Parliament passes The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020

Parliament today passed two bills aimed at transforming agriculture in the country and raising farmers’ incomes. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 which were passed by Lok Sabha on 17^th September 2020, were passed by the Rajya Sabha also today. The Bills were introduced in Lok Sabha on 14th September 2020 by Union Minister of Agriculture & Farmers’ Welfare, Rural Development & Panchayati Raj, Shri Narendra Singh Tomar, to replace ordinances promulgated on 5th June 2020.

Speaking about the Bills, Shri Narendra Singh Tomar said that the Government under Prime Minister Shri Narendra Modi has taken several landmark decisions in last six years to ensure that farmers get remunerative prices for their produce, and for raising farmers’ incomes and livelihood status. He again clarified that the procurement at Minimum Support Price will continue, assurance for this has been given by Hon’ble Prime Minister himself, rate of MSP has been increased considerably during 2014-2020 and MSP for coming Rabi season will be announced in coming week. The Union Agriculture Minister said that full protection has been ensured to farmers in these legislations.

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020

Main provisions –

• The new legislation will create an ecosystem where the farmers and traders will enjoy 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 cess or levy for sale of their produce and will not have to bear transport costs.
• The Bill also proposes an electronic trading in transaction platform for ensuring a seamless trade electronically.
• In addition to mandis, freedom to do trading at farmgate, cold storage, warehouse, processing units etc.
• Farmers will be able to engage in direct marketing thereby eliminating intermediaries resulting in full realization of price.

Doubts –

• Procurement at Minimum Support Price will stop
• If farm produce is sold outside APMC mandis, these will stop functioning
• What will be the future of government electronic trading portal like e-NAM

Clarification –

• Procurement at Minimum Support Price will continue, farmers can sell their produce at MSP rates, the MSP for Rabi season will be announced next week
• Mandis will not stop functioning, trading will continue here as before. Under the new system, farmers will have the option to sell their produce at other places in addition to the mandis
• The e-NAM trading system will also continue in the mandis
• Trading in farm produce will increase on electronic platforms. It will result in greater transparency and time saving

The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020

Main provisions –

• The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field. Price assurance to farmers even before sowing of crops. In case of higher market price, farmers will be entitled to this price over and above the minimum price.
• It will transfer the risk of market unpredictability from the farmer to the sponsor. Due to prior price determination, farmers will be shielded from the rise and fall of market prices.
• It will also enable the farmer to access modern technology, better seed and other inputs.
• It will reduce cost of marketing and improve income of farmers.
• Effective dispute resolution mechanism has been provided for with clear time lines for redressal.
• Impetus to research and new technology in agriculture sector.

Doubts –

• Under contract farming, farmers will be under pressure and they will not be able to determine prices
• How will small farmers be able to practice contract farming, sponsors will shy away from them
• The new system will be a problem for farmers
• In case of dispute, big companies will be at an advantage

Clarification –

• The farmer will have full power in the contract to fix a sale price of his choice for the produce. They will receive payment within maximum 3 days.
• 10000 Farmer Producer organizations are being formed throughout the country. These FPOs will bring together small farmers and work to ensure remunerative pricing for farm produce
• After signing contract, farmer will not have seek out traders. The purchasing consumer will pick up the produce directly from the farm
• In case of dispute, there will be no need to go to court repeatedly. There will be local dispute redressal mechanism.