Today I will drag your attention towards the most discussed topic related directly to farmers, we will look at the farm bill merits and demerits, why farm bill is necessary, farm bill ka sach
For more details
Lets dive in deeper
Agriculture law withdrawal PM Narendra Modi
The farmers have been demanding the withdrawal of agriculture law bills including all three farm laws. Farmers were frozen in the capital of India on the Delhi border for more than 15 months for this farm law cancellation demand.
Today (19.11.21) PM Narendra Modi in his address to the nation finally announced the withdrawal of all three agriculture law bills. Modi said process of withdrawing these laws will take place in the parliament this month.
Indian Prime Minister Modi appealed that farmers should return to their homes. Lets understand what are these law's and why was these laws being opposed by the farmers. Merits and demerits of these laws are also explained below.
What are the three farm laws
Three acts by the government
- The farmers produce trade and commerce promotion and facilitation act 2020 (krishaj upaj vyapar or vanijya - sanvardhan or sarlikaran adhiniyam, 2020)
- The farmers (Empowerment and protection ) Agreement on price assurance and farm services Act, 2020
- The essential commodities Amendment Act, 2020
Before discussing the acts it is necessary to understand the concept of concurrent list
Agriculture terms and conditions- Concurrent list
Agriculture under state before 1954
Under state list entry no. 14 Agriculture has mentioned that means subject related to agriculture belongs to the state government it covers all the topics related to agriculture including contract farming etc.
Entry no.26 27 also falls under the state list, entry number 26 belongs to T & C it means trade and commerce within the state. Trade means all the efforts that include buy and sell, in this all the business including sales tax falls.
Under entry 27 production, supply, distribution of goods and services consists. All these entries 14, 26 and 27 come in Rajya soochi.
According to the state list entry number 14, 26 and 27 state has all the power over agriculture.
Here you have to understand the concept to get the power of land reforms Jawahar Lal Nehru brought an amendment in 1954.
To understand that amendment one can see the concurrent list (samvarti soochi) entry number 33 in which it is mentioned that production, sales, distribution, trade and commerce can be performed by the state government and the central government as well and sub-points of the samvarti soochi denotes that the governments have all the rights related to the agriculture.
It means both the governments; central and state have the power over agriculture. This can create a contradiction and to avoid the contradiction, it is written before entry number 26, 27 subject to the provisions beneseants in the entry 33 of the concurrent list
We will look at the first act in detail
Let's break the topic to better understand -
- Farmers produce
- Trade and commerce
- Promotion and facilitation
This is the language of every government, whenever they introduce something they work hard on the language and always try to deliver impressive dialogues to impress the people.
- Farmers produce - here farmer produce means just not only all those people who produce various crops including fruits, vegetables, flowers, lentils etc it also includes those people who produce fish, milk, milk products, animal dairy etc. Here farmer does not denote only those people who produce grains it also denotes the people who are in the business of animal husbandry. However, we can see the people who are protesting are mostly the people who produce crops; wheat and rice.
- Trade and commerce - Trade and commerce of farmers products could be implemented. Commerce contains all the professional activities and trade holds a place in it. For example, a person has purchased a few tomatoes from a farmer at the price of Rs 15 and sells them in the mandi at the price of Rs 20. In mandi it sells at the price of Rs 26 this is called trade or trading. Whereas commerce includes all activities like conveyance of auto, use of polythene bags or sacks while purchasing grains etc.
In simple words all the activities related to trading is called commerce and all the activities related to buying sell is known as trading.
3. Promotion and facilitation - To Promote farmers products including trade and commerce it also provides the facility of comfort or any help by the government.
In simple words, the motive of this law is farmers can easily sell their products (crops, grains) so that they can get good benefits.
Let's identify what the act is trying to say
Trade areas outside A.P.M.C - APMC means Agriculture produced market committee (samiti)
Meaning of APMC
APMC is also known as vegetable mandi in various states like Haryana, Punjab it is also known as baazar samiti, krishi samiti. Earlier farmers were permitted to sell their crop in the APMC of the particular state only; every state has its own mandi. Earlier neither farmer can sell their crop outside the mandi's(APMC) nor anyone can purchase their product outside the mandi, buying and selling of the crops outside the mandi falls in the list of crime.
It was a system that has protected farmers from sahukaar's but they still became a victim in mandis due to the traders. Although the mandi system was much beneficial for them in protecting from sahukaar pratha. But in both, case farmers were the victim.
What does the new APMC law says
According to the APMC 2020 farmers have the choice to sell their crop outside the mandi as well, which was a crime in previous APMC law. They have options of trade areas like farmers gate means where the farmer has produced the crop just outside that boundary or beside that anyone can purchase it directly from the farmer.
