings? Is it easier for a small farmer from a rural area to get justice from a big company through the court proceeding? The answer would not be positive, as they won’t be able to compete or fight with big corporates.        

This Law would help the corporate sector to enter the farm field indirectly. And at last, farmers may also be exploited by corporate personnels. Even in the case of open markets, farmers won’t be able to contact the buyers directly as most of them are uneducated and small farmers. They would be pushed to contact some middlemen for this purpose. So, the concept of middlemen will not be eradicated as they serve as a bridge between them. So, still, the involvement of middlemen will be present in order to facilitate the deals. Enhancing the market for the farmer is good, but whether the farmers are able to access all those? Whether farmers will be able to negotiate with large corporations? These all are major questions that need to be answered. In order to make this much efficient and to function for a long term, first, farmers need to be made aware of all the e- facilities. So, measures must be taken to create awareness among the farmers first.

In the beginning, the farmers would be able to acquire high profits from corporates, but will it extend for the long term?  Once they capture the market or make it a monopolistic market, then they would be able to decide the prices and it would place the farmers in much more complication. Long term planning must be preferred more than the short term plans, as long term plans help in survival and efficiency of the economy as well as the farmers. As there are huge debates between the literate people regarding the impact of farm Law, Think about farmers for a minute. Whether they’ll be able to overcome all the difficulties and be successful with all these Laws?

The commodities that have been deregulated are food items, including cereals, pulses, potato, onion, edible oilseeds, and oils. But this is not standard, as the restriction can be made in future. As, one of the best examples is the recent ban on the export of onions due to its high pricing. So, even though these commodities have been delisted from the Essential Commodities Act, there is no assurance that the government would not uplift it in future. So, this will not attract any private investments in these commodities.

In order to decide this, all the positive impacts and negative impacts must be weighed, if the positive side is high, then these laws can be appreciated. But, here, the actual weightage is high for the negative side. So, this must be discouraged. As, each and every law is for the benefit of the people, it must have a positive impact more than that of the negative impact as per the natural law of justice.

Conclusion

So, it can be concluded that the law can be seen as good when it is seen in papers, but it’s real impact can be seen only in its implication. Even Though the law appears to be good in many ways. It has many disadvantages within it in the implication. As, the object here is for the betterment of the farmers but farmers are even protesting against it. So, no one will protest against a policy which is beneficial for them. So, the voice of the farmers should be heard and necessary changes must be made.

1 thought on “Farm Law – Is it a boon or bane

  1. Great, article 👏👏.

    Like

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