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The new farm laws –Tools to empower farmers directly

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Farmer is the backbone of India. India is an agriculture-based economy. India has made advances in various fields, but the condition of farmer has not improved much. The reasons are deep rooted at ground level. The pricing of crops is highly variable, inconsistent and most of the times not sufficient. For several decades there was no improvement of basic infrastructure facilities like roads, ware houses, cold storages, processing units, etc. The new technology in field of agriculture is not being utilized by farmers. The rate at which consumer buys agricultural product is many times higher than the rate at which the farmer sells. Neither the farmer nor the consumer is getting the benefit. Modi government brought the new farm laws aim at decreasing the gap between the price at which farmer sells and consumer buys, thus benefitting farmers and consumers. The new laws aim at improving income of farmers and easing the way of selling farm produce by decreasing the involvement of middlemen, various taxes, Interstate charges, lobbying of influential farmers, etc.

THE LAWS – FACTS VS MYTHS

The farmers’ Produce Trade and Commerce Act (FPTC Act)

Facts

The law aims at promoting and facilitating free trade in agriculture. Farmer can sell the produce any where all over country.

Existing systems

– The existing APMC markets are inadequate, not transparent and are handled by middle men. In many states politicians control the APMC markets. More than 50% of produce is sold outside Mandis . Farmer has to pay service charges or taxes for APMC mandis. In addition to this, farmer has also to pay commission charges to agents (Arthiyas). These charges totally vary from 1 to 8.5% depending on state.

– The farmer has to take the produce to the mandis all the way from his farm. The farmer has to bear the transport charges.

– Interstate charges will be imposed by states if farmer sells his produce outside the state.

-The farmer can not decide the price of farm produce and is forced to sell the farm produce as decided by the middle men in mandis.

-Minimum Support Price (MSP) and procurement of farm produce under MSP are administrative decisions. It was the Modi government which has increased MSP to 50% above the cost of production of crop for major crops. State governments can decide MSP for any crop including fruits and vegetables.

– It is estimated that on an average atleast 6 to 7 transactions happen before a farm produce reaches consumer from farmer.

What does the new law say?

-The FTPC act gives freedom to the farmer in selling the produce at a place and a price of the choice of farmer.

-Farmer can sell in APMC markets or outside the mandis. Farmer can quote the price for the crop. This facilitates farmer to enter free trade and increase the competitive spirit enabling a better price as in other trades. Farmer need not pay the mandi and middlemen charges.

-Aiming at “One Nation -One Market” interstate charges are removed.

– Farmer can sell the crop at any place of his choice including at the door step. Farmers need not bear transport and package charges.

– E- Commerce platforms will be developed so that farmers can sell on line to any one all over India.

– There will be regulations for those who purchase and will be regulated by the government.

Farmers’ Empowerment and Protection Agreement on Price Assurance and Farm Services Act

The act gives farmers’respect, empowerment and protection to farmers. It aims at price assurance to the farmers on farm services and contract farming.

-Contract farming has been already practiced by companies like Nestle, Pepsico etc. in some states like Punjab, West Bengal, Chattisgarh, Gujarat and Uttar Pradesh. Thousands of farmers had economic benefits and guaranteed success with such partnerships involving trade of milk, vegetables and fruits.

– The act allows contract farming all over contract with assurance to farmers on price for the produce.

– An agreement is to be made between the farmer and the private partner regarding the price to be paid to farmer prior to production itself. At the timing of selling crop if the market prices are less, the private partner cannot pay lesser price for the farmer. If the market prices are more at the time of the purchase the benefits have to be transferred to the farmer as per the agreement. Total Payment can not be delayed by more than 3 days. Farmer can decide about the  amount to be paid at the agreement time and while selling the crop.

– Private partner has to provide farm services and inputs to farmers on mutually agreeable conditions.

– Farmer can decide the quantity and type of crop to be grown. Private partner cannot decide on type or quantity of crops to be grown.

– The law protects farmers by providing methods of addressing the grievances of farmers in the law. The law enables Sub –Divisional Authority or collector or additional collector as appellate authority for resolution of problems in 30 days. If the private person fails to pay the farmer, penalty up to one and half times the due amount can be levied. The costs and long time involved in the legal process involving courts can be avoided.

-State governments can make the rules of registration of farming agreement.

– Encouraging diversification of production of crops. Wheat and rice are produced in more than required quantity in the country. On the other hand pulses , oil seeds , perishable fruits and vegetables are produced at lesser quantities than needed quantity in the country forcing us to import. This is due to some factors. One being the lack of assurance of proper price for those high-priced crops. Second one being lack of infrastructure facilities like cold storages to store the perishable crops. Third being the transport charges which small farmers to be bear for taking the small crops to mandis. The contract farming gives assurance to farmers encouraging to grow various diversified crops helping nation to attain self-sufficiency in producing crops.

– The investment in infrastructure and agriculture allied processing units will be increased with contract farming by private players. This will lead to generation of more jobs for local people. The private player will improve infrastructure like ware houses, cold storages and packing units. Food Produce Units will be developed resulting in increased generation of local food products.

Essential Commodities Amendment Act

-The amendment modified the regulation of prices of farm products like cereals , pulses , potatos, onion, edible oilseeds and oils from essential commodities list. 

– The essential commodity act was invoked very easily by governments previously to decrease the prices of farm products resulting in economic loss to farmers.

– With the amendment act can be invoked only under extra ordinary circumstances.

MYTHS and REALITIES

APMC system will not be scrapped. Private channels will there in addition to the existing APMC system. APMC is under purview of state government and they can continue mandis. Kerala and Bihar have no APMC systems. This law is not aimed at removing APMC system.

