New Farm Bill 2020: Everything You Should Know

Since long, the agriculture markets in India have been ruled under anarchic system with restricted prices and prohibiting exports and private trade; that made agriculture and agricultural law, one of the least competitive industries having no relevant provisions that could provide freedom and relief to the farmers. 

Witnessing the problems within the entire ecosystem, the Government of India has lately introduced three new farmer bills, namely, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 (FPTC), the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 (FAPAFS), and the Essential Commodities (Amendment) Bill, 2020.

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

Citation: Act No. 21 of 2020

Date: Introduced in Lok Sabha on 14 September, 2020, passed on 17 September 2020; passed in Rajya Sabha on 20 September 2020.

Introduced by: Narendra Singh Tomer, Minister of Agriculture and Farmers Welfare.

Brief of the Act: This act allows farmers intra and inter-state trade of farmers’ produce beyond the boundaries of Agricultural Produce Market Committee (APMC) markets notified under the state APMC Acts.

Provisions of the Farm Bill, 2020: Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 (FPTC)

• Trade: Farmers can trade outside APMC markets which includes factory premises, farm gates, cold storages and so on. Before that, farmers could only trade in APMC yards or mandis. 
• Trading Medium: Farmers can trade their produce through alternative trading channels to make barrier-free inter-state and intra-state trade. 
• Electronic Trading: It can also provide electronic trading of farmers’ produce within the APMC area. Besides, farmers can facilitate direct and online buying and selling of the produce through the electronic medium or the internet.
• No Market Fee: According to the act, the Government cannot levy any market fee or cess on the farmers’ produce.

The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 (FAPAFS)

Citation: Act No. 20 of 2020

Date: Introduced in Lok Sabha on 14 September 2020, passed in Lok Sabha on 17 September 2020; and passed in Rajya Sabha on 20 September 2020.

Introduced by: Narendra Singh Tomer, Minister of Agriculture and Farmers Welfare

Brief of the Farm Bill: The act designs a national framework agreement between the farmer and the buyer before the production of any farm produce.

Provisions of the Farm Bill 2020

• Proper Agreement: It provides an agreement between a farmer and a buyer prior to any farm production. The agreement covers mutually agreed terms and conditions between a buyer and a farmer for the supply of seeds, agro-chemicals, feed, fodder, non-chemical ago-inputs, and other farming machinery and technology.
• Period of Farming: The minimum farming agreement shall be for only one seasonal crop or only one production cycle whereas, the maximum farming agreement shall be of five years.
• Pricing Policy: The pricing of farming produce would be based upon the agreement between a farmer and a buyer. A guaranteed price or amount above the guaranteed price has to be specifically mentioned in the agreement.

Note: Nowhere in the act it is mentioned that the buyers have to offer Minimum Support Price (MSP) to the farmers.

• Deliverables: At the time of delivery, buyers need to pay at least two-thirds of the agreed amount and the remaining amount shall be paid within 30 days of the delivery date. 
• Dispute Resolution: The farm bill offers a three-level dispute resolution regime – Conciliation Board, Sub-Divisional Magistrate and Appellate Authority.

The Essential Commodities (Amendment) Bill, 2020.

Citation: Act No. 10 of 1995

Date: Introduced in Lok Sabha on 14 September 2020, passed in Lok Sabha on 15 September 2020; passed in Rajya Sabha on 22 September 2020.

Status: Amended; The amendment received Presidential Assent on 26 September 2020.

Brief of the Act: Enacted in 1995, this act ensures the delivery of essential commodities like food items, drugs, fuel etc. that could affect the lives of people. 

Role of the Government:

• The production, supply and distribution of such essential goods are regulated by the Government of India.
• The Government can decide the MRP of such packaged goods.
• In case of emergency needs, the government can add or remove items from the list of essential commodities.
• In case of shortage, the government can release notification about stock-holding limit on such commodities for a specified period of time. 
• The State Governments can decide whether or not to impose any restrictions notified by the Central Government. In case, State Governments impose any restrictions, then the traders must immediately sell stocks that are held against the mandated quantity in the market. 

What is there in the Amendment?

Within this act, the Government of India will list down the essential commodities to regulate its supply in case of emergency like – natural calamities, inflation etc. Commodities like cereals, potato, onion, pulses, oil seeds etc will be deregulated. 

• In case of any restrictions, the stock limit on the farmers produce will be dependent on price rise.
• Such restrictions can only be practiced if there is a 100 per cent increase in the retail price of horticulture produce and 50 per cent increase in the retail price of non-perishable goods. 
• The increase will be calculated on the existing price for 12 months or the average price of last 5 years, whichever among them is lesser.
• The purpose of this act is to eradicate fears of private investors of regulatory influence in their business operations. 
• It also provides freedom to the farmers to produce and to distribute their produce to private sectors or foreign direct investment within the agricultural sector. 

Despite having a robust structure of the new farm bill, farmers are not satisfied with it hence, they have been protesting against it lately. 

Photo by Alejandro Barrón from Pexels