The Centre is considering a new farm law that will take care of inter-state trading and help farmers sell their produce online at distant places, outside their State boundary. The plan is to set up an independent regulatory authority to frame rules and regulations, including fees, for facilitating all inter-state trading. However, the trade within the state will be untouched and the local government will have complete control over it, sources said.

The Agriculture Ministry has revived a plan from 2012 which had been shelved due to a “lack of decision-making”. Although the Law Ministry had approved the plan then, it did not progress further, sources said.

“There is provision under Article 307 of the Constitution of India to appoint such an authority which will have power to make the rules and regulations,” an official source said when asked how the law will be made since agriculture is a State subject.

Provisions of law

Article 307 says: “Parliament may by law appoint such authority as it considers appropriate for carrying out the purposes of articles 301, 302, 303 and 304, and confer on the authority so appointed such powers and such duties as it thinks necessary.” Articles 301-304 deal with freedom of trade and commerce as well as reasonable restrictions.

During the lockdown period during the Covid-19 pandemic in 2020, the Centre introduced three farm laws through an Ordinance and later on got it passed by Parliament. The government had to repeal the laws a year later after prolonged protest by farmers.

Experts said the backing down of the government on the farm reforms was a negative development as reforms would have ensured that the farmers do not depend on agricultural produce marketing committee (APMC) yards for getting remunerative returns and they could have opted for contract farming.

Details in the works

As the proposal is still under deliberations and the details are being worked out, officials are tight-lipped about the provisions of the draft legislation. But, with the experience from the previous farm laws, the Government is likely to hold wider consultations with all stakeholders before taking the Bill to Parliament, sources said.

“No state Government should oppose if their farmers get better prices from other States as direct selling may throw good opportunities for them to explore more options in selling the farm produce,” the source said.

Sources also said such a law may help increase transactions through the government’s e-NAM platform as anyone having access to it that can be able to buy and sell. However, some experts said the success of inter-state trading would depend on building a trust among buyers, who currently shy away due to lack of uncertainty about the quality of produce they want to buy since there is no third party guarantor.