CRITICAL ANALYSIS ON THE FARMERS PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION) BILL, 2020

By- Abdul Noor

“To forget how to dig and tend the soil is to forget ourselves” - Mahatma Gandhi


Farmers are the backbone of our nation, always have been and always will be. India has always depended on the agricultural sector for its survival. Agriculture contributes very much to India’s GDP. More than that, India always considered agriculture as a way of living rather than a profession. Not only the farmers, every single human being depends on agriculture for their survival. So it is important to support and protect the farmers at all cost. It is important to check that the farmers are not exploited and that they are respected. It is the duty of the government to support the farmers and encourage agriculture. The government of India should be efficient enough to protect the farmers and stand up for their needs. If the government of India can’t protect and support the farmers and agriculture, who will?

It is imported that sufficient measures should be taken for the well being of the farmers by the government. All the decisions taken by the government regarding agriculture should benefit farmers not anyone else.

THE FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION) BILL, 2020

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance was promulgated by the central government along with the farmers’ (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 on fifth of June 2020. Later these Bills were approved in Lok Sabha on 17th September 2020 and in Rajya Sabha on 20th September 2020. The ordinance were repealed as the Bill came into force as soon as it was approved by the both the houses.

The introduction of this Bill entirely contradicted the way farmers conducted the trade of their products. The Bill brought about changes that the farmers were not ready to accept.


The Farmers Produce trade and commerce (promotion and Facilitation) Bill, 2020 permits intra-state and inter-state trade of farmers’ produce. By this Bill the farmers produce are not limited to be sold only in the physical premises of Agricultural Product Market committee or (APMC) markets or other markets which are notified under the state APMC acts. Inter- state trade according to the Bill means as the act of selling or buying of farmers’ produce wherein a trader of one states buys the farmers’ produce from a farmer or trader of another state and such farmers’ produce is transformed to a state other than the state in which the trader purchased such farmers’ produce or where such farmers’ produce originated. Intra-state trade means the act of buying or selling of farmers’ produce wherein a trader of one state buys the farmers’ produce from a farmer or trader of the same state in which the trader purchased such farmers’ produce or where such farmers’ produce originated. This bill brought about a change in the trading of the farmers’ goods. It completely contradicted how the farmers actually did the trade before. Earlier the farmers sold their goods through APMC yards or Mandis.


The bill also permits the electronic trading of farmers’ produce in the specified trade area. The Bill facilitates in the online selling of farmers’ produce to the traders through internet and electronic devices. The bill introduced the use of technology in trading of farmers’ goods. It has to be noted that these all varied very much from what the farmers were used to. The bill also gives right to government to introduce procedure and norms regarding electronic trading plate forms if it find necessary for public interest. The traders are required to pay the amount for the purchased farmers’ produce at the same time of the trade or within three working days.


The Bill prohibits the state governments from levying any market fee or cess fee under any APMC Act or any State Act from farmers or traders or electronic trading platform for trading farmers’ produce in an outside trade area. The Bill also gives resolution for the dispute raised by the farmers and traders if there is any. In case of any dispute the farmers and traders may seek a mutually acceptable solution through conciliation by filing an application to the Sub-Divisional Magistrate who will refer the dispute to the conciliation board which is appointed by the Sub- Divisional Magistrate for facilitating the solving of the dispute. The Bill also clearly mentions that no case can be filed against the central government for taking decisions under this Bill in good faith.


In essence this Bill takes the middle man which is the agencies like APMC out from the trade of farmers’ produce and connects the farmers and the traders directly. This creates more difficulties and has a negative effect on the livelihood of the farmers.


OBJECTIVES OF THE BILL

The objective of this Bill can be said as to create an ecosystem where the farmer and the trader can enjoy the freedom of choice in the sale and purchase of the farmers’ produce. This freedom will facilitate remuneration in price through competitive alternative trading channels that is as the farmer is free to sell their products anywhere it will give them opportunity to sell it to the trader who offers more price to their product. This Bill intends to give a frame work for the electronic trading of farmers’ produce. This Bill intends to give the farmers an opportunity to trade their products freely outside the physical premises of the markets notified by APMC Acts.


The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 allows the farmers to trade their agricultural products outside the physical markets which are notified by the APMC Acts. This bill promotes the intra-state trade and inter-state trade of the farmers’ agricultural products. A farmer is not required to sell their products in any single markets notified by the APMC Acts or any state Acts. They can sell their products any where inside the state or even outside the state. The Bill promotes an electronic trading platform which can be established by several entities including companies, partnership firms or societies. These electronic trading platforms are meant for direct and online trading of the farmers’ produce between the farmer and the trader who can be anywhere in the nation, in the same state or different state. This Bill allows the farmers in India to also trade anywhere outside the state notified APMC markets. The APMC market includes farm gates, ware house, cold storages and so on. The Bill prevents the state government in charging market fee or cess fees for the trading of the farmers’ produce by the farmers.


