Empowering the Farmers

New laws on Farm trade will free the farmers from all illicit market restrictions and will open the market beyond Mandis
Keywords: Farmer | Trade | Agriculture | Reforms | Export | Price | APMC | Mandis | Indian Economy | MSP | One Nation One Market
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Agricultural reforms continue to be a contested issue in Indian politics. Yet they are essential not only for the Indian economy but also for the global market because of its size and potential impact on it. In this context, the healthy growth of Indian agriculture is conceived as a contribution to the global economy. Majority of the population in India is still dependent on agriculture for livelihood.

Taking forward the agenda of agriculture reforms to benefit farmers, the Government of India brought three bills (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 and The Essential Commodities (Amendment) Bill, 2020) in the Monsoon session of the Parliament and all three bills were passed in both the Houses and have now become an act. 

These three Agro Acts seek to free farm trade from all restrictions and enable farmers for all transactions at competitive prices. The Union Government has repeatedly assured that these three bills on Farm trade wouldn’t do away with Minimum Support Price (MSP), but rather free the farm trade from all illicit market restrictions, open the market beyond ‘mandis’ and further assists the small and marginal farmers to sell their produce at market/competitive prices. The new laws also provide full autonomy to farmers to sell their produce. 

Three bills on Farm trade wouldn’t do away with Minimum Support Price (MSP), but rather free the farm trade from all illicit market restrictions, open the market beyond ‘mandis’ and further assists the small and marginal farmers to sell their produce at market/competitive prices.

While replying to questions on the bills, the Union Agriculture Minister Shri Narendra Singh Tomar assured that “the bill will not impact the provision of Minimum Support Price (MSP), it does not encroach on the rights of State Agriculture Produce Marketing Committee (APMC’s) and interstate trade can take place without any restriction. Further, there will be no provision of levying tax on trade beyond ‘mandis’ by the state governments and central government as well”. 

The new laws will improve market competition, terminate monopolies, help in minimising the role of middlemen and will also increase private investment in the agro-farm sector as well. New infrastructure in the farming sector will be built which will also help in generating new employment opportunities. The new reforms will also connect the small and marginal farmers with traders and big exporters, resulting in more profits for farmers without relying upon the middlemen’s illicit market demands and production share. 

The new laws will improve market competition, terminate monopolies, help in minimising the role of middlemen and will also increase private investment in the agro-farm sector as well.

Significantly, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, intends to open up agricultural sale and marketing outside the notified Agricultural Produce Market Committee (APMC) ‘mandis’ for farmers, removes barriers to inter-State trade and provides a framework for electronic trading of agricultural produce. It prohibits State governments from collecting the market fee, cess or levy for trade outside the APMC markets. 

Further, APMCs were set up with the aim and objective of ensuring fair transaction between buyers and sellers for a better price of farmers’ produce. With the new act, the objective of the government has been to assure the farmers that legislation will be “creating an ecosystem” where farmers will enjoy the “freedom of choice” to sell to anyone, anywhere in the country. This situation could be more beneficial to promote Prime Minister Narendra Modi’s visionary thoughts regarding the agricultural sector, where he intended to introduce the principle of ‘One Nation, One Market

While referring to the political debates over the bill in Lok Sabha, Prime Minister Narendra Modi, said that “the passing of the bills in Parliament was a watershed moment in the history of Indian Agriculture”. 

With the new act, the objective of the government has been to assure the farmers that legislation will be “creating an ecosystem” where farmers will enjoy the “freedom of choice” to sell to anyone, anywhere in the country.

It is expected that new reforms in the agriculture sector will add impetus to the efforts to increase farmers’ income and will ensure greater prosperity for them as envisioned by PM Modi in his statements on the bills. The new laws will take the nation and farmers on a path that will be more demand-led, inclusive, and globally competitive, directly raising the income of farmers. Undoubtedly, it will promote barrier-free inter-state and intra-state trade and commerce freed from the physical disparities of the market as notified under State Agricultural Produce Marketing Legislations. There is a strong need to understand the new acts, perhaps beyond misleading (political) perspectives. Critics must realise that as long as the market obstacles that were created by the middlemen are not removed from the development path of the farmers, then the latter will always be in debt. The new reforms in the agriculture sector will help free the farmers from the clutches of the middlemen. 

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Rajiv Chopra

Rajiv Chopra

Dr Rajiv Chopra is Associate Professor, Sri Aurobindo College(M), University of Delhi.

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