Oct 23, 2020 10:29 UTC
Oct 23, 2020 at 10:30 UTC
Punjab Legislative Assembly unanimously rejects the Farmer Bills
On 20th October, 2020 Punjab became the first State to formally refuse and reject the three recently passed Amendments by the Parliament in agriculture sector commonly known as the ‘Farm Bills’ terming them ‘anti-farmer’.
Interestingly the resolution found a unanimous support of the House. The Assembly passed 3 State Bills rejecting and thereby effectively nullifying the effect of the Farm Bills earlier passed by the Parliament in September. All the members of the Assembly voted in favor of the resolution and the Bills, except the two BJP members who stayed absent in the special Assembly session.
The Assembly demanded their immediate annulment followed by an effective mechanism to protect the minimum support price (MSP) regime through an ordinance and ensure its continuance wherein the Centre secures the procurement of grains from farmers.
Effectively, the three State bills prescribe a punishment for imprisonment for not less than three years and fines for any sale-purchase of grains such as wheat or paddy below the MSP. The bills also prescribe punishment for hoarding and black-marketing of prescribed agricultural produces. Apart, there is also provision for punishment for harassment of farmers or payment of less price to the farmers by inserting new Section 6 and 11 in the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020.
Meanwhile the ‘Essential Commodities (Special Provision and Punjab Amendment) Bill, 2020’ sought to amend the Central passed ‘The Essential Commodities (Amendment) Act, 2020’ by introducing amendment in Section 1(2) and Section 3(1A), thereby restoring the status quo prevailing before 4th June, 2020.
Earlier in September the Farmer Bills episode in the Parliament witnessed two historic landmarks, both in terms of the legislation and its passing in the Parliament. The unprecedented chaos and ruckus, which was created in the Parliament over the discussion of these bills when Deputy Chairman Harivansh Singh’s call for voice vote on the bill, happens to carve a new historic low for the Parliament itself. We also witnessed Trinamool Congress’ MP Derek O’Brien tearing the rule book on the face of Deputy Chairman in protest of the bills, nevertheless the bills were passed amid the chaos with the voice vote in the Upper House.
Denying the opposition MPs a physical vote, gagging the media reports as well as no consultation with the concerned and interested pressure groups and parties before drafting the laws, have attracted the government the ire of the masses, particularly the Indian farmers. The amendments have provoked large-scale nationwide protests from farmers against the government, also inspiring resignation of a minister of PM’s cabinet and oldest ally to the NDA government, the Shrioamani Akali Dal from Punjab on the eve of its introduction in the Parliament.
The President gave assent to all 3 Farm Bills amidst controversy and unprecedented drama on 24th September 2020.
What are the controversial Farm Bills?
1. The Essential Commodities Act (Amendment), 2020.
Essentially the 1955 Act was legislated at a time when the country was facing a scarcity of foodstuffs due to persistent low levels of food grains production. The country was dependent on imports and assistance to feed the population. To prevent hoarding and black marketing of foodstuffs, the Essential Commodities Act (ECA) was enacted in 1955.
Basically the ECA gives power to the central government to add or remove a commodity in the schedule. The Centre, if it feels satisfied that any commodity that is necessary to the public interest, can notify it as an essential commodity, with the consultation of the state governments. Therefore, by declaring a commodity as essential the government can control the production, supply and distribution also further impose a stock limit on such commodity. The law prohibits hoarding and black marketing of essential commodities. Also, if the Centre finds that the price of a certain commodity is going up due to short supply, it can order the state governments to fix the stock-holding limit of the commodity for a fixed period.
According to the Ministry of Consumer Affairs, Food and Public Distribution, the implementation authority of the Act, the Schedule contained seven commodities — drugs; fertilizers, whether inorganic, organic or mixed; foodstuffs including edible oils; hank yarn made wholly from cotton; petroleum and petroleum products; raw jute and jute textiles; seeds of food-crops and seeds of fruits and vegetables, seeds of cattle fodder, jute seed, cotton seed.
Though this recent amendment, the Government through Parliament seeks to deregulate commodities such as cereals, pulses, oilseeds, edible oils, onion and potatoes. A new sub-section (1A) in Section 3 of the EC Act wherein the supply of food commodities including cereals, pulses, oilseeds, edible oils, onion and potatoes can only be regulated under extra ordinary circumstances that is in case extraordinary price rise, situation of war, famine or severe natural calamity.
The amendment therefore, takes out these items from purview of section 3(1) of the ECA which gave power to central government to control production, supply and distribution of the essential commodities.
