According to the 38th Round of the National Sample Survey (NSS) report in 1983, around 77 percent of rural households depend on the agricultural sector to sustain their livelihoods. Over the years, rural households’ dependency on agriculture has declined to 50 percent as per the latest round of the Periodic Labour Force Survey (PLFS) for 2018-19.
Policies formulated by Governments to uplift the farm sector seem unable to penetrate up to the grass-root level, hence the expected development in Agriculture Sector and increasing farmer’s income could achieve so far.
With the vision to change the way agricultural produce is marketed, traded and stored across the country, the Government of India promulgated new bills in the form of ordinances in June; namely The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020; The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020. These bills were later passed in delayed Monsoon Session in Lok Sabha, Rajya Sabha and got the assent of the President, which converted these bills into acts. With these two new bills, the government has amended one existing act with The Essential Commodities (Amendment) Act, 2020.
What these Acts say?
Alternate trading channels will open more choices for farmers, reduce marketing costs, and help them get better prices. A farmer from the region of surplus produce can directly sell the consumers at the region of deficit and can reap better prices. Farmers will not be charged any cess or levy for the sale of their produce under this Act.
On the other side, states will lose revenue of ‘mandi fees’ if farmers will sell their produce outside registered mandis. Commission agents will also stand to lose, if the entire farm trade moves out of mandis, while these commission agents have obtained the license from the government.
Before moving ahead, it is pertinent to mention that an online platform named eNAM (National Agriculture Market) portal was introduced by current government in 2016 with a vision to allow farmers to sell their produce anywhere in the country by linking mandis on a single online platform. In the last 4 years, (As per e-NAM portal) 1000 APMCs are linked to the eNAM network from 18 states & 3 UT’s and 175 commodities are being traded in this online platform.
On the other hand, the installed capacity of a value chain participant and the export demand of an exporter will remain exempted, so the big companies will have the freedom to stock commodities, which may help them dictate terms to farmers.
What is the stand of the Government?
The MSP mechanism for farmers will continue. The proposed laws would not encroach upon the Agriculture Produce Marketing Committee (APMC) Acts of the states. These Bills are to ensure that farmers get better prices for their produce without being subject to the regulations of mandis.
Adding the Acts will increase competition and promote private investment which will help in the development of farm infrastructure and generate employment. The idea behind all three bills is to liberalise the farm markets in the hope that doing so will make the system more efficient and allow for better price realisations for all stakeholders, especially the farmers. The central concern of the Bills is to make Indian farming a more remunerative enterprise than it is right now.
Why Farmers and state governments are in Fear?
Farmers and few state governments are opposing these farm bills and protesting to roll them back, few of the points are as follows:
All together these farm bills are largely aimed at 23 commodities for which MSP is set by the central government, but to a better price realisation and for the benefit of all the farmers, we should focus on all the farm produce e.g. pulses, cereals, vegetables, fruits, spices, livestock etc. We should also encourage small, marginal and large farmers towards zero budget farming and to diversify them towards other options like food processing, horticulture, poultry, fisheries, floriculture which may add to the better realisation of prices.