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Everything you need to know about the Farm Laws

Ishita Jha

10th October 2020

Two weeks back, the president of India gave his consent to three homestead bills: the Farmer's Produce Exchange and Trade (Advancement and Help) Bill, 2020 (FPTC), the Farmer's (Strengthening and Security) Understanding of Value Confirmation and Homestead Administrations Bill, 2020 (FAPAFS), and the Basic Items (Correction) Bill, 2020, according to PRS India.

A farmer looking at his produce (Source: The Financial Express)

Principal opposition is coming from INC and the organisations backed by it, although these reforms were mentioned in the INC's 2019 election manifesto as well. The farmers used to barely get anything in exchange for their products since it was a monopoly buyer situation. Simultaneously, the consumer faced high prices for essential items. The only people who made money and benefitted from this were the middlemen, controlled and backed by politicians.

The following is a brief overview of the three bills and what they entail.

The Farmers Produce Exchange and Commerce(Promotion and Help) Bill, 2020:

Through this, farmers can go into 'contract concurrences' with anybody, including an organisation, and sell them their products for a set timeframe as per the agreement. Organisations would now be able to have contracts with farmers for purchasing produce. Farmers, however, can withdraw anytime, even after signing the contract, without penalties if no advance is taken. No interest shall be charged even when the passage is taken, and the farmers can return the advance and then withdraw. Sale, mortgage or lease of farmers land is strictly prohibited. The contract shall be for specified products and that too for a limited time as per the farmer's choice. They can set the cost for the product, the norms and characteristics, and different legalities already. Therefore, higher options to sell or buy and there will be no intermediaries so; the farmers will get a better bargain. The competition among buyers will also increase, which will enhance farmers income.

The farmer (Strengthening and Security) Understanding of Value Confirmation and Homestead Administrations Bill, 2020: State governments can set up APMC (Horticulture Produce Market Advisory group), which thus set up business sectors or ‘mandis’ – in a few spots in the state. It is here that farmers bring their produce, and discount and retail merchants come to purchase the product through sales. The APMCs the nation over guarantee that farmers get a reasonable cost for their produce, and aren't compelled to make a misery deal. The APMCs direct the purchasers and commission operators by giving them licenses, imposing business sector expenses and any such charges are managed. Presently, the new Commercial centre law says that farmers can sell their produce anyplace – and not merely in the APMC endorsed commercial centre. What's more, they can trade between state or intra-state or even on the web.

The essential commodities (Change) Bill, 2020: The Fundamental Items Act was first acquired quite a while back – in 1955. The Demonstration fundamentally controls the creation, storage and dispersion of specific necessary items. So, if a thing goes under this demonstration – for example, a food thing, or an effective medication – at that point organisations and general stores and so on can't accumulate these things when there is a deficiency, and they can't misleadingly expand the cost. Private investment in the agricultural sector and supply chains will speed up. Better storage facilities and infrastructure will be provided.

Under the current APMC Acts, all Agri produce was obtained through mandis to which farmers moved their produce. At first, intended to ensure farmers, these mandis changed into neighbourhood syndications. Direct value revelation through sales was supplanted by plot and value fixing. In this way, the instruments intended to secure farmers ended up seriously hurting them. Lease looking for conduct was standard, as commission specialists (arathiyas) and go-betweens had a significant impact by being the two purchasers of products and suppliers of casual credit. Raising the minimum support price was not the option. MSP has always been an administrative mechanism and never legislative. This gives the flexibility to increase it when needed. MSP will anyway be ensured in private transactions as private trades will be above the rate of MSP. Farmers will only make private transactions when they get better value for their products outside.

According to Financial Express, specialists have called attention to the fact that a solitary 6% of all farmers profited by open obtainment at MSP. In any case, this has driven others to infer that 94% of the farmers must sell their produce in the free market. Despite what might be expected, these great farmers certainly didn't have that advantage. Creating the infrastructure for assortment near the homestead door made little exertion. Nor were there enough motivators for ventures over the cold chain and the food preparing industry, as strategy effectively debilitated collection of produce and bartering intensity of farmers. The outcome is that we recycle under 10% of our food creation and lose roughly Rs 90,000 crore yearly because of wastage of produce, inferable from a divided cold chain.

The prime minister announced Aatmanirbhar Bharat Abhiyan on May 12, 2020, for the country. The plan focuses on promoting Indian local products and making India a self-reliant nation. The scheme shall ensure a financial boost to the farmers, and the other beneficiaries will include startups, Self-help groups (SHGs), farmers produce organisations (FPOs), multipurpose cooperative societies, agriculture entrepreneurs, etc.

According to Statista, agriculture in India accounts for only 16% of the GDP. It employs about 59% of India’s total workforce, but almost a third of the national agricultural product gets lost from spoilage. A sector which provides employment opportunities for more than half of the country's population was devoid of any private investment for seventy years. India ranks first in the number of organic farmers; our major organic exports include medicinal plants, sesame, flax seeds, tea, soybean, rice and pulses. Indian processed foods and horticultural, agricultural products are exported to more than a hundred countries, ranking second in the production of vegetables, fruits, sugarcane, groundnuts and cotton.

Aiming towards One nation- One market and to make the farming sector self-reliant, the organic e-commerce platforms like www.jaivikkheti.in and ENAM are directly linking farmers with bulk as well as retail buyers, without any intermediaries which reduce transaction costs. Farmer produce organisations will be connecting markets and will ensure that the primary producers can avail the benefit of economies of scale.

Farmers will have the option to go into contract farming with food processors to develop processable assortments and sell them at guaranteed costs. They will not be confined to one location to sell their products and can go into concurrences with farm specialist co-ops. This will give the 'Cultivating as a Help' (FaaS) an immense boost. A few new agri-tech businesses work in this space, using techniques like computer-based intelligence to give crop knowledge just as evaluation and examine produce. Empowering mechanical mediations in Indian farming can change this segment, in light of the trustworthy establishments these changes empower. The three farm bills are indeed a game-changer for the agricultural sector.

News Sources: IBEF, Nabard, Enam, Financial Express, PRS India

Edited by Sana Khanam


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