Farm Laws: Explainer

   Posted by: aman   in Punjab

Dear Friends,

Recently Trolley Times asked me to write an easy explainer on the three Farm Laws. The piece came out in Panjabi in yesterday’s edition of Trolley Times. I am putting it up here for your reading and sharing.

When we look at any law, bear in mind there is always a letter of a law and a spirit of a law, and then there is the timing of the Law. The exaggeration in the names of the anti-farmer Farm Laws betray their spirit which truly should be to benefit the farmers, the labour, those engaged in agriculture who amount to over 50 per cent of India.

The Ordinances came in June when Coronavirus pandemic was at its peak and India was under lockdown. When a special Parliament session was called in September, the national economy in the previous quarter had slipped to -23.9 per cent with positive growth 3.4 per cent only in the agriculture sector. In the Rajya Sabha, the Bills were bulldozed into Laws through a hasty voice vote when Opposition was on protest outside. These sequences of events reveal the government was acting in stealth and did not have the farmers’ interest in mind.

Owing to shortage of space, instead of the full text of the three Laws let us look at them in brief and their implications.

- The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020: the Law permits intra-state and inter-state trade of farmers’ produce beyond the physical premises of Agricultural Produce Market Committee (APMC) market yards (mandis). This basically proposes a parallel system of private mandis. While traditional mandis in Panjab and Haryana, though biggest in the world, have many structural issues, rest of India does not have an elaborate mandi structure. Regulated mandis levy state government taxes needed to building villages roads and other infrastructure. The new Law allows private unregulated mandis which will not benefit state governments, there will be no limit on how low the price of farm produce can drop when private players buy. Private players will prey on farmers. In 2005, Bihar abolished APMCs and since then the farmers of Bihar have suffered greatly.

- The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020: the Law creates a national framework for contract farming through an agreement between a farmer and a buyer before the production or rearing of any farm produce. More than 82 per cent of Indian famers are small and marginal. They are trapped in a cycle of debt and agriculture as a profession remains unviable. Yet, as far as self-sustenance is concerned, farming is one of their greatest support systems. There is a need for co-operative farming but not contract farming that benefits the corporates. The new Law bars recourse by farmers to the courts. In cases of conflict, the Law vests authority with the local sub-divisional magistrate. This will be highly skewed in favour of private entities as the individual farmers will not have the resources to stand against mighty corporations. This model of corporate farming has already failed in Panjab and Gujarat where PepsiCo made contracts with potato growers.

- The Essential Commodities (Amendment) Act, 2020: the Law delists cereals, pulses, potatoes, onion, edible oilseeds, and oils as essential, allowing private players to stockpile as much quantity as they can with no limits. The government can regulate these commodities only in extraordinary circumstances such as war, famine, natural calamities or steep price rise – 100 per cent increase in retail price (in the case of horticultural produce) and a 50 per cent increase in retail price (in the case of non-perishable agricultural food items). When control of supplies is unregulated and in the hands of private players, they will cause artificial shortages and increase prices by say 20-25 per cent each time and stay below the radar of regulation. In the end the consumer will be hit. The argument of ‘free market’ does not work because there are not too many players who would work as check and balance. In fact, there is largely only one player who will stockpile and another who will sell.

We must notice that 67 per cent of India is dependent on the public distribution system for rations. When government wants to vacate mandis, the Food Corporation of India is under a Rs 2.65 lakh crore debt, where and how would the government procure food for the public distribution system? If these Laws are implemented, what will happen to the food security of India? As far as freeing the farmer to sell were they want, this option has already been available to farmers even before these new Laws.

There is also the matter of constitutional validity of the Laws. As per our Constitution, agriculture is a subject of the State List. The Centre has no right to make a national law on agriculture. The government has used Article 33 of the Concurrent List ‘Trade and Commerce …’. This Article applies to traders, not farmers. We need to note that the farmer is always a producer of food, not a trader of food. At most, the farmer sells but does not trade in food. This is a fine legal point but very essential to the understanding of the Laws.

The farmers of Panjab, Haryana, gradually other states have been opposing the Laws since June 2020. In September 2020, Panjab came down on the streets. When after two months of protests, the government did not listen to the farmer unions, the farmers from Panjab, Haryana, west Uttar Pradesh, moved to Delhi in end November. Maharashtra, Gujarat, Tamil Nadu, Andhra Pradesh, Bengal, Karnataka, and farmers from other states too are rallying against the Laws. These protests are by a loose confederation of farmer unions called Sanyukt Kisan Morcha, with support of individual unions such as BKU Ekta Ugrahan and Khet Mazdoor Sangharsh Committee and the large umbrella farmer union AIKSCC comprising 250 plus farmer unions from all over the country.

This resistance is quite a contradiction to what the Central government has been propagating over the last many months: famers do not understand the Laws; the new Laws will benefit the farmers. In fact, on December 5, during negotiations with farmers the Centre proposed major concessions to the Laws which actually vacate the Laws: registering private mandis, courts to arbitrate, and no buyer can take loans against farmland. The farmers contend that is the government is willing to empty the laws, why not scrap them? This is to prevent another set of amendments to the same laws after the protest is withdrawn.

Recently, on January 12, the Supreme Court stayed the implementation of the Laws and formed a four-member committee to re-look the Laws. Sadly, this is a gimmick because all members are pro-Laws and the farmer unions have rejected the committee. One member has already resigned.

The unions are focussed on their demand: repeal three Farm Laws, guarantee Minimum Support Price to all 23 categories of farm produce all over India, scrap proposed Electricity Amendment Bill 2020 and Air Quality Management of NCR Ordinance 2020.


This entry was posted on Monday, February 1st, 2021 at 12:54 am and is filed under Punjab. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Comments are closed at this time.