Farm Bills 2020: Unheard Aspects

After the historic lockdown, our economy has been seriously affected, and GDP underwent a dip.  Unfortunately, COVID-19 cases are still rising, with over 92,000 lives already lost. Amidst such serious issues, the country is witnessing large scale protests over the recent bills passed in the parliament. Such objections suggest crucial communication voids between various federal layers as well as the state and the farmers. 

An Overview:

These three bills, originally presented to us as ordinances in June, were passed in both houses’ delayed monsoon session.

●        The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, allows farmers to sell their harvest outside the notified Agricultural Produce Market Committee (APMC) mandis without any State taxes or fees.

●       The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020, facilitates contract farming and direct marketing.

●       The Essential Commodities (Amendment) Bill, 2020, deregulates the production, storage, movement, and sale of several significant foodstuffs, including cereals, pulses, edible oils, and onion, except in the case of extraordinary circumstances.* 

There has been a nationwide uproar against these. For instance, a ’Bharat Bandh’ on 25 September, protests in Jajpur(Odisha) and Bangalore on 22nd September, demonstrations in Bhubhwaneshwar and Telangana on 14th Sept. On Aug 9 and 5 Sept, there were protests in 25 districts of Maharashtra, 400 villages in Andhra Pradesh, and 250 villages in Telangana. Tamil Nadu Farmers’ Association rallied in Vellore and Ranipet, where police arrested around fifty farmers. The government could have addressed their doubts and could have opened dissent, but it resorted to pushing these bills through an ordinance. Such protests suggest that people are not yet ready to accept these laws, maybe due to incomplete information or faulty provisions in the law. 

The legitimacy/constitutionality:

Before diving into the specifics of the bills that would soon become laws, let us analyze its constitutionality.

Schedule 7 of the Indian constitution establishes three lists.

●                    Union List has 97 items and encompasses the entries under the center’s jurisdiction. Union list has four places mentioning the Agriculture keyword, and in all of them, it reiterates that the Centre has no power to enact laws about it.

●                   The State list contains 66 entries on which states can make laws. Mentioning agriculture eight times gives the essence that the state government has the right to make laws about it.

●                   The Concurrent List has 47 entries on which both government and center have the power to enact laws. Entry 33 of the Concurrent List is about Trade and Commerce. Still, it is debatable to consider agriculture as trade/commerce as it is more of national service with the precedence of viewing education as an occupation. Although this entry mentions food-stuffs, extrapolating it to agriculture would essentially render agricultural entries redundant in the state and union lists.

There indeed exist overlaps in legislation due to the distribution of power. If the area is mainly in one list and incidentally pinches other lists’ entries, the law is deemed valid. In this case, this law directly, and not incidentally, affects the areas of states on which the union has no jurisdiction.

These bills can be a case related to the doctrine of colored legislation. This doctrine comes into the picture when the legislature is purporting to an act within its powers, but it has transgressed those powers in reality. It is also interesting to note that the bill’s statement of object and vision has no mention of the constitutional provision, thereby increasing suspicions on the bill’s constitutionality.

On 12 November 2019, Nirmala Sitharaman addressed NABARD’s 6th World Congress in Rural and Agricultural Finance. She mentioned that the Centre is cajoling states to ‘dismantle’ APMC Mandi system and adopt e-NAM for a better process. Ten months later, the Centre claims that it won’t dismantle APMC. It is the NRC problem all over, just more grave and more affecting. Did the Centre consider states’ views before enacting these laws? It is evident that without constitutional protections and safeguards, freedom would have no meaning. 

Issues/Concerning Aspects

People are highlighting Enough on the MSP’s issue in these bills, but that is not the end but just the tip of the iceberg. Analysis of the budget allocation on Agriculture Marketing shows a horrendous picture. Agriculture Marketing covers all agriculture activities, starting from buying seed to selling the final crop produce. In the 2018 budget, Agricultural Marketing had a share of 1050 crores, which the government finally reduced to 458 crores. The 2019 budget allocated 600 crores to it, and in the revised budget, it became 331 crores, around 50% less. The proposed law favors the development of private mandis that will not have taxes, unlike their government counterparts, but why will there be no tax? It is undoubtedly predictable that mandis with taxes will automatically fade away silently, similar to the share of agricultural marketing in the budget.  

The Mandi system is one of the central structures in the agricultural system today. It works around a phrase popularly called as the Mandi Mantra “Fair Price, Precise Weight, and Cash Payment.” Places where Mandis is regulated unbiasedly, farmers get an essential benchmark. It is no lie that the Mandi system has widespread corruption and increasing political influence with flaws in both infrastructure and processing. The government is introducing schemes like e-NAM and GRAM-scheme to enhance the Mandi system. But suppose we believe that outrightly abolishing mandi is making farmers independent! In that case, we prevent farmers from getting one primary benchmark and alleviating the insurance of minimum and fair prices.

Reforms in agricultural markets are incomplete without taking into account the report by the Swaminathan Committee in 2006. One of its significant suggestion was that instead of having various taxes, Mandis should have a single service tax. The revenue hence generated should be used to enhance the market infrastructure. It also suggested establishing Mega markets, outside the purview of the APMC act, near big cities. It also clearly mentions that if the primary products have no tax, then the APMC Act and Market committees would automatically end. It again raises a question on the government’s intention to abolish the Mandis system when claiming not to remove it.

The report by a permanent committee of Agricultural Ministry dated 12 Dec 2019 argued that our country needs an Agricultural Market within every 80 sq. km. In contrast, the current situation is one agricultural market every 469 sq. km. There is a need for an additional 41,000 such markets to meet the requirements. Did the government make any new such markets?  It is a pity that such questions never reach the mainstream.

Another significant issue is concerning the redressal system introduced. This bill establishes A Reconciliation board with both farmer and company representatives. It aims to settle all disputes within this board. In case of no settlement within 30 days, then the case would go to SDM, whose order would be equivalent to a civil court order. One can finally appeal to the Collector/appointed officer within 30 days, and this order would be equal to a civil court order. Simply, these disputes won’t go to civil court. If a collector can falsely impose NSA on some Dr. Kafeel Khan, can we expect that collector will safeguard farmers’ rights in front of corporate giants? Not to forget that we often see our prime minister and other prominent ministers in newspapers with big corporates.

An increase in the number of private players in agricultural markets is one outcome. Farmers in Punjab have already been into contracts with companies like Pepsi. The media observed that a company could enforce their part because they have legible legal aid, government backing, and resources, leaving the farmers to suffer due to a lack of these. Companies had previously rejected the farmers’ produce in the name of quality parameters and forced them to sell their produce at highly reduced prices. The contract should be between two equivalents or requiring the law to protect the meek, which this law does not seem to be doing. 

In conclusion, many doubts and misinterpretations are floating around, with incomplete information from the government’s side. This provision has a fragile legal base, which can be intensely argued, and it undermines its credibility on its face. This bill reduces the farmers’ legal protection and increases their vulnerability and exploitation by big corporates, large farmers, and even by the government. The farmers face potential and permanent loss of their autonomy. It is now an inherent duty of the government to come forward, contrary to its general practice, and organize a press conference to address the farmers’ issues. 

By Rehan Kunal Jagota

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