Farm Laws 101
By: The News Story
Tags: Farmers, Agriculture, News, Protest, Policy

Farm Laws 101

How things worked

Agricultural Produce Market Committees (APMC), set up by various states in the country, were essentially where the farmers’ first sale of agricultural produce happened. These “mandis” were instituted in an effort to protect farmers from exploitation by large retailers. The produce collected at the mandis were then sold out by auction. The mandis operated on the sale of produce at/above MSP or the Minimum Support Price, fixed by the government, twice a year, for every crop with recommendations from the Commission for Agricultural Costs and Prices (CACP). MSP has historically protected the farmers from the fluctuating market rates and the unpredictable monsoons by promising a minimum income on their produce.

The laws

The Essential Commodities Act 2020 amends the Essential Commodities Act, which was initially established to regulate the supply of foodstuff, fuel, and drugs against the backdrop of hoarding or black-marketing. The new amendment act delists certain commodities, allowing for their regulation only during a natural calamity, war, or super-inflation. The Farmers’ Agreement on Price Assurance and Farm Services Act 2020 provides a legal structure for farmers to engage with retailers on a contract basis and details a dispute resolution procedure. The Farmers’ Produce Trade and Commerce Act 2020 allows farmers to work outside the framework of the mandis, sell their produce to retailers not restricted to their trade areas, and promotes e-trading. It doesn’t allow state governments to collect cess or fees from the farmers, traders, or online retailers on this produce.

What’s happening

The farmers from Punjab and Haryana had been protesting against the farm reforms, touting them to be “anti-farmers” and suggesting that these laws would leave the farmers at the mercy of large money-minded corporates. In line with their protests, the farmers of Punjab staged a “Rail Roko” for almost a couple of months, disrupting the supply-chain of agricultural goods and produce from within and outside the state. While there was a shortage in the supply of fertilizers and other necessities, the piling up of food grains that couldn’t be transported also caused trouble in terms of their storage. Consequently, mission rail roko had to be aborted. Following this, on failing to get the support of their state governments, on 25th November, these farmer unions decided to pressurize the Centre by marching to New Delhi (“Delhi Chalo”). These protesting farmers clashed with the police, at Haryana’s border and within Delhi, who then employed the use of water cannons, tear gas, barbed wires, and sand barriers to stop the protesters, causing at least three casualties. Notwithstanding the police’s measures, the farm unions reached the national capital demanding to repeal the laws. While talks are still on between the farmer unions and the Union Ministers, a consensus is yet to be reached with the Centre proposing to amend the laws and the farmers unwilling to compromise for anything short of repealing the laws.

Photo Credit: PTI

As many as 500 farmer unions are protesting all over the country, with 2–3 lakh farmers converging along the borders of the NCR, and many transport unions representing truck, bus, and taxi drivers coming out in support of these farmers, threatening to stop their services if these farmers are not heard.

What needs to be understood

While the first two laws do not particularly concern the farmers, it is the third law that has caused this ugly upheaval. The FPTC Act, prima facie, should be welcomed by the farmers because it weeds out the middlemen at the mandis; but the farmers look at it as a path for the government to back away from the MSP-based procurement system. Although the government says that it has no intention to do so and will continue procuring their produce, and if so, the farmers question the necessity of such a law in the first place. The APMC mandis acted like a cushion for the farmers, buttressing their livelihoods during the uncertain market and monsoon trends. Subjecting the farmers to the vagaries of competitive markets with storage and contract related issues would leave them beholden to the monopolies of large corporates.

But why are only farmers from Punjab staging these protests?

The states of Punjab and Haryana are highly dependent on the Indian government to procure their grains at the MSP. About 90% of rice and wheat produced in Punjab is procured by the government, with the Public Distribution System (PDS) being the lifeline of this North Indian state.

Rice Procurement as a percentage of Production in different states

Rice Procurement by the GOI from different states

Government’s Obligations

The government needs to procure the produce from these two states just as much as these states need the government to do so, if not more. This is because of its obligations under the PDS and National Food Security Act (NFSA). Support under the NFSA is a legally binding right. There are around 80 crore beneficiaries, with almost 60 lakh beneficiaries being added this year due to the coronavirus pandemic. This year nearly 51 million tonnes of rice and 40 million tonnes of wheat have been procured (most of it from Punjab), more than 15 and 14 percent respectively, over the last year to account for the migrants displaced due to the Covid-induced lockdown. This is about 44% of the total rice produced and 37% of the total wheat produced in the country. Thus, the government needs to procure in large quantities from these farmers because it cannot afford to go to the open market where the prices will immediately skyrocket.

It might seem that the government rushed into passing these laws without having consulted farm unions or having drafted a very well laid out plan, and there also arises the question of federalism. Agriculture is essentially a matter of the states, and many experts, including the farmer unions and the opposition parties, think that the government has overstepped with the passing of these laws. But it is clear that doing away with the procurement system will serve no good to either the farmers or the government. It is, therefore, imperative that the government resolves the issue and puts an end to the ongoing crisis at the earliest.

Glossary

Written by- Chinmayi Lanka

Analysis by- Vignesh Vasudevan

Illustration by- Sai Krishna