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Farmers in Punjab and Haryana have been protesting against three farm reform bills — The Farmers’ Produce Trade And Commerce (Promotion And Facilitation) Bill, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, and The Essential Commodities (Amendment) Bill — passed by the Parliament in the recently concluded Monsoon Session of the Rajya Sabha. To mark his protest, Union Minister Harsimrat Kaur Badal of the Shiromani Akali Dal (SAD), which is also one of BJP’s oldest allies, resigned from the Narendra Modi Cabinet.
What do these bills mean for the farmers?
1. These bills will allow interstate and intrastate trade of farmers’ produce beyond the physical premises of APMC markets and other markets notified under the State APMC (Agriculture Produce Marketing Committee) Acts.
2. There are fears that these reforms are leading to the scrapping of Minimum Support Price.
3. These bills will also initiate conversations about creating a framework for corporate contract farming through an agreement between a farmer and the buyer before the production or rearing of the farm produce. It has also led to the fear that big corporates will enter the agri-market and exploit the farmers.
More elaborately...
I. APMCs
86% of all agricultural land holdings in India are small and marginal, which means that the capacity of the average farmer to grow enough produce to actually make a profit is quite low. Farmers are hence given ammunition through the state-run APMC, wherein the government regulates prices and makes sure that farmers get a fair price. The middlemen, who want to buy the produce in bulk, negotiate with farmers according to the set price. In case nobody else buys the produce, the government buys it instead at a Minimum Support Price. MSP ensures that the farmers get something for all the effort they have put in. After the entire APMC process, the middlemen then sell the produce further to either local vendors or food processing industries.
With this new reform, now the farmers can choose to directly sell to private players without involving the APMCs. What farmers fear is that big corporations might now end up exploiting them by hoarding the produce at low prices. Moreover, sidelining APMCs might mean price fluctuations throughout the country.
II. Legislation on Contract Farming
It will allow farmers to enter into a contract with agri-business firms or large retailers on pre-agreed prices for their produce.
III. Essential Commodities
The Essential Commodities (Amendment) Bill, 2020 seeks to remove commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. This will end the imposition of stock-holding limits except under extraordinary circumstances.
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