Agri Business

Quick answers to key questions on the angst-causing farm Bills

TV Jayan New Delhi September 20 | Updated on September 21, 2020 Published on September 20, 2020

Kisan march: Farmers stage a protest against the agriculture Bills in Delhi (File photo)   -  THE HINDU

Parliament has been witness to much din and uproar over three farm-related Bills introduced by the government to replace three ordinances promulgated in June. The Lok Sabha has already passed the Bills despite stiff opposition from several political parties, including NDA ally Shiromani Akali Dal. On Sunday, the Rajya Sabha passed two Bills by voice vote, and is expected to take up the third on Monday.

 

What are the Bills about, and why have they attracted such widespread protests? We answer some questions.

What are the major provisions of these Bills?

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 allows farmers and traders to sell and buy farm produce outside mandis notified under State Agricultural Produce Marketing legislations. This can make inter-State and intra-State trade of agri produce smoother.

The trade can happen at farm-gate, warehouses, cold storage or processing units, letting farmers save cost and effort including on transportation. The Bill also allows for an electronic platform through which agritech firms can purchase produce from farmers without intermediaries.

The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 provides for contract farming. The prices are to be fixed before the crop is sown, with the firms providing farmers with inputs and technology support.

The Essential Commodities (Amendment) Bill removes stock limits on cereals, oilseeds, pulses, onions and potatoes stored by agribusiness firms.

The limits will be imposed only under extraordinary circumstances such as natural calamities and famines, but even then, they will not be applicable to processors or value chain participants or any exporters (up to their export commitments).

Are any of the provisions anti-farmer?

Yes and no. Trade at farmgate can indeed saves farmers from having to take the produce to mandis. But there is no provision for ensuring transparency in prices; nor is there regulatory oversight over such direct trade between farmers and firms or traders. Critics have demanded that the MSP be made the floor price for these direct sales.

Do these Bills indicate a move away from MSP?

No. The government has clearly said MSP will continue. But it can have an impact on MSP indirectly. The MSPs for various crops are decided based on well-recorded price and arrivals data available from mandis. It is feared that only inferior grade produce will come to mandis and this could pull down prices, leading to poor record-keeping, which will eventually reflect in future MSPs.

How do these Bills help the farmer? Will they increase his/her income?

They can save farmers from the clutches of commission agents in grain mandis. But getting better prices would depend on the bargaining power of the farmer.

Big farmers and farmer producer organisations would be in a better position to get more remunerative prices. Farmers who bag good contract farming deals may make gains as the firms are expected to offer inputs and technology.

Among the major beneficiaries of the Bills are exporters. For example, basmati exporters now buy the produce from Punjab, Haryana and Uttar Pradesh APMC mandis, paying 6 per cent, 4 per cent and 2 per cent mandi tax, respectively.

If they can buy directly from the farmers, they can save on these costs. Whether they will pass these on to farmers remains the question.

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Published on September 20, 2020
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