|Analysis Report: The Comprehensive Policy Analysis Report includes a Research Article elaborating the contentions in regard to Farmers Protest due to 3 newly introduced farm laws. The report exams the validity of law and puts a light on events in regard to the same. |
Project Head: Ayush
Research Associate: Sukhman Tiwana; Nikita Vishwakarma; Raunak Chaturvedi
Research Assistant: Surbhi Tyagi
India is currently witnessing an upsurge in the agitations and protests by the farmers against the farm laws that had been introduced by the government of India. According to the farmers, the laws are single-handedly made for the benefit of the corporations, overlooking the benefit of the farmers.
Whereas according to the government of India, the new farm laws are indeed created for modernizing and to improve the economic condition of each farmer but the protestors are totally against and also included the stance that the government had not consulted the farmers once before signing the laws in the action.
WHAT ARE THE FARM LAWS?
The following section talks about these farm laws in detail taking into account the points of advantage and disadvantage.
- THE FARMERS PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION) ACT 2020
The protesters are going up against the three laws, the first is the Farmers’ Produce Trade and Commerce (Promotion and Facilitation bill), according to this, it will allow the farmers to deal directly with corporations and buyers.
Main provisions of the Act:
- The new legislation will create an ecosystem where the farmers will enjoy the freedom of choice of sale and purchase of agri-produce.
- It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations.
- The farmers will not be charged any levy for the sale of their products and will not have to bear transport costs.
- The Bill also proposes electronic trading in transaction platform for ensuring seamless trade electronically.
- In addition to mandis, freedom to do trading at farm gate, cold storage, warehouse processing units, etc.
- Farmers will be able to engage in direct marketing thereby eliminating intermediaries resulting in full realization of price.
Areas of contention
- Since 85- 90% of the farmers own less than 2 hectares of land, and exposure to big corporates who have more bargaining power will make it difficult for them to negotiate.
- There are Apprehensions that Alternative Private Mandi will lead to the ultimate closure of existing APMC Mandi.
- No tax on Private Market.
- Elimination of Middlemen causing a threat to their livelihood due to their major involvement. The scrapping of Mandis will endanger the jobs of millions of workers/laborers who work there.
- Even if offered, small farmers may find it difficult to avail better prices at distant markets due to constraints of travel and storage expenses. Also, there was no restriction on farmers to sell elsewhere earlier too.
2. THE FARMERS (EMPOWERMENT AND PROTECTION) AGREEMENT ON PRICE ASSURANCE AND FARM SERVICES ACT, 2020
This Act in detail provides for a written agreement to be entered into by a farmer to sell his produce to a service provider or ‘Sponsor’, as referred to in the legislation, at mutually agreed rates. Indeed, this is one of the three controversial pieces of legislation, still, we need to see whether it is harmful or not.
Main provisions of the Act
The following points were found out to be in support of the Act and to be supportive for the farmers:
1. Section 3 of the Act clearly states that a farmer may enter into a ‘written’ farming agreement. Hence, this being stated, it will not only provide for a better record for the farmers to keep in terms of the terms and conditions of the agreement but will also help to ensure that the farmers are not cheated, as they would now be able to enforce their contractual rights in case of a breach of contract in a stronger manner than ever before.
2. Under this particular Act, the concept of A.P.M.C.s, or Agricultural Produce Market Committee has been removed. This means that now a farmer is open to sell his produce to any person, company, or even export the same, directly without any middlemen, or hindrance, whatsoever. This may be stated as an agrarian liberalization and globalization initiative, whereby the farmers are allowed to participate in the economy more openly and truly fulfill our nation’s name of being known as an ‘agrarian economy’.
3. There are many Sections in the Act which state that the expenses are to be borne by the Sponsors and not by the farmers. Almost all of the time, the responsibility has been shifted upon the Sponsor within the legislation. For instance, Section 6 of the Act pushes the responsibility of the ‘timely and proper delivery of the goods’ upon the Sponsor and ensures that the Sponsor pays a minimum amount as prescribed for the agreement to be entered into. These transactions are going to be accompanied by the production of a receipt by the Sponsor, which the farmer will keep for further references.
4. Section 9 of the Act is interesting and important, as it mentions that the agreement to be entered into, under no circumstances, shall include or shall be entered into for the sale, mortgage, or leasing of the farmer’s land to the Sponsor or anyone, thus protecting the farmer lands.
5. Another important feature that the Act provides is that digital trading and record-keeping platforms are to be introduced. For our convenience, we may see that Section 12 does provide for the State Governments to establish electronic registries, to ensure that the farmer’s agreements are also within the records of the Government authorities.
