India's farming sector, which is very important to the country, is changing a lot because of three new laws called the Farm Acts, introduced in 2020. These laws aim to update the agricultural marketing system, but they have caused much debate and protests.
This guide explains the main parts of these laws, how they might affect farmers and consumers, and the ongoing discussions about these changes.
Understanding the Three Farm Acts
1. The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020:
This Act allows farmers to sell their produce outside of government-regulated Agricultural Produce Market Committees (APMC) mandis. Farmers can now sell directly to private parties (companies, wholesalers, exporters, or consumers) anywhere in the country.
The goal is to increase competition and potentially offer better prices to farmers.
2. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020:
This Act promotes farming on contract basis, which lets farmers make agreements with companies or retailers before planting. These agreements set the price and quantity of crops, giving farmers security of income and better power to bargain. It also provides a way to fix disagreements between farmers and companies.
3. The Essential Commodities (Amendment) Act, 2020:
This Act removes some important items like cereals, pulses, and potatoes from a list which limits the amount that can be stored.
The aim is to attract private investment in storage and reduce quick changes in the market. Critics worry this might lead to large corporations hoarding these items, causing price increases and shortages in supply.
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Impact on Small and Marginal Farmers
- Potential Benefits: The Acts could help small farmers get better prices by selling directly to buyers and provide income stability through contract farming.
- Concerns: Small farmers might struggle to negotiate with big companies and lack resources for storage outside mandis, which provide essential services.
Benefits for Farmers and Consumers:
- Farmers_:_ They will get more market access and potentially higher amounts of money through competition.
- Consumers: More competition could lower food prices and improve food supply stability because of better storage.
Criticisms and Concerns:
- Loss of MSP Protection: Critics think that the government might remove the Minimum Support Price (MSP) system, leaving farmers vulnerable if market prices fall.
- Dominance of Big Business: There are concerns that large companies might exploit farmers with unfair contracts and lower prices in mandis.
- Uncertain Impact on Food Security: Removing limits on the amount that can be stored could lead to hoarding and increase in price during shortages.
Key Points of Discussion:
- MSP: The Acts don't abolish MSP, but there's fear the government's commitment might weaken.
- Contract Farming: While it offers benefits like income stability, the people who are against it worry about unfair contracts and the problems in solving disagreements.
- APMC System: Bypassing _mandis _could weaken their role in trying to keep the prices fair and in standard services, and reduce state revenue.
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Farmer Protests and Movements:
- Protests and Demands: Farmers have had huge protests, demanding the taking back of the Farm Acts and guarantees on the MSP. These protests have included blocking highways, sit-in demonstrations (dharnas), and fights with police.
- Impact on Politics: The Farm Acts have become a political issue, affecting the opinion of the people and increasing pressure on the government to address farmers' concerns.
Government Response:
- MSP Assurances: The government has repeatedly assured farmers that the MSP system will continue, although many remain skeptical.
- APMC Reforms: Discussions have been held about strengthening APMC mandis by improving infrastructure and services to make them more competitive with private markets.
- Contract Farming Guidelines: The government is considering model contracts with fair terms and conditions to protect farmers in contract farming agreements.
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Frequently Asked Questions (FAQs)
Do the Farm Acts abolish the MSP system?
No, the Farm Acts themselves don't abolish MSP. However, there are concerns about the government's long-term commitment to MSP.
Can I still sell my produce in APMC mandis?
Yes, farmers can still sell their produce in APMC mandis. The Acts provide an additional option to sell outside mandis.
What are the benefits of contract farming?
Contract farming offers pre-determined prices, income stability, and access to inputs for farmers.
What are the risks associated with contract farming?
The main risks are potential unfair contract terms and a lack of bargaining power for small farmers. The dispute settlement mechanism might also be complex and inaccessible.
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Where can I find more information about the Farm Acts?
You can visit the website of the Ministry of Agriculture and Farmers Welfare, Government of India, for official information and updates on the Farm Acts.
References:
- The Ministry of Agriculture and Farmers Welfare, Government of India
- The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020
- The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020
- The Essential Commodities (Amendment) Act, 2020
Written by Saanvi Arora
As a second-year law student at IIM Rohtak, Saanvi Arora is deeply passionate about exploring the nexus of law, public policy and society. With keen interests in areas like ADR, Data Protection Law, Company Law and Public International Law, she is a curious and dedicated to understanding how legal principles impact everyday life.
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Further Reading
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