Farmers’ bills: India’s farm reformsto bring change in three folds

[ Manish Kanwat ]

Lack of marketing facility and geographical restrictions on selling of local agriculture commodities in India, particularly in Arunachal Pradesh, are two of the major causes of low income and poor development of the agriculture sector and the farmers of this hill tract.

Hilly terrains and legal restrictions prevent marketing agricultural products and spices of Arunachal Pradesh countrywide; therefore, legal regulation and rules are needed to ensure that the farmers have the freedom of choice of sale and purchase of their produce at remunerative prices. Payment has to be made to the farmers on the same day or within three working days where the procedure so requires. It has no bearing on the MSP, permits online trading, provides farmers with additional marketing channels along with APMCs, and ensures efficient, transparent and barrier-free inter- and intra-state trade and commerce outside the physical premises of the APMCs, so that Arunachal’s locals become global.

The wide disparities in agri-marketing regulations have resulted in fragmented markets across states. Keeping all these factors in mind, the union government passed the new farm bills with the aim of changing this, but the jury is still out on whether it will have the intended impact.

The new bill is aimed at reforming and accelerating growth in the sector through private sector investment in building infrastructure and supply chains for farm produce in national and global markets. It is intended to help small farmers who don’t have the means to either bargain for their produce to get a better price or invest in technology to improve the productivity of farms.

The bill on agriculture market seeks to allow farmers to sell their produce outside the APMC ‘mandis’ to whoever they want.

Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Act, 2020

# Disparity between agriculture and other sectors despite economic liberalization;

# Fragmented and insufficient markets with high market fees and charges;

# Inadequate infrastructure and credit facilities

# Information asymmetry

# Restriction in licensing

Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020

# Legal framework for agreements between farmers and sponsors for purchase of farming produce and provision of farm services entered into before harvest, guidelines for model farming agreements by central government;

# Price of the produce will be clearly mentioned in the contract

# Clearly specified dispute resolution mechanism: Protecting rights of both farmers and buyers

Essential Commodities (Amendment) Act, 2020

# The act invokes only in an extraordinary situation: war, famine, extraordinary price rises and natural calamities;

# Imposition of stock limits only be based on price rise and can only be imposed if there is 100 percent increase in retail price of horticultural produce and a 50 percent increase in the retail price of non-perishable produce.

Benefits of farm reforms

# Single unified market;

# Freedom for farmers to sell their produce to whom they want and where they want;

# End of APMC cartel monopoly;

# MSP continues to act as safety net for farmers;

# Reduction in market fees, taxes, etc, and better price discovery;

# Legal framework protecting farmer rights;

# Development of infrastructure close to farm gate;

# Contract farming: Form of price assurance and boost linkages with food processing sector; and

# Farming can become profitable even for small and marginal farmers. (Manish Kanwat is the head of the Anjaw Krishi Vigyan Kendra.)