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| FARM ACTS 2020: IMPLICATIONS AND FARMERS' CONCERNS | | | Dr. Parveen Kumar* | 12/7/2020 9:03:11 PM |
| Agriculture is the back bone of the Indian economy being a source of livelihood for about fifty percent of population. The country is heading towards a record food grains production. Despite a record food grain production, there is something wrong with the agriculture sector in the country. The rising incidence of farm suicides, farmers' indebtness, youths leaving agriculture, lack of marketing support and dearth of post harvest facilities, low productivity and many other; all these were indicators that everything is not going well in this vital sector. The gap in the agri-income of a farmer and that of a non-agriculture worker increased from Rs. 25,398 in 1993-94 to Rs. 54,377 by 1999-2000. What happened in the next ten years, the income of a non-agriculture worker further exceeded that of a farmer by Rs 1.42 lakh. Professor Ramesh Chand, member of the NITI Aayog argues that the favourable effects of the 1991 policy reforms on the non-agriculture sector and the growing disparity between agriculture and non-agriculture incomes caught the attention of some experts and they started speaking about the need for reforms in the agriculture sector. Consequent to that, the Central government came up with new three farm laws; infact two new laws and an amendment to earlier law of 1955. These are the Farmers Produce Trade and Commerce Act (FPTC) 2020, Agreement on Price Assurance and Farm Services Act (APAFS) 2020 and the amendment to Essential Services Act called as Essential Services Amendment Act 2020. While some called these laws as the path breaking, historic, 1991 movement for Indian agriculture; some other called it as historic blunder and a corporate sell out. Farmers have expressed apprehensions regarding these laws and are up against the government demanding a complete roll back of these laws and protesting from the last few days at Delhi Haryana border.
The farmers' apprehension is regarding the Agricultural Produce Marketing Committees which they believe that the FPTC Act will render them useless once the private sector steps in. APMCs set up in the states by 1960s as a platform to provide marketing support to the farmers' infact bind the farmers to sell their produce only at these mandis. But even after fifty years of these institutions, they still lack the basic infrastructure. Studies show that due to inadequacies of the APMC markets, more than half of the marketable surplus is sold outside the mandis. Also in such mandis, the farmers were subjected to many type of fees, cess which in states like Punjab and Haryana is reported to be around 8 per cent. Such type of taxes and cess rob the farmers of their hard earned money. The new Act legalizes such transactions, which is favourable for farmers. The best part of the new FPTC Act is that it allows direct purchase from farmers at their doorstep or farm as is the case with milk procurement by AMUL in Gujarat or by Nestle in Punjab.
Infact, for the first time in the history of India post independence, farmers have got the opportunity to quote the price for their produce and farmers to acts as 'price dictators' rather than remaining mute 'price takers'. Another important aspect of agriculture in the country is the predominance of small and marginal holdings which do not have marketing support. Traditional supply chains involve six to seven transactions between the production point and end use (farm to fork). Each transaction involves cost and margin, leading to a large price spread between producers and consumers. The new act will also result in compressing the value chains and eliminating excessive intermediation. In many cases farmers will be able to sell their produce directly to consumers through their groups. Infact the real threat to the APMC mandis and their business is from excessive and unjustified charges in these markets. The new FPTC Act will only put pressure on these markets to become efficient and competitive. Discussion with mandi officials revealed that a maximum of 1.5% of the total charges, including market fee and commission, is adequate to maintain and run mandi operations.
The farmer bodies in the country have also expressed that the new acts will also do away with the Minimum Support Price (MSP) regime in the country. The government on the other hand has repeatedly informed the farmer bodies of its intentions to carry on with the MSP. Agriculture minister has also expressed his desire to give it in writing, if the farmers desire to it. Infact the government has already shown its commitment towards carrying out with MSP by its actions. During the last six years, the government has given major pushes to the MSP regime by announcing an MSP which is 1.5 times the cost of cultivation of different crops. Also much-needed procurement for ensuring MSP has been also expanded to some other crops.
Coming to act on Contract farming, the APAFS 2020 Act, this type of farming has been practice in India from quiet some time but on a limited scale. Farmers' apprehension is that on the name of contract, the big corporate house will take over the control of the land of the farmers or will lure them with huge money to sell their fertile lands. The fact is that the in the new Act, the agreement will only for the produce of the farmer; and in no case the land will be involved. The role of the sponsor is restricted to buying the produce at the price agreed in advance and supplying inputs and services. The new Act has no provision for leasing out land by the farmers in any manner to the sponsor or firm. As per the Act, the sponsor is prohibited from acquiring ownership rights or making permanent modifications on farmers' lands or premises. Therefore, apprehensions like Corporates usurping the lands of the farmers' or forcibly taking their assets by manipulating the agreement are totally uncalled for.
The dispute settlement has also been made much easier and to the favour of farming community. The agreement provides for dispute resolution through the SDM as the appellate authority. No action for any recovery of dues against farmers shall be initiated against land of the farmers. In case the sponsor fails to pay the farmer, there is a provision for penalty extending to one and a half times the amount owed. If a farmer reneges into the agreement, the recovery shall not exceed the actual cost incurred by the sponsor on account of any advance payment or cost of input supplied by him. State governments have been given the power to make rules for carrying out provisions of the Act, such as registration of a farming agreement.
Regarding the amendment to Essential Commodities Act, the 1955 act has been modified and the amended act now says that the Central government may regulate the supply of commodities like cereals, pulses, potato, onion, edible oil seeds and oils only under extraordinary circumstances such as war, famine, extraordinary price rise and natural calamities. The new amended act gives the freedom to producers to stock their commodities to sell it when the prices are more remunerative. The modification lays down a transparent criterion on imposing or regulating stock limit, which is 100% increase in retail price of horticulture produce or 50% increase in retail price of non-perishable agri-food stuffs over the price prevailing in the preceding 12 months or average price of last five years, whichever is lower. Farmers' apprehension is that it will give a free hand to stockiest and black marketers. This act also in no way dilutes the power of the govt. to intervene in the market for price control. Government has also shown its commitment towards this by imposing stock limit on onions on 23 October 2020, i.e. after the enactment of the modification in the Essential Commodities Act. Thus, the criticism that a free hand has been given to stockiest and market manipulators is totally uncalled for. The central as well as respective state governments need to sit with them, listen to them, takes care of their genuine concerns, removes their apprehension and fear related to farm acts. |
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