Farmer's Act 2020 - Positive and Negative Sides

Introduction
As of September 2020, the Farmer's Act 2020 contains three acts of the Parliament of India.
This bill aims to give farmers various marketing channels and to create a legal structure under
which farmers, among other things, may enter into prearranged contracts.
Protests against the acts picked up, particularly in Delhi, Punjab and Haryana, where farmers
have been at the bleeding edge.

The Acts
The three acts include:

1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020:

This act is aimed at generating remunerative rates through competitive alternative channels of
trading. This law was enacted to grant farmers freedom to sell their goods outside the notified
market of APMC (mandis). Any cessation or tax ought not be paid by farmers for the selling
of their goods under this Act.

2. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm
Services Act, 2020:

The proposed law grants farmers the right to enter into a deal with agribusiness companies,
processors, wholesalers, exporters or major retailers for the sale at a pre-agreed price of
future agricultural products.

3. The Essential Commodities (Amendment) Act, 2020:

This law seeks to remove from the list of goods essential to the imposition of stock-holder
caps on those items, except in 'extraordinary circumstances,' such as war, hunger,
extraordinary increase in prices, and natural calamity. This regulation seeks to exclude
commodities such as cereal products, oil seeds, pulses, potatoes, onions etc.

Government and Academic Responses

Prime Minister Narendra Modi referred to the bills as a hitch in Indian agriculture history and
said the bills "ensure a complete transformation of the agriculture sector" and empowered
millions of farmers.

The Chief Economist of the International Monetary Fund, Gita Gopinath, said the "farm bills
and labour bills are very important steps in the right direction. They have the potential to
have more labour market flexibility, providing greater social security to workers and more
formalisation of the labour market. In the case of agriculture, having a much more integrated
market, creating competition, having farmers getting a greater share of the price that finally
the retail price that's paid. So that helps with rural incomes". She also stressed that the
implementation of it must be right.

"The farm bills and labour bills are important steps in the right direction" said Gita Gopinath,
the Chief Economist of the International Monetary Fund. She further stated that they have the
potential to have more flexibility on the labour market, to ensure a greater social security for
workers and to further formalise the job market. She pointed out that these laws should be
implemented correctly.

Several Union Ministers urged farmers not to misinterpret the reforms. On 30th November,
the Premier stated that the farmers are being "lied" to: "the farmers are being deceived on
these historic agriculture reform laws by the same people who have misled them for
decades." Modi said that the old system has not been replaced but that new options for
farmers were being suggested. The Minister of Agriculture and Farmers' Welfare, Narendra
Singh Tomar rejected demands that the MSP be included as the mandatory provisions of the
Farm Bills, claiming that although the government has committed itself to MSP, it was "not a
part of the law".

On 31 December 2020, a resolution against farm reforms was passed by the Kerala
Legislative Assembly and its removal was sought.

On January 1, 2021, a letter was published with support for the three farm acts, signed by
scholars from several educational institutes. The Open Letter notes that these three acts
"wouldn't abolish the MSP but rather free agriculture trade from all illegal market controls,
open the market beyond the 'mandis' and further assist small and marginal farmers in
marketing and competitive prices. They "strongly believe in the government's assurance to
the farmers to protect the farmers' livelihoods"

Response from Farmers

The bills were widely protested mainly by Punjab farmers and opposition (including the
Marxist Communist Party of India (MARXIST), the Indian National Congress, and the
Bahuyan Samaj Party), as well as by a member of the ruling National Democratic Alliance,
the Shiromani Akali Dal, which said it hurt, However, the government insists that farmers
would attempt to market their goods to large buyers right away. The confusion about how the
changes will "will play out in reality" is one of the key causes of the opposition. Conflicts
over the MSPs, the impact on intermediaries, loss of state income and the low negotiating
power of farmers are just some of the fears which led to the opposition to bills.

There is a lack of legal support in the bills for the MSP, particularly for farmers from Punjab
and Haryana, which procures 65% wheat from the Indian Food Corporation and State
agencies at the MSP (2019). This is a major concern. The 1998 legalisation of the sugar
industry, opening the way for private firms, did not lead to major production or income
changes for farmers. A government-led attempt at deregulating the APMCs in Bihar in 2006
did not lead to an improvement in farmers' revenue or improved infrastructure. However, the
Shetkari Sanghatana, Maharashtra's peak party of farmers, wishes that the market plays its
part in choosing Agri commodity prices; it argues that, instead of motivating farmers, the
MSP has undermined farmers. To prevent farmers from depending on MSP, the Sanghatana
plan an upheaval that will require the government to allow farmers the freedom to intervene
in the Agri commodity market.

Bharatiya Kisan Sangh (BKS), an affiliate of RSS, has asked the government to submit the
bills to the Permit Committee on Agriculture and hastened the Government to pass the bills.

Protests
Different protests have taken place, particularly in Punjab and Haryana, in various India
states since the proposal of these laws. These were the first big farmers' protests since the
government of Narendra Modi came into power in 2014. On 26 November 2020, farmers of
Haryana were prevented by Haryana police from entering Delhi. The police forces attacked
protesters in the border close to Ambala with water cans and tear gas bombs, hurled stones
and threw police barricades into the river. A protester said that IANS would "break all the
barricades if they were not allowed to move ahead." The media claimed that police dug
trenches on some roads to Delhi; the Haryana BJP government dug the Haryana-Delhi
Highway. The road to Delhi also included sandy trucks and bulldozers. Earlier, farmers were
surrounded by the house of the Chief Minister of Haryana.

Conclusion
The bills come with their share of loopholes, despite being innovative. The government of the
Union seems to have given the states and farmers the short end of the stick by rushing
through the Parliament based on numbers.

The much-needed impetus for the realisation of the vision for change could have been
provided by a greater degree of consultation. The government has sown the seeds of
resentment by not respecting the voices of critical stakeholders and is currently faced with a
backlash.

Some states challenge the bills in the Supreme Court, while other nations attempt to override
them. The central government needs to be much more inclusive in its planning and decision-
making processes to fully change agriculture in India.

It must also ensure that farmers do not try to phase out public procurement in the form of
bills. Overall, amendments are needed before the vision can become a reality.