What are Farmers Bills all about?

In September 2020, the Indian Parliament passed 3Farmer bills namely The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill and Essential Commodities (Amendment) Bill

Post these bills, massive protests by farmers erupted all around the nation. The fire of protests is still on.

What is the current system of agriculture market?

Before moving ahead, let’s quickly understand the current form of agri market. In the current system there are 4 entities involved in the market 1) Farmers 2) Middlemen 3) Mandi 4) Buyers/businessmen

Step 1: Farmers produce the crop
Step 2: They bring it to Mandi(well regulated by Govt under the APMC Act)
Step 3: Farmers interact with (licensed)Middlemen and sell them their crops.
Step 4: Middlemen then sell it to large corporates/businessmen and etc

What are current bills about?

1: The Farmers’ Produce Trade and Commerce

This Bill mainly dissolves the barrier of Mandi & middleman for Farmers and allows the farmers to do intra and interstate trade of their crops. It means the APMC Act which regulates the Mandi is dissolved and now any farmers can sell their crops anywhere in India without any restrictions directly to large corporates and businessmen.

(Note: There is NO RESTRICTION for Farmers to sell their crops elsewhere in the current system also)

Jarvis: Awesome!! This sounds pretty cool. Now Farmers have no barriers right? They can sell it to anyone they want. No middlemen required.
Me: Yes.
Jarvis: Then why are they protesting about it?
Me: Well, let’s find out

Fears around the bill?

1. Farmers are worried to directly negotiate with big corporates who have more power than the farmers
2. ~85% of Indian farmers own <2 Hectare of lands i.e they are small farmers with the lesser capability to negotiate with corporates
3. The existence of Mandi (regulated by APMC) will be dissolved. So “private mandi” will take over the market which will be owned by corporates and NOT AT ALL REGULATED by any Act.
4. Corporates may exploit farmers in this “open system” as there is no regulation & restriction in this “free market”.
5. Will be super difficult(expensive) for small farmers to transport their crops to a different city altogether
6. State Govt would be losing tax money comes from Mandi (a source of income for states)
7. Millions of Jobs at Mandi will come down to 0. i.e Massive job losses in rural areas

2: Farmers Agreement on Price Assurance and Farm Services Bill (Contract Farming)

This Bill is mainly talking about contract farming. But what is contract farming?
As the name suggests, in the Contract Farming any corporate makes a contract/agreement with farmers to grow a certain type/quantity of crops. In return, they will pay them

But isn’t it good? The answer is “Not really”
In the current system of Mandi, Govt provides a Minimum Support Price (MSP) to farmers on 23 crops (mainly 2 crops only). So eventually farmers growing those crops have some certainty that they will be paid “something” in the end no matter how bad the situation is. And it works like an “insurance” for their crops

Post this bill, the idea of MSP will be totally dissolved. Since Govt is not regulating the new “free market” so Govt is not even “responsible” for wrongdoings by the corporates.
Tomorrow, if I produce the crop worth Rs. 100 & Corporate only gives me Rs 20 for that, no court, no tribunal would listen to my plea. A dead end or take Rs.20.

Fears around the bill?

1. MSP will be dissolved. No assurance of making any money in case no one buys the crops
2. Exploitation by large corporates

3: Essential Commodities (Amendment) Bill

This Bill proposes to allow agents to stock and hoard the food articles FREELY without any fear & restriction.
In Simple words, hoarding of Agri commodities will be made legal after this bill.
Hoarding leads to massive fluctuation and the price of the commodity to even destroying farmers’ lives on a large scale by price dropping. Similar it will massively impact end consumers (you and me) if the hoarding leads to a massive increase in the prices of crops

What are the Farmers’ demands?

1. To make MSP a legal right of farmers
2. To regulate this new “free market” owned by corporates
3. Reforms in APMC are needed. No need to dilute it fully
4. Govt investment in agriculture

Views expressed are personal
For discussion, please email me at suhail119@gmail.com