EFFECT OF THE BILL ON FARMERS

What the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 mainly intend to do is to remove the intermediate party existing between the farmer and the trader. The Bill intends to connect the farmer directly to the trader. Along with removing the middle person in the trade which is mainly Agricultural Product Market Committee the Bill also increases the places where the trade could take place. That means the farmer is allowed to trade anywhere in the nation even if it is with a trader outside the state the farmer resides in. But the question that is to be asked is that whether this Bill benefits the farmer in anyway.


The most important factor of this Bill is that it makes the trade of farmers’ produce directly between the farmer and the trader. This has a huge negative impact on the farmers. Before the introduction of the Bill, the trade was also between farmers and the traders but between them a state level committee usually APMC. The existence of such a committee was something that prevented the exploitation of the farmers by the traders. Even though there was a need of paying tax by the farmers it the state protected the farmers from cheating of the traders.


Before the Bill the farmers were able to trade their products to the traders through the state level committees like APMC. This not only protected the farmers from getting exploited but also supported the farmers through Minimum Support Price (MSP). The Minimum Support Price is an agricultural product price set by the Government of India to purchase directly from the farmers. It has to be noted that the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 does not mention anything about Minimum Support Price. So taking the intermediate parties like APMC will also remove the farmer supporting schemes like Minimum Support Price. It is fair to say that the working of APMC were not efficient enough but it did give the farmers an assurance that the state will act in case of any need and it is better for the farmers than the newly passed Bill.


Without the Minimum Support Price the traders can fix any price they wish and easily can exploit the farmers. The farmers who have worked hard whole year are forced to sell their product for very less amount of money. For instance, in June 2020 Shingara Singh a 55 year old farmer from Fatehpur village in Patiala, Punjab sold his spring season maize crop at RS.700 to RS.800 per quintal which was far below the Minimum Support Price of RS.1850 per quintal. He said that private traders buy the farmers’ produce at a much lower price than the MSP.


The Bill offers the farmers an opportunity to sell their product anywhere. The Bill provides the farmers with freedom to trade their agricultural product directly with the trader who may be in the same state of the farmer or can be in any different state than the farmer. In short the Bill removes the barrier of distance in trade of farmers’ produce. But this also has a drawback. Even though the farmers has the freedom to trade anywhere it is to be noted that most of the farmers in India are unable to afford the transport cost of their goods to somewhere else than their local markets. Before the introduction of the Bill farmers where able to sell their products in the local markets and they didn’t have to bear any transport cost even though they had to pay tax. For instance, according to Gurmukh Singh a farmer in Lachkhani village, Patiala, Punjab the farmers like him does not have the resources to trade their crop at distant places even if the trader offers higher price for their agricultural products. The promise of freedom to sell anywhere by the Bill seems a distant dream in practice.


The other problem faced by the farmers due to the introduction of the Farmers’ Produce and Trade (Promotion and Facilitation) Bill, 2020 is that they find it difficult to trust the traders. There is a huge chance of exploitation of farmers by the traders when the trade is made directly between them. It is fair to think that the farmers are also aware of this, but still they are forced to do their trade because they are helpless as it is their only source of income. But this high chance of exploitation by the traders and the fact that no one is there to prevent it make it hard for the farmers to trust the traders. Before the introduction of the Bill there was no such problem because the farmers trust the state level committee as they were trading this way for a long time and also there is a strong age-old bond between the farmers and the state level committee.


Another point to look out is that according to economist and professor Sukhpal Singh, Punjab Agricultural University 86 % of Indian farmers have less than five acres of land, and 67% of Indian farmers have less than two and half acres of land. These farmers are the victims of grave economic crisis. They cannot afford the transport cost of their agricultural products if the trader is far away from them. It is almost impossible for these farmers to sell their products in other markets. What is the purpose of increasing the number of markets if small farmers can’t participate in it?


It is also to be noted that there is a big political tension regarding the Bill. It is interesting that not only the opposition parties but some of the allied parties of the ruling party has doubts over the effectiveness of the Bill. The farmers are to be protected at all costs. Various measures should be taken in order to support them. The fact that the Bill was introduced without any discussion over it with the farmers or even the state government, as it falls in the state list points out how ill-planned the Bill is.


CONCLUSION

Agriculture and the allied sector contribute about 17.32% of India’s GDP. India always had been and always will depend on agriculture for its survival. For a country which depend on agriculture at a high rate it is necessary to protect the farmers too. Different variety of measures which supports the farmers has to be implemented by the Government of India. It is also important that the measures taken should support the small farmers too. There should never be a situation where the measures taken by the government hurt the farmers.


The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 even though lets the farmer to conduct trade anywhere he wishes whether in the same state or in different states it is inefficient in many ways. It has to be said that the Bill makes it harder for small farmers. Even though there are more markets, the farmers are unable to participate in it. What good does it do if the markets increased can’t be used by the farmers?

It is important that all the decisions and measures taken regarding to agriculture should always be for the benefit of the farmers. If the government doesn’t support the farmers on whom the whole nation depends, who will?


REFERENCE

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