Any factory owner can directly purchase it from the farmer like if a factory of pickle needs lots of mangoes now that owner can directly purchase the mangoes from the farmer and it gives the farmer two choices whether he wants to sell it to the factory or mandi.
This law also open ups the gate for cold storage business, warehouse, factory. A good point of this law is farmer gets various options to sell the product.
APMS act - earlier
According to the act farmer can sell their product within the state in their own APMC they can't sell their crops to another APMC of the same state and in a different state as well it seems to be illegal activity. P
In the current law it is permitted to sell their first product (grain) intrastate or inter state.
Here a question raises if a person who produces pens, clothes, leather, wood, paper, shoes, clock, goggles, pencil, plastic, polybags etc can sell their product to other states then why farmers can not sell their grains to another state or different mandi's. Moreover one nation one market is good thought. One must have the right to sell the product anywhere in the country.
Earlier we all have to pay for incoming calls as well. Then we were charged for trunk calls later we were charged for roaming's at that time we were also treated as victims but time has changed and now we have to pay only for outgoing calls which is understood the same thing is happening with farmers when they were restricted to sell their own product.
Online trading - What the government has suggested to farmers that they can use the platform of online trading for fast and better results. It will increase b2b growth rate means business to business.
Benefits of online trading
Lets better understand it with a relevant example :
In online trading farmer and consumer, both can use the facility of the app in which farmer can put the value of the product by his own choice and need. It will work as similar to share market and this list of crops will flash on-screen with the selling price so the consumer can purchase it directly.
For example, a consumer from Bangalore can directly purchase 100 kg of potatoes from the farmer of Uttarakhand. Why farmers cant sells their products.
It is really a big question, just think why mobile recharge was so expensive (not talking about mobile) for more than 10 years. For the internet, we have to pay extra it was more than the double amount we have to pay earlier but still mobile companies are running means they didn't collapse!
No state taxes - According to this bill state government can't implement any tax on the trading areas.
Dispute settlement mechanism - SDM will be in charge of the disputes.
Why APMC was established
Earlier the main role behind forming APMC was to protect farmers from sahukar's which was good. In this format, farmers have to sell their first crop within APMC. You must have heard the word aadhati or aadhtiya basically it is used for the commission agent according to some people this protest is mainly of the protest of these commission agents (aadhti) but the fact is that these aadhati also belongs to a farmer family.
These aadhti has license and farmer have to sell their product through these aadhti only they can't sell their product direct to any wholesaler. What is meant by minimum support price.
Benefits of APMC
MSP is one of the major advantages of APMC it means they have to follow the minimum support price given by the government. Aadhti is one of the local and trustworthy so it reduces the chances of disputes.
Problems of APMC
- The major problem is the monopoly system it is not good for healthy competition.
- Oligopoly is a major problem in this system. Aadhties are limited because its difficult to achieve license now suppose if there are ten wholesalers they can manipulate aadhti easily because of their less numbers in this case farmer have to bear the loss because fruits and vegetables do not fall in the category of MSP. This is called cartel and cartelization is the biggest drawback of the APMC
- Cascading- It contains market fees which are 3 % in states like Punjab, Haryana etc. Some taxes lies in cascading which causes costliness.
gehu ka bhav. What is sustainable development.
Maharashtra, Bihar, Karnataka, Delhi are the few states where current law is already implemented and they are doing quite well. Infect according to one survey last year transaction of Maharashtra was 48,000 crore from APMC and 12,000 crores from others it means still 75 % of work is being done by APMC system but a choice is being given which good for consumers because of healthy competition.
Merits of the Act
- B2B possibilities- Business to business possibilities -- by online trading, using app, online participation.
- Interstate - Uttarakhand farmer can sell fiddlehead ferns in Rajasthan, Udisa farmers can sell grains to Kerala.
- Better competition - For better quality better competition is necessary.
- Innovations - In this farmer can use research technique At least farmer kids are a new generation so they can research by testing their soil and then they can choose the crop they can also research for the high demand crop they can use various nutrient techniques. They can implement organic farming on a vital scale.
Demerits of the Act
- APMC might close permanently - It may happen because of the tax relaxation in another trading area. When a farmer will get relief from market fees, SES and other tax then why he will go to APMC.
- The people who are working in APMC for a long time there must be another option for them as well. You can't remove people suddenly so before changing the system these people aadhati and others should get some other option to survive.
- Judicial support- Because in this act SDM is responsible for solving dispute problems hence government may misuse it because SDM is bound to obey instructions from the government. Therefore the Court should be involved in this for transparent judgment.
APMC - Level playing
Although government want to encourage the farmers by implementing the new act. But need to understand, one can not change anything overnight. However, it can help lots of farmers but at the same time it can discourage plenty of people so patience is necessary while implementing such a big move.