Also, it stipulates that any action on imposing stock limit will be based on price rise.
“An order for regulating stock limit of any agricultural produce may be issued under this Act only if there is (i) 100 per cent in the retail price of horticultural produce, or (ii) 50 per cent increase in the retail price of non-perishable agricultural foodstuffs.”
This move by the central government offers open invitation to the big private investors who were earlier hesitated to put hands in the agricultural sector. Big companies like Adani, Reliance and Walmart can build huge processing and storage lines, which will ensure them market domination. As the restrictions on stocking of such food commodities are removed it will lead to corporations hoarding and stocking the farm produce during the peak harvest season, when prices are generally lower, and releasing it later when prices increase. This will increase unscrupulous anti-competitive activities in the market where the dealers will control the supply and distributions of the commodity. By allowing room for creating scarcity of such commodities in the market and hoarding it, the amendment eventually open doors for such big investing corporations to manipulate and increase the prices and release them at their best profit margin at the cost of small farmers. The amendment serves as a bitter-sweet thorn for the farmers as it may boost the farmers income as they will be sell their produce anywhere but in other hand it will increase rural poverty and will have an adverse effect on public distribution system for the government will have no control over supply of such food items. The major benefit will therefore only go in hands of dealers instead of farmers.
2. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
The Bill sought to provide barrier free trade of farmers produce outside the market notified under the various state agricultural produce market law i.e. state made APMC Agricultural Produce Marketing Committee Acts. Earlier the farmers had to sell their produce at APMC market within their region. Now this legislation claims provides liberalization to agriculture sector as farmers and trades can enjoy the freedom of choice of sale and purchase of agriculture produce. It removes the inter-state and intra-state barrier to trade and commerce outside the physical premises of the markets under APMC. That is the farmers can either sell their produce in other APMC regulated mandis within their states or outside their state or sell their produce to other private markets other than APMC regulated mandis, of their choice. If the famer believes a better deal of trade is possible with some other private buyer, then he is free to sell his produce to such private buyer instead of selling to APMC mandis. In addition to mandis farmers also get freedom to do trading at farm-gate, cold storage, warehouse, processing units etc. The legislation has also proposed to provide an electronic trading in transaction platform for ensuring a seamless trade electronically.
The legislation bypasses the state made APMC eliminating the intermediaries. That is the APMC mandis have traders which buys produce from the farmers and then trader sale it out in the market, as this legislation has welcomed private players in the agricultural market. Now there will be competition between the mandis and the private enterprises. One of the major concerns in the legislation is relating to where trade can take place, who is eligible to trade with farmers, dispute resolution between farmers and traders, and fees on trade. As the APMC mandis are controlled by the government so the farmers know that their interests are secured but they are afraid that their interests will not be protected outside the mandi system and are suspicious of what the markets will offer and how the private companies will treat them. Other concern is that as the private players will offer the farmers a better deal than the APMC mandis, therefore the farmers will ultimately trade with the private and it will lead to collapse of government regulated APMC mandis. Other major issue is the regulation of MSP i.e. Minimum Support Price. The government acts as a guarantor of MSP, which sets a specific price at which the produce will be bought from the farmers in APMCs. Therefore, the main contention is that the MSP will work only in the government regulated mandis, not in private sector.
3. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Bill, 2020
The Bill seeks to empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field. In simple words it brings the concept of contract farming that is the farmers can directly get in a contract with the sponsors to directly sell their particular farm product to them. The price will be decided before the sowing of crops between the sponsor and farmer. The prior price determination, farmers will be shielded from instability of market prices. The risk of market instability and unpredictability will transfer to the sponsor. That the farmer shall receive the fixed amount as mentioned in the contract from the sponsor even if the market price of such agriculture produce rise or falls.
This legislation also bypasses the state regulated APMC mandis. The farming produce under the farming agreement between the farmer and the sponsor will be exempted from all the state Acts aimed at regulating sale and purchase of such farm produce. Moreover such produce will be also exempted from any stock limiting obligation and also from the provisions of the Essential Commodities Act, 1955. While offering farmers the protection against price exploitation, it does not prescribe mechanism for price fixation. There is lack of structure, question lies that by whom and how; the prices will be decided for any particular agricultural produce. Therefore it creates an apprehension that the private sponsors houses could lead to farmers’ exploitation creating bondage labor farming.
The bill(now Act) stipulates if there occurs and dispute between the sponsors and the farmer such dispute shall first referred to the board of resolution. If unresolved then it will be heard by the SDM for resolution and appeal lies to an appellate authority presided by collector or additional collector.