Two new bills relating to agriculture and farmers were introduced in June and were passed by Rajya Sabha on 23rd September 2019. Those agricultural bills are-
- 1. The Farmer’s Produce Trade and Commerce (Promotion and Facilitation Ordinance, 2020)
- 2. The Farmer’s (Empowerment and Protection) Agreement on Price Assurance and Farm.
These bills will impact the farmers, the consumers, the state and the middlemen established in the APMC system.
The Farmer’s Produce Trade and Commerce bill aims to create an ecosystem where the farmers are free to sell their produce wherever and to whomever they want to, which directly paves way for the establishment of inter and intra state trade of farmers produce. The same is protected under the second bill as mentioned above which makes rules and regulations for empowering farmers to trade with various businesses and wholesalers.
However, it doesn’t repeal or replace the previously established system which is under the Agriculture and Produce Marketing Committee Act. Hence, the bill is creating a choice for the farmers to carry out their trade on their will.
In the previous APMC act, the farmer had to go through the “Mandis” as established in the act after which the commission agents would take their produce for traders to auction and purchase. The auction has to necessarily start at the Minimum Support Price which is decided by the Government of India. This price is decided for certain products only and this provision has not been repealed in the new ecosystem. The commission agents collect a market fee, cess and other taxes which are then collected by the State Governments which forms a huge part of their revenue.
These bills address the issue of monopoly established by the traders through APMC. But the problem or difficulty with the bill is that it will be beneficial only if implemented effectively and if practiced by the farmers; given that they are aware of the same. Educating farmers about their rights and making them aware is an important part of the implementation process.
Apart from that, the removal of middlemen will definitely benefit the consumers since the products will be comparatively cheaper.
However, this bill will largely affect the State Revenue since they will not be receiving any taxes in the new ecosystem. Even though the bill aims to benefit the farmers, the view of the states was not considered appropriately and the states were not even given a fair participation in the Rajya Sabha where they protested against the bill.
A potential solution to that could be that the bills be introduced to a Select Committee which consisted of agricultural experts and the opposition being given a chance to be heard.
In that manner, the bill could have been speculated so as to benefit all and be compatible with the federal structure of the constitution and thereby upheld the democratic process of making a legislation.