What is the Farm Bill and why  farmers are protesting against it?

 Before jump into the main topic First we need to know what is APMC (Agricultural Produce Market Committee and what is MSP(minimum support price)

Agricultural Produce Market Committee (APMC) :

APMC is a marketing board established by state governments in India to ensure farmers are safeguarded from exploitation by large retailers, as well as ensuring the farm to retail price spread does not reach excessively high levels. APMCs are regulated by states through their adoption of a Agriculture Produce Marketing Regulation (APMR) Act.

MSP (Minimum Support price):

Under the Minimum support price the minimum limit of selling price is decided. MSP is  fixed by Department of Agriculture and Co-operation, Government of India to protect the  farmers  against excessive fall in price during bumper production years.

For example:

 In mandis under the MSP, potato’s minimum support price set as 25 rupees kg for buyer .under MSP no buyer can ask farmer to sell that potato below 25 rupees kg price .

Newly passed agriculture ordinance:

Bill1 (Farmer produce Trade and commerce (promotion and facilitation )bill 2020):

Lets the intra and interstate farmers produce even outside the premises of APMC (Agricultural produce market committee ) market without paying any extra market fee ,cess  or levy as state governments are prohibited from levying any of those .

Benefit for farmers:

1.   1. Farmers can sale their agro product in different state .

2.    2.It’s prohibits state governments or APMCs to collect any taxation , cess  or levy from farmers.

3.    3.Farmers can sale their product trough direct and online trading.

4.    4.It’s  allow trade anywhere outside state at farm gates, warehouses, cold storages, and so no. 

 Reason why farmer protesting against this bill:

1.  small category farmers can only produce the product and can’t  afford  transportation cost to go to other state and sell their product.

2.  It’s removed monopoly power of that state farmers so because of that farmers will face competition and because of competition the farmers need to set lower price of product in market ,and therefore there is a possibility that farmers could face loss.

3. As per farmers statement no farmer is going to sale their product in different state. farmer work is to produce product and sale that product in mandis  , farmer is not a businessman to go to other place spend money on transportation and sale that product in different state market, its only beneficial for big retailers who are going to buy that product from small farmers and sale it at higher price and Could afford transportation and warehouse  cost.

Bill 2(Farmers (Empowerment  and protection) Agreement Of Price Assurance And Farm Services Bill,2020):

Frames contractual farming between a buyer and farmer before the production of product.

Three –tier dispute settlement  framework –sub-divisional magistrate ,the conciliation board and appellate authority.

In another word under this bill the farmers can engage in contract farming , where farmers can enter into direct contract with a buyer to sale product to them at pre –determined prices.

Benefit for farmers:

1. farmers  can save themselves  from uncertain risk in farming by coming into contract with big retailers.

2. farmers  can sale  goods to retailer at one mutually agreed terms between farmers and sponsors(retailers) , and the terms can cover supply, price,   standards, quality as well as farm services. These include supply of seeds, feed, fodder, agro-chemicals, machinery and technology, non-chemical agro-inputs, and other farming inputs.  

3.Eg:if one potato chips company want  potato from one farmer that company can ask that  farmer to produce potato and can come into one contract  and  fixed one selling price ,quantity, standard and quality of product.

After the contract that farmer can sale his product to retailer when he produce potato.  so that farmer no need to go anywhere to sale his product ,company will come ,both will sign contract and after production of potato ,company arrange transportation and trucks  to load goods and buy all product which are mentioned in contract  and  can complete the contract .

Reason why farmer protesting against this bill:

1.    as per the farmers statement they state what if we come into contract with big retailer and after production of goods ,that retailer denied to purchase that produced goods.

2.    There is no mention of minimum support price (MSP) that buyers need to offer to farmers.

3.     Farmers   want written statement from government that the new bill will consider MSP (Minimum Support Price) condition. Because there is a chances that because of competition the big retailer can exploit small farmer to sell their goods Below MSP price.

 

4.    As per this bill farmer cannot appeal in Indian court about any farming issue (contract related issue) Farmer want government and court control over the contract issue. in short farmer want legal right against the retailer who will break contract .

 

5.    But government said they will form Three –tier dispute settlement framework –sub-divisional magistrate for dispute settlement related to contract.

 Bill 3 (Essential commodities (Amendment) Bill):  

Before this bill , government had control on storage and supply of  some key essential commodities .

in other word there wear restrictions on storage of some key essential commodities and as per law storage of that key essential commodities is illegal and punishable .

under this 3 bill government remove some essential key  commodities from previous act and because of it that key essential commodities storage is not illegal or is not comes under control of government.

 government removes act on some goods which was on a list of essential goods mentioned below.

The act removes cereals, pulses, oilseeds, edible oils, onion, and potatoes from the list of essential commodities.

 

Government can impose stock holding limits and regulate the prices for the above commodities—under the Essential Commodities, 1955—only under exceptional circumstances. These include war, famine, extraordinary price rise, and natural calamity of grave nature. 

Benefit for farmers:

1. Farmers can store key essential commodities and can sale their product during higher demand market situation.

2. They can store product and sale that product at higher price when there is lack of supply of that product in market.

Reason why farmer protesting against this bill:

1. All farmers are not financially strong, some farmers even don’t have their own house some of them used to live in huts and because of this reason they all are not able to store key essential commodities.

2. if we look into above situation of farmers the storage of key essential commodities and arrangement of warehouses is only possible for big  retailers.

3.Big retailers can buy essential commodities after that they can store it in warehouses and sell it when the supply is low in market at a higher price. so its not beneficial for farmers its beneficial for retailers.

Farmers demand:

 

1.    A roll back of all three ordinances.

2.    Their loans to be cleared

3.    A law should be put in place that guarantees payment from the buyers through middlemen that has always been the norm to ensure that banks don’t deduct the money in the name of loan recovery.

4.    The mandi system to remain in place

5.    The low should be made for MSP to be at least 50%more than the weighted average cost of production and if the  MSP is not paid ,it should be a punishable crime.

Farmers protest picture:

 The issue is currently in court..The Supreme Court pulled up the Center for its handling of the farmers’ protest and indicated that it may go to the extent of staying the implementation of the contentious farm laws.