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While The Govt Claims The Farm Bills As Farmer-Friendly, Critics Say The Contrary. Which One Is It?

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The Union Cabinet passed three agriculture ordinances in June 2020, claiming them to be farmer-friendly. 

What Are The Three Bills? 

  • The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
  • The Farmers (Empowerment and protection) Agreement on Price Assurance and Farm Services Bill, 2020
  • The Essential Commodities (Amendment) Bill, 2020

The First Bill

The first Bill allows barrier-free trade of farm produce. Earlier, the farm produce could only be sold at notified wholesale markets or mandis run by the Agriculture Produce Marketing Committees (APMC). Each APMC has licensed middlemen (arhatiyas) who would buy from the farmers at a price set by auction, before selling to institutional buyers like retailers and big traders.

Under the Bill, farmers will directly be able to sell their produce to institutional buyers without the involvement of middlemen, and at the price agreed between them.

What Can Be The Consequences Of This Bill? 

  • This will expose farmers to corporates, who have more bargaining power and resources than small or marginal farmers.
  • In our country, 85% of the farmers own less than two hectares of land and it will be difficult for them to negotiate directly with large-scale buyers.
  • The coming up of private mandis will lead to closure of existing APMC mandis.
  • There will be no taxation on private market.
  • Small farmers will find it difficult to avail potentially better prices at markets further away because of constraints on travel and storage.
  • If private buyers start purchasing directly from the farmers, state government will lose out on taxes that are charged at mandis.
  • The scrapping of the mandis endangers the jobs of both middlemen and labours who work there.
  • Either middlemen will become jobless or will end up working for private companies as their middlemen. Either ways, the middlemen’s existence is for sure. So, the government’s claim of ending exploitation by middlemen will never be successful practically.


This Second Bill allows farmers to enter into an agreement with agri-firms, exporters or large buyers to produce a crop at a pre-agreed price — i.e. Contract Farming.

Even earlier, there was no restriction on farmers to sell elsewhere.

Due to the presence of eNAM (Electronic National Agriculture Marketing), farmers were already free to sell their products without any barriers. So, this Bill provides no such advantage to the farmers. All it does is makes the private companies powerful, which can result in the exploitation of farmers in the long run.

The Second Bill

This Bill allows farmers to enter into an agreement with agri-firms, exporters or large buyers to produce a crop at a pre-agreed price — i.e. Contract Farming. 

What Can Be The Consequences Of This Bill? 

  • The government will have no control over the prices.
  • It can lead to the removal of MSP (Minimum Support Price).
  • Private companies might offer lesser price for the produce. This can lead to helplessness of poor and small farmers.
  • Small farmers may find it difficult to sell their produce at the right price to corporates.

The Third Bill

The government says that it will no longer stock essential food commodities, including cereals, pulses, edible oil, sugar etc. This allows economic agents to stock food items freely, without the fear of being prosecuted for hoarding.

What Can Be The Consequences Of This Bill? 

  • Stocking can lead to artificial price fluctuation and low prices for farmers after harvest.
  • Companies can buy produce at low price from the farmer and sell it at a higher price to the consumers when the price is high.
  • This Bill doesn’t assure any advantage to the farmer or consumer.
  • The Bill gives advantage only to companies and does not empower the farmers.
A farmer reaping the first fruits of his harvest.

In a country such as India, the agriculture is already vulnerable. Hence, it is essential to have state-supported schemes to support the farmers. Although our Prime Minister announced that MSPs will not be removed, there is no mention of it in the Bill. This causes fear in the minds of farmers. Only 6% farmers currently benefit from MSP, as procurement is not done for all 20+ crops for which MSP is declared.

The main centre of protest against the Bill has been Haryana and Punjab. These are one of the few farming states of our country. More than nine crore families are involved in farming. Punjab’s economy is based on FCI (Food Corporation of India). If these Bills become an Act, it will lead to misery of farmers.

There are 28,000 registered commission agents in Punjab who might become jobless if APMCs are removed. The intention displayed by the government seems good only on paper. In reality, it will neither be easy nor profitable.

What Should The Government Do? 

  • MSP should be made a legal right.
  • MSP should be linked to contract prices.
  • APMSs should be reformed, not removed.
  • Reforms in the agriculture sector must be brought by the government’s side, not the private sectors.

Not only Punjab and Haryana, but many other states including Karnataka are involved in massive protests. Even during the pandemic, the farmers are protesting. A tractor protest was also held earlier in July this year. Harsimrat Kaur Badal, member of Shiromani Akali Dal, an MP from Bhatinda, resigned from her post in the Food Processing Industry in the Union Cabinet to support the farmers.

The government claims that this will end the exploitation of farmers by the middlemen, but practically nothing will change as private players will look for their own benefit instead of thinking about the farmers.

Now I leave it up to you to decide whether the farm bills are FARMER FRIENDLY or not.

You must be to comment.

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Find out more about her campaign here.

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