MSP will not be removed.MSP system is going to stay.MSP also can be increased for crops by state governments also.

– No mandatory requirement to do contract farming or sell to private players. Private players cannot be forced to do anything.

-The private players in contract farming have no rights over the land or assets of farmers. There is no leasing out of land of farmers.

– Farmer can withdraw from the contract farming if they find it not beneficial.

-No action against farmer or the assets of farmer can be taken under any circumstances.

– Private players will hoard food items and create price hike. This is not possible. Essential Commodities Act can still be invoked transparently in extraordinary circumstances like war, famine, natural calamities and extra ordinary price rise .There is a regulation on stock limit which is 100% increase in retail price of horticultural produce or 50% increase in retail price of non-perishable goods over last one year or average of 5 years whichever is lower.

Modi government – Pro farmers’ government

India is agriculture-based economy. Present government has emphasized a lot on agrarian sector and set a goal of doubling farmer’s income by 2022.  PM kisaan Yojana was launched through which amount of 6000 rupees was directly transferred to accounts of farmers. Pension scheme was introduced for farmers.The implementation of  “Neem coated urea” prevented hoarding of urea and easy availability to farmers. In this budget, amount of 2.83 lakhs crores was allotted for agriculture and allied industries. 16 point formula for farmers was proposed. Government kept a goal to give 15 lakh crores loans to be given to farming and allied industries. Kisan credit cards were given to farmers.  

Farm produce purchased by government drastically increased in last 5 years of Modi  government compared to 10 years UPA government

CropUnder 10 years of UPA(2004 -2014)Under 5 years of NDA (2014 to 2019)
Rice2.06 lakh crores4.56 lakh crores
wheat1.68 lakh crores2.97 lakh crores
pulses645 crores49,000 crores
Oil seeds2460 crores25,000 crores

It was Modi government which implemented Swaminathan committee recommendations to provide MSP 50% above the production cost. Modi government has been increasing MSP regularly since 2014.

MSP rates for Rabi Crops Season (All values in rupees/quintal)

CropMSP for  2020-21MSP for 2021-22Production costIncrease in MSP% of Profit over production cost
wheat1925197596050106
Barley152516009717565
Gram48755100286622578
Lentil48005100286430078
Mustard44254650241522593
Safflower52155327355111250

On PPP basis Food Corporation of India (FCI) to  build ware houses for storing farm products. Government is planning  to build a cold chain of storage for milk, fish , meat ,vegetables, fruits ,flowers etc. for  storage and easy transport of perishable goods. To achieve this more ware houses with cold storage facilities will be established. For fast transport of perishable farm products, Indian railways started kisan rails” -Trains  with cold storage facilities to transport domestically . Aviation ministry will launch “Krishi Udaan”-Aero planes with cold storage facilities to transport nationally and internationally. NABARD schemes to be expanded. Zero budget natural farming will be increased. 22.41 crore soil health cards were issued to farmers aimed at improving productivity of soil by assessing nutritional deficiencies and correcting necessary deficiencies in a scientific way. Soil health card system has resulted in decreased usage of chemical fertilizers by 8 to 10%, increased productivity by 5 to 6% and increased income by 30,000 per acre on an average.Portal for online natural organic products “Jaivik kethi” shall be strengthened. Nearly,6.11 crores farmers benefited from PM fasal bhima yojana. PM Krishi Sanchai Yojana promoted micro irrigation and farming of pulses. Solar pumps to be given to 20 lakh farmers. Solar energy production units in non-cropping rural areas shall be expanded. Measures to improve farming and water conservation in 100 water scarce districts. Integrated farming systems in rain fed areas shall be expanded. Dhanya laxmi seed banks will be started involving women. Special clusters for horticulture will be developed. Animal artificial fertilization measures will be promoted. Fisheries and exports to be promoted and youth to be trained in this aspect.

The Protests – The unanswered questions

Is there even a single point in the law which is not benefitting farmers?

Still farmers are throwing away crops on roads due to lack of proper price. What benefit did farmers get from old laws?

-The government has provided a venue with essential and medical facilities for the protesters. Why protesters have not shifted to the venue and are blocking roads?

– When the government is willing to make amendments why are farmers still protesting?

-Why the protesters are from a few states, mainly Punjab?

-Why farmers are supporting the release of Maoists like Gautam Navlakha, Sudha Baradhwaj in the protests against Farmers’ laws?

– Why the opposition leaders like Sharad Pawar of NCP , Rahul Gandhi of congress ,etc..who demanded liberalizing trade markets and scrapping APMC are opposing now?

-Leftist ruled Kerala has no APMC system. Why are the leftists opposing without implementing APMC system in Kerala?

– Why do not the protesting farmers of Punjab first cancel the contract farming with Pepsi Co, Nestle and Amul?

– Why do the protesters do such heinous activities like defacing Mahatma Gandhi’ statue with Khalistan flags ? How are Khalistan separatists related to

Farmers have some apprehensions regarding legalizing MSP, registration of private firms and exploitation by private firms. Government from the beginning was ready in engaging with farmers and was willing to make necessary amendments after discussions.The protests have become political. In some states main Political families control the APMC systems. Congress had scrapping of APMC and liberalization of agricultural market in the manifesto. It looks like they are supporting protests just to oppose Narendra Modi and be relevant in the political scenario. BJP recently winning rural panchayath elections as opposition party in Rajasthan shows that farmers in that state are not against new farm laws. Narendra Modi after becoming Prime minister in 2014 has concentrated on agriculture and brought several reforms with the aim of improving economic condition of farmers. These farming reforms helped farmers a lot. Those farmers who are protesting should realize the fact that the new laws are for empowerment of farmers and should engage with government which is extending olive branch to farmers.

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