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 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 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.


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.

Authored by:

Ms.Namrata Das.

[LLM in Crime and Criminology & IPR]

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