In light of recent events, the agriculture bill has caught the attention of the country. Recently the government passed three agriculture bills, namely:
The reasons for the government to introduce these bills and pass them were:-
1. APMCs have limited traders, leading to cartelization and stifling competition and these traders in mandis do not allow easy entry of new members.
2. Commission charges and market fees are tolled unduly.
3. There is no competition of where and how much to sell the product for and also no multiple channels of marketing.
1. These bills violate the federal spirit of the constitution as agriculture is a state subject. The bills were passed by the center without consultation with any farmer’s organizations.
2. The bills were passed through a voice note with limited discussion in the parliament which violates article 100 of the statute books.
1st bill – Farmers produce trade and commerce act
The law has certain benefits. There will be a reduced role of intermediaries and will be beneficial for farmers and traders for sale and purchase of agriculture product hence ending the monopoly exercised by middlemen.
This bill also enables online trading and reduces farmers’ cost of transportation as the consumer collects the produce from the farm itself. This allows interstate trade of farmers produce outside mandi, and also abolishes fees, levies, etc charged by the state;
Analysis of opposition – sudden changes might not bode well. Bihar in 2006 repealed the APMC act to attract private investment and hence over time, it resulted in the collapse of structure and increased prices.
The government will have no information on the players involved, the quantity, and the prices at which it sold. Few state governments would lose mandi tax as they use this tax for the welfare of people, for example- Punjab, and Haryana.
2nd bill – Farmer’s agreement on-farm service act and price assurance –
This law has benefits like it promotes contract farming where the grower and entrepreneur come in a relationship; provide farmers with high-quality input, and lower the risk for farmers as they will transfer market unpredictability from farmers to sponsors. An agreement could be signed between the farmer and buyer before harvest and has a minimum and maximum agreement season as one crop season to five years.
Analysis of opposition – Farmers believes that this bill will dismantle MSPs and leave them at the mercy of the corporates to which the government had said that MSPs would be intact. The companies do not require a written contract and hence proving the terms would be difficult, it also doesn’t prescribe price fixation and regulatory oversight.
3rd bill – Essential commodities
The benefits of this law are that it will reduce wastage as storage facilities will improve, increasing private investment in cold storage, warehouses, and will raise farm income, and bring price stability.
Analysis of opposition – Experts believes that it will legalize hoarding as licenses are no longer required and can lead to anti-competitive behavior in the food chain.
We should these laws on trial bases in the states before ensuring full implementation, check for the loopholes, and after modification, implement thoroughly. These laws wouldn’t be helpful if the government doesn’t provide MSPs for all 23 crops and assures them. Fair play by corporates and transparency should be addressed. Increase investment, infrastructure, and spread of MSPs. The government needs the procurement of grains for their PDS and cannot allow a completely open market as another PL- 480 might occur if the prices shoot up. We need to curb this as soon as possible as it’s taking a global angle as well.