The Farm Bill 2020

- By Abhinav

Three ordinances have been drafted, comprising three bills for the farmers. It is also known as Farm Bill 2020. The newly passed farm bills will give farmers the freedom to trade across states and give them an opportunity to turn into the traders of their own produce. The intent behind these bills is to create an equilibrium between the farmers and the traders, so they have the freedom of choice of sale and promote barrier-free interstate trade and commerce notified under the State Agricultural Produce Marketing Legislation. The aim of the bill was to uplift the traders and farmers to reach a bigger market and not just limiting their sales to the registered ‘mandis’. It aims to provide cost-friendly transportation and farmers expect better prices for their produce. This also indicates a platform for e-commerce (Flipkart, Groffers, Amazon, Jiomart) in the agriculture field. The Farm Bill is a visionary step to empower farmers with technology, to call off their restrictions in the longer run. This will encourage people to develop and take up careers in agriculture.

The three bills include:

1. The farmers Produce Trade and Commerce Bill, 2020 (promotion and facilitation):

It allows barrier-free intrastate and interstate trade of farm produce. Previously, the produce was sold to licensed middlemen before selling it to retailers and big traders. This change aims to eliminate middlemen and sell directly to retailers. However, the farmers group are concerned this gives them exposure to the corporates who are large scale buyers and more bargaining powers. 85% of farmers in India own less than two hectares of land which is not a fair deal for the small-scale farmers to fulfill their stomach.

2. The Farmers (Empowerment and Protection) Agreement on price Assurance and Farm Services Bill, 2020:

This will allow farmers to enter into agreements with the agricultural firms, exporters, and large buyers to produce a crop for a pre-agreed price. Farmers' concern is, this means the MSP (minimum support price) will fade away eventually when private companies enter and the government calls off its hands. There is a protest ongoing where farmers demand to link MSP with contract prices.

3. The Essential Commodities (Amendment) Bill, 2020:

This allows economic agents to stock food articles freely without the fear of being prosecuted for hoarding. Unlimited stocking can lead to artificial price fluctuations and low prices for farmers after the harvest is what the farmers worry.

The Lok Sabha on September 17, 2020, passed two farm bills amid protests from the opposition parties and a section of farm organizations. The two bills mentioned are The Farmers Produce Trade and Commerce Bill, 2020, and The Farmers Agreement on Price Assurance and Farm Services Bill, 2020.

The bills no doubt will bring change in the current agricultural system but, lacks the equality factor for both the farmers and retailers. The Bills unintentionally favors the retailers more than the farmers. The farmers’ demands include:

1. MSP should be made a legal right.

2. APMC reforms are needed and not its removal.

3. Investment in the agriculture sector must be from the government and not the private sector.

Lastly, there are two scenarios possible, one of the entry private markets provide higher prices for products, and the other that there will be no government support of MSP.

---