6. A well-defined dispute resolution and conciliation mechanism has been mentioned within the Act, in case any dispute arises between the farmers. Considering the amount of time taken by normal Courts to adjudicate a matter, it was thoughtful to introduce the concepts of conciliation and dispute resolution mechanisms into the same. Section 13 particularly deals with this aspect of the Act.
7. Last but not least, we may see that now the farmers can get the required price at the time of delivery and have the assurance for the same by getting a receipt.
Points of Contention
1. Removal of A.P.M.C.s is particularly a bit problematic because, in the existing system, the farmers were at least able to sell their products with a surety that it will get purchased by default, even though at a lower price. But now they would be dependent upon entering into farming agreements. Hence, whether someone would agree with them all the time or not, is a question of fact.
2. The Act for the first time defines force majeure. Now, it is a bit confusing because it uses the terms like ‘bad weather’ because of which the crops may be destroyed and hence may lead to the recission of the contract. Now, in the case of India, such conditions are pretty common, especially in the Rajasthan area. Hence, this clause would inherently detriment the farmers as whenever there will be a loss, they would not get anything.
3. The quality, standards, and other details, which are to be decided, shall not be decided by the farmers. It shall be upon the Central or the State Governments or their agencies to decide upon the same.
4. Another very important point is that the Central and State Governments and other authorities have been provided with an immense immunity whereby they won’t be sued for anything done in ‘good faith’.
3. THE ESSENTIAL COMMODITIES (AMENDMENT) ACT, 2020
The ECA, 2020 also became the ground of farmers protest due to the following reasons.
Main Provisions of Act
ECA, 2020 has added a sub-section (1) under section 3 of the Essential Commodities Act, 1955. The important highlights of this amendment include: –
- The central government will be regulating the supply of certain food items (cereals, pulses, potatoes, onions, edible oilseeds, and oils) only under extraordinary circumstances like war, famine, extraordinary price rise, and grave natural calamities.
- The stock limitation will be bought into action when the rise in retail price is 100 % for horticulture products and a 50 % rise in retail price for non-perishable products.
- The Public Distribution System (PDS) has been exempted from these provisions
Points of Contention of ECA Act, 2020
FIRSTLY, section 3 of the act states that stock limit will not be applied to any ‘value chain participant’ of any agricultural produce which involves ‘processing, packaging, storage, transport, and distribution, where at each stage value is added to the product’ (ECA, ACT 2020). If seen historically and economically this act was meted out when our country was going through a continuous phase of food shortage and famines and we were forced to import food grains from outside so to prevent the illegal hoarding of the imported agricultural grains this act was enacted in 1955 and at present if this act is not going to impose a stock limit on the value chain participators then won’t this clause be simply giving a push to hoardings like practices or even black marketing of the foodstuff?.
SECONDLY, the statement of objects and reasons mentions that this act was hence passed when the parliament was not in session as the pandemic situation prevailed and the government saw the immediate need to revamp the farming structure, ‘to boost immediate investment in this sector’. But the issue which arises here is that why such important legislation was passed without consulting the farming community in the first place?
- BRIEFING THE EIGHT ROUNDS OF TALKS
The eight rounds of talks between the leaders of the participating farmer unions and the government have failed to end the deadlock, with the farmers sticking to their demand for the repeal of the three farm laws.
In the first round of talks, demand was put forth for repealing the farm laws and the Electricity Amendment Act, 2020, legally ensuring government procurement on minimum support price, withdrawal of the Electricity (Amendment) Bill, 2020, withdrawal of cases registered against activists and protesters, and implementation of the Swaminathan Commission report to fix MSP with C2+50 percent formulae. This was followed by the second round of discussion between the parties in which the Union Agriculture Minister Narendra Singh Tomar tried to avert the fears of the farmers regarding the dissolution of MSP by assuring that the MSP regime is here to stay, though it cannot be legally added into the law.
In the third dialogue, the Centre offered to set up a five-member committee consisting of officials, agrarian experts, and farmers’ leaders to analyze the agricultural laws and resolve grievances that the farmers rejected. Instead, they called for a special session of Parliament to repeal the laws. In the fourth set of discussions, the farmers remained adamant on their demands leading to the continuation of the deadlock. As the farmers braved water cannons, cold waves, and rain, the fifth round of talks presented a glimmer of hope as the government welcomed suggestions of some 40 farmer’s unions to safeguard APMC mandis, create a level-playing field with proposed private markets, and strengthen dispute redressal mechanism.
Unlike the previous rounds of talks, positive development followed the sixth round of talks as the issues related to stubble and electricity were resolved. However, the seventh round failed to be much successful as the two parties held on to their positions related to the MSP regime and the repeal of the laws. The unions held the Centre responsible for the lack of progress and accused the government of its lack of willingness to find the solution. The recently held eighth discussion proved to be inconclusive as the government virtually ruled out repealing the act and farmers stuck to their key demands, stating that ‘Ghar wapisi’ will happen only after ‘law wapisi’.
The uproar against the farm laws has been largely concentrated in the Northern belt of the nation’s particularly in the states of Punjab and Haryana because the procurement system and MSP mechanism are stronger here than in any other state. The MSP mechanism is neither equitable nor adequate in providing remunerative prices to all types of farmers thus explaining the silence of the farmers from the other parts of the nation.
Latest Update: the 10th round of talk concluded on 20th Jan. 2021 and next meeting is scheduled on 22nd Jan. 2021. There are possibilities that the government might suspend these amended laws for 18 months (1.5 Years).
4. SUPREME COURT’S INTERVENTION
Supreme Court in Rakesh Vaishnav and Ors. V. Union of India and Ors has ordered for the formation of a committee to conduct effective negotiations comprising of four people- Shri Bhupinder Singh Mann, National President, Bhartiya Kisan Union, and All India Kisan Committee; Dr. Pramod Kumar Joshi, Agricultural Economist, Director for South Asia, International Food Policy Research Institute; Shri Ashok Gulati, Agricultural Economist and Former Chairman of the Commission for Agricultural Costs and Prices and Shri Anil Ghanwat, President, Shetkari Sanghatana.
The court allowed all the impleadment and stay applications. It said that ‘Although the Attorney General is right in saying that the Court shouldn’t grant a stay upon the three Acts, as no specific provision has been challenged by the farmers as to be unconstitutional, hence indicating towards the constitutionality of the legislation, yet, the Court is not completely powerless to grant a stay on any executive action done under any statute.’ And The learned Attorney General even contended that a banned anti-India organization ‘Justice for Sikhs’ was supporting the farmers and trying to create havoc.
4. GLOBAL REACTION TO THE PROTEST AND THE FARM LAWS
The United Kingdom, Canada, and even the United Nations showed reactions to the ongoing protest in India over the new farm laws. According to the United Nations Secretary-General, Antonio Guterres stressed that the Indian government should allow farmers to protest as their right. Another major criticism came forward by the Canadian Prime Minister Justin Trudeau when he tweeted about the farmer’s protest which was indeed considered by India as ‘unwarranted remarks’.
As a repercussion of the Prime minister’s tweet, Canada’s high commissioner to India was summoned to the ministry of external affairs and stated that the two countries could have a fall in the bilateral relations if there is any interference in the internal situations of India. Canada is much involved in showing criticism towards the new law and providing support to the farmers because of its strong ties to Canada. It is estimated that about 1.3 million Indians are residing in Canada according to the statistics.
Further, major criticism that has come forward against the farm laws are from the United Kingdom. Many Sikhs and Punjabis in the UK have taken the issues to their respective MPs in the United Kingdom. Other than some of the organizations based in the UK held a rally in London. A crowd converged on the Indian embassy and the groups marched around the Trafalgar square to show agitation towards the farm laws brought in by the Indian government. The protests are indeed more prominent in the United Kingdom because of the large Indian Diasporas who trace their family roots to India.
The agriculture sector is the largest private sector of the Indian economy but it’s a contribution to the economy is declining and there are no second thoughts to the fact that our Agri-sector was in dead need of new reforms but the way these three reforms have been introduced without any prior consultation with the farming community is a major setback. The three contentious farm laws have become the hotbed of dissension between the protesting farmers and the central government. Now with the intervention of the Supreme Court, the implementation of the Farm Laws has stayed till the time a common ground is not reached between the Government and the protesting farmers. There are certain provisions under these laws which will promote liberalization and globalization of the agrarian economy thus definitely help in increasing the income of the farmers but there are certain clauses that are quite troublesome and might worsen the things at the farmer’s end, which include provisions related to force majeure, quality standards, removal of APMC and no fixation of Minimum Support Price. Ongoing protests are a major landmark in the history of the world and these laws and decisions will be defining the future of the 70% of the Indian population which are directly and indirectly dependent on agriculture for their livelihood so it’s important for the government to act in compliance with the wishes of the farmers and farmers at their level should to analyze the pros and cons of the Farmers Acts instead of falling on the deaf ears and should try towards finding a common ground of acceptance at the dialogues.
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FEATURED IMAGE SOURCE: https://www.freepressjournal.in/india/do-farm-laws-2020-remind-you-of-east-india-company-and-contract-farming