NEW DELHI: Three recently enacted core farm laws, which have implications across India, are at the center of strong opposition that has now drawn non-NDA political parties from across the country to the farmers’ side stirrers. Although the government has tried to explain how these laws will ultimately benefit farmers, farmers’ unions are hell-bent on repealing them, pointing to certain loopholes and their apprehensions. Here are the key provisions of the laws, the doubts (raised by farm unions and some states), and the gist of the government’s explanation to farmers during five rounds of talks:
1. Law on trade in agricultural products
Key provisions:
* Create an ecosystem where farmers and traders will enjoy the freedom of choice to buy and sell agricultural products.
* Promote interstate and intrastate commerce without barriers outside the physical facilities of ‘mandis’ (agricultural markets), notified under the State Agricultural Products Marketing Committee (APMC)
* Farmers will not be charged any fees or charges for the sale of their products and will not have to bear the transportation costs
* Farmers will have the freedom to trade on farm, cold storage, warehouse and processing units in addition to mandis
* Farmers will be able to participate in direct marketing thus eliminating intermediaries that result in the full realization of the price
Farmers’ doubts:
* Acquisitions will be stopped at the Minimum Support Price (MSP)
* Mