Introduction of Farm Bills in Rajya Sabha

On 20th September 2020, the Government of India introduced in Rajya Sabha three farm sector-related bills.

The bill received non-compliance by many opposition parties. The motto of the farm bills is to increase the flexibility in trade in agriculture commodities, the attraction of private sector/FDI in the farming sector of India, and increase the investments in the farming infrastructure.

The following are the three bills given along with the description.

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

Provisions of the Bill:

• An ecosystem would be developed in which the farmers and traders will be given the freedom of selling and purchasing the farm produce even outside the registered mandis that are under the state's APMCs
• Encouragement of restriction-free interstate and intrastate trade of farmers production
• A decrease in the marketing and transportation costs that will aid farms for getting better prices
• Develop a facilitative framework for electronic trading

 Opposition:

• Revenue loss for the states if the states would stop getting the mandi fees as farmers would be selling the product outside the registered APMC markets
• The future of commission agents is to be thought upon if the whole farm trade goes out of the mandis
• There are predictions that through this bill the MSP based procurement system might end
• e-NAM is an electronic trading platform that uses the physical mandi structure. therefore the future of e-NAM has to be thought about if the mandis would be destroyed in the absence of trading

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

 Provisions:

• Farmers will now be able to sign the contract with the agribusiness firms, processors, wholesalers, exporters, or large retailers for the selling of future farming produce at a price that is set already
• The Farmers that have land less than 5 hectares will be getting via aggregation and contract (marginal and small farmers are a total of 86% of the total farmers in India)
• The risk of market unpredictability would be shifted to the sponsors from the farmers
• Farmers will have access to modern technology that would result in better production
• Farmers income will get increased and the cost of marketing will get decreased
• Direct marketing can be done by the farmers for the elimination of the intermediaries that will help for full price realization
• Effective dispute resolution mechanism with proper redressal timelines

 Opposition:

• The farmers in the contract farming arrangements would be the weaker players according to the power of negotiation of their requirements
• Possibility of sponsors of not liking to deal with the multitude of small and marginal farmers
• There is a chance of the big private companies, exporters, wholesalers, and processors, the sponsors will be having an edge in the disputes

 The Essential Commodities (Amendment) Bill, 2020

 Provisions:

• Commodities such as cereals, pulses, oilseeds, onion, and potatoes from the essential commodities. The imposition of stock holding limits of such items will be removed in cases of extraordinary circumstances such as war
• The attraction of private sector/FDI in the farm sector will increase and it will help to decrease the fear of the private investors of excessive regulatory interference in the business operations
• Investments will pour in for farm infrastructures such as cold storage and modernizing the food supply chain
• Price stability will be established for farmers and consumers
• A competitive market would be established and wastage of farm produce will be reduced

 Opposition:

• The price limits that are set for the extraordinary circumstances are very high that there are chances that they would never be triggered
• There are chances that the big companies will be dictating terms to farmers as they will be having the freedom to stock commodities that will cause a reduction of price for the cultivators
• The recent decision of export ban on onion develops a doubt on its implementation