India’s Three New Agricultural Ordinances

India’s Three New Agricultural Ordinances - Historic and Liberal or another pathway to exploitation of farmers?


On 3rd June, 2020, three new ordinances on agriculture were approved in the cabinet meeting which came into immediate effect on 5th June, 2020, namely — Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance; Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance; and the Essential Commodities (Amendment) Ordinance.

Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020

As per the GOI, this ordinance has been introduced to minimise the role of the Agricultural Produce Market Committee (APMC) markets, created by state governments to regulate inter and intra-state trades, and instead, give the farmers freedom to trade anywhere outside the established APMC market yards.

Issues - The defects in the APMCs, such as lack of infrastructure, exploitation of poor farmers, malpractices of trades, etc., have always been in discussion and on basis of them, it seemed to the Central Government that replacing the system of buyer purchasing farmers’ produce from regulated markets with freedom to purchase from anywhere outside these markets will solve the problem, however, the same is not true. Many small-scale farmers depend on this system. Their voice will be ignored in the noise of big companies and well-settled farmers.

Moreover, the already-existing problem of not being able to determine fair prices of crops due to government intervention cannot be done away with contract farming. There is a huge possibility that a huge proportion of farmers will continue being exploited under the new system as well. Doing away with the APMCs will also cause the states to lose vital revenue and as many government job posts of these committees will be extinguished, it will further create more unemployment.

Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance

This ordinance mainly deals with contract farming. The provisions of this ordinance will override all state APMC laws. Further, it also provides from exemption from all existing state laws, which regulated sale and purchase of the farming produce. For dispute settlement, a provision for settlement by conciliation has been provided.

Issues - Giving a legal sanction to contract farming gives a direct license to corporate companies to enter into the field of agriculture. This might flourish the agriculture sector but at the same time, exploit the farmers. The farmers will have to depend on the big corporate companies for everything, from seeds and fertilisers to selling these crops. Contractual procedures are long and the big companies can in no way focus on each farmer as a priority, whereas farmers, at times, require money in hand. Since most of the farmers of India are not very educated and aware, will these big corporate companies go door to door to contract with the farmers, especially the poor ones who do not have necessary resources? Who will be responsible to ensure that these farmers are not being exploited? Moreover, based on the already-rising prices of everything in India, input cost will be more and hence, the farmers will require more capital. Furthermore, since corporate companies solely focus on profit-making, the wellbeing of these farmers will be ignored.

The Essential Commodities(Amendment) Ordinance, 2020

The original agriculture laws were enacted with the problem of food scarcity in mind and have proven to be extremely helpful to India for building food stocks. As per the June 2020 report of the Food Corporation of India - 832.69 Lakh tonnes of rice and wheat were calculated in stock. However, this amendment might protect the prices of the crops from falling, but also might lead to the problem of over-storing and black marketing of food. Only stockists and traders will benefit from it.

Other Issues

It has been argued that none of the Farmers Welfare Organisations that actively work in this field were consulted before issuing these ordinances, and many of them are blatantly against them. In fact, none of the states had a say in them. It is also being seen as a Constitutional overreach by some political leaders since it threatens the federal structure of the Constitution. Ordinance-making power is subject to judicial review and there is a strong possibility that the constitutional validity of these Ordinances might be challenged.

There is no debate on the point that the already-existing laws that governed the agriculture sector were outdated and required a review. However, the urgency to pass these laws through the mode of ordinances, without waiting for Parliament to resume in matter of a few months is still unclear. The argument in this regard that so was necessary to deal with the pandemic is baseless as nothing in these ordinances refer, either directly or indirectly to the COVID-related issues.


 It is pertinent to note that in order to become an Act, these Ordinances will have to be approved by the Parliament within 6 weeks from the date of the first session, after the house reassembles. However, on studying these ordinances with its practical aspects as per present-day conditions, it can be concluded that these reforms do not help the farmer-class in any way, as the problems faced by them in the previous system are still persistent in the new system. However, it might help with increasing productivity. But yet, these reforms are more beneficial to the Corporate sector than to the farmer-class.







Authored by- Harnoordeep Kaur

College - Rayat College of Law, Ropar, Punjab

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