The beginning of Agriculture can be traced back to more than 10,000 years
ago. With the passing years, agriculture played avital role in the lives of the people,
as in India almost two-thirds of the employed class, depends upon farming as the
only means of livelihood. The Agricultural sector provides approximately 52 percent
of the total number of jobs available in India and contributes around18.1percent to
the GDP. Recently on17th September, 2020 Rajya Sabha passed two contentious
farm bills amid uproar and protests by the opposition and farmers. The two
agricultural reform bills-The Farmers’ Produce Trade and Commerce(Promotion and
FacilitationBill,2020) and The Farmers(Empowerment and Protection) Agreement of
Price Assurance and Farm ServicesBill,2020 were cleared by voice vote in
Parliament. Rajya Sabha also passed the Essential Commodities(Amendment) Bill
2020 with provisions to remove commodities like cereals, pulses, oilseeds, edible
oils, onion and potatoes from the list of essential commodities. These Bills received
President Ram Nath Kovind’s assent turning them into laws. This Article ‘New
Agriculture Bill 2020’s hall focus as to why this Bill was passed and what are the
main objectives and purpose of these three Acts. It shall further discuss why the
farmers protested against the passing of this Bill and how the Indian Government
has clarified the lingering fear and doubts of the marginal farmers.
Keywords: Agriculture, Bill, Commodities, Farmer, Trade, Commerce, Essential,
voice vote, Facilitation.
The year 2020 shall be preserved as a watershed moment in the history of
Indian Agriculture as the Parliament was successful in passing the agrarian reform
Bills, although a lot of protests were triggered by the farmers of Haryana and Punjab.
The main objective behind the passing of the ‘New Agriculture Bill 2020’ is to liberate
the farmers from the exploitation of middlemen and as these farmers were bound
and bullied by Arathiyas since decades, this new set of Bills would pave away
through which the farmers can sell their produce directly tot he buyers without
interference of any middle men and it would also facilitate inter-state and intra-state trade.
The Central Government Ordinances was passed on June5, 2020 and
collectively seek to (i)facilitate barrier-free trade off armers’ produce outside the
markets notified under the various state APMC laws,(ii) define a frame work for
contract farming, and (iii)impose stock limits on agricultural produce only if there is
as harp increase in retail prices. The three ordinances together aim to increase
opportunities for farmers to enter long term sale contracts, increase availability of
buyers, and permit buyers to purchase farm produce in bulk
THE FARMERS’ PRODUCE TRADE AND COMMERCE(PPROMOTION AND
The primary objective of this Act is to facilitate and promote selling,
marketing, distribution and promotion of the agricultural products of the farmers.
Although initially the main purpose of Agriculture Produce Marketing Committee
(APMC) was to promote marketing and selling, trade and commerce in the field of
agriculture but it failed to do so because of some inherent problems in some APMC.
Under the existing APMC Acts, all agri produce was procured through ‘Mandis’ to
which farmers transported their produce. Although these m and is were initially meant
to protect farmers but gradually it transformed into local monopolies. Transparent
price discovery through auctions was replaced by collusion and price fixing.
Therefore, the mechanisms designed to protect farmers ended up severely harming
them. Rent seeking behaviour was common, as commission agents, known as
arathiyas, and middle men commanded substantial influence, through being both
buyers of produce and providers of informal credit. Keeping that in mind a lot of
reforms were made in APMC but they did not work out well. So the Government
wanted to find an alternate solution which is far better than the APMC and hence this
Act was enacted with the aim of liberating the farmers from the archaic laws of the
past and giving them the liberty or freedom of choice of sale and purchase of Agri-
produce.The Farmers can sell his produce anywhere now. The buyers can buy from
any farmer he wants. Now it is not mandatory to go to the APMC, Mandi and sell the
agricultural produce but the Government also clarified that APMC, Mandis will not be
closed down. The farmers now have two options to sell their produce, either to go to
the Man dior enter into contract farming with a company or promote his product through inter-state or intra-state trade and commerce out side the markets under
state agricultural produce–marketing legislations. The farmers will not be charged
any market fees or levy for sale of their produce outside APMC areas. Further
they do not have to bear any transportation costs. The Bill also proposes an
electronic trading in transition platform for ensuring seam less trade electronically. In
addition to mandis, farmers will have the freedom to do trading at farm gate, cold
storage, warehouse, processing units etc. Farmers will be able to engage indirect
marketing there bye liminating intermediaries.
Now the questionarises as to why an out roar of protests by the farmers of
Haryana and Punjab broke out. The farmers and specially the intermediaries or
middlemen, arathiyas felt that the new agrarian reform bill would completely
eliminate the functioning of mandis and APMC as are sult of which it might
adversely affect their livelihood. However, this new Bill has given the farmers options
to sell their produce at other places in addition to Mandis Another fear was wille-
nam survive or will it be replaced by some thing else. The Government has clarified
that e-nam will continue to exist and along with it various other electronic platform
too will function so that e-nam also does not become another monopolised platform.
THE FARMERS (EMPOWERMENT AND PROTECTION)AGREEMENT OF
PRICE ASSURANCE AND FARM SERVICES BILL, 2020-
The Farmers Agreement Ordinance creates a frame work for contract farming
through an agreement between a farmer and a buyer prior to the production or
rearing of any farm produce.
It will transfer the risk of market unpredictability from the farmer to the
sponsor. It will also enable the farmers to access modern technology, better seed
and other inputs-the company invests in farming. It will reduce cost of marketing and
improve in come off armers. This Bill states that the price off arming produce should
be mentioned in the agreement. For prices subjected to variation, a guaranteed price
for any additional amount above the guaranteed price must be specified in the
agreement. Further, the process of price determination must be mentioned in the
In India Contract Farming has been adopted from U.S. But it is not a very rosy picture in the US because the companies are able to arm twist the farmers by telling
them that they require a particular quality of potatoes, but note very potato can be of
the same quality and size and in order to ensure that every potato is of the same size
they end up using heavy pesticide, fertilizer which are often bad for the soil. Even if
they are able to produce that, the company knows that the farmer is completely
dependent on the company for its sales and therefore they start rejecting their
produce. They become very picky and choosy, so that they cant wist the farmer and
reduce the price. Either they have to sell the produce at a particular price fixed by the
company or the farmers do not sell it at all. The farmers have to consent as they
have no option left and agree. This is the way the company often exploits the
farmers in the U.S. as well. This is the main problem or thre at that the farmers fear to
However, it provides for a three-level dispute settlement mechanism; the
conciliation board, Sub-Divisional Magistrate and Appellate Authority. A farming
agreement must provide for a conciliation board as well as a conciliation process for
settlement of disputes. The Board should have a fair and balanced representation of
parties to the agreement .At first, all disputes must be referred to the board for
resolution. If the disputes remain unresolved by the Board after thirty days, parties
may approach the Sub-divisional Magistrate for Resolution. Parties will have a right
to appeal to an Appellate Authority(presided by collector or additional collector)
against decisions of the Magistrate. Both the Magistrate and Appellate Authority will
be required to dispose of a dispute within thirty days from the receipt of application.
The Magistrate or the Appellate Authority may impose certain penalties on the party
contravening the agreement. However, no action can be taken against the
agricultural land of farmer for recovery of any dues.
Regarding the protests for this Bill, the Farmers had doubts that farmers will
not be able to determine prices under contract farming, small farmers will not be
able to do contract farming, problem might arise to transfer the goods to a desired
locality and in case of dispute only large scale companies will have advantage. The
Government however clarified , that farmers will have full power to determine prices.
Payment will be received with in maximum three days.10,000SPO’s will helps mall
farmers. Agricultural produce will be picked up from the farmer’s family by the buyer.
Farmers need not go to the court to resolved is put es as local dispute redressal mechanism will be there.
THEESSENTIAL COMMODITIES (AMENDMENT) BILL2020:
It was enacted to ensure the regular supply of essential commodities and to
stop the hoarding and black marketing of these goods. Drugs, fertilizers, food items,
petroleum are some of the essential commodities. The Essential Commodities
(Amendment) Bill proposes to allow economic agents to stock food articles freely
without the fear of being prosecuted for hoarding. Unlimited stocking can lead to
artificial price fluctuation and low prices for farmers after harvest.The third
ordinance amends the Essential Commodities Act to provide that stock limits for
agricultural produce can be imposed only when retail prices increase sharply and
exempts value chain participants and exporters from any stock limit.The Ordinance
requires that imposition of any stock limit on agricultural produce must be based on
price rise. A stock limit may be imposed only if the reis:(i)a100%increasein retail
price of horticultural produce and (ii) a50% increase in the retail price of non-
perishable agricultural food items. The increase will be calculated over the price
prevailing immediately preceding twelve months, or the average retail price of the
last five years, which ever is lower.
As regards this Act was concerned the farmers had insecurity that only rich
and successful farmers will be benefited and the marginal farmers do not have
infra structure of Storage. The Government however clarified that the farmer scan
also hold their products and sell them later at good prices. The legislation will help in
attracting the investment in cold storage and modernization of food supply chain.
CONCLUSION- The three ordinances aim to increase the availability of buyers for
farmers’ produce, by allowing them to trade freely without any license or stock limit,
so that an increase in competition among them results in better prices for farmers.
With there forms that have been introduced in the three Acts it can been sured that
an enabling environment is created for India becoming a food export power house in
the future. The benefits of these reforms should be the next step to bring in the
door step soft he farmers. It is here where technology can create abridge. With 43%
of our 500 million plus strong work force engaged in agriculture, the lives of millions
stand to be transformed as a result of these reforms, us hering in an era of
modernisation and prosperity for Indian farmers.
[LLM in Crime and Criminology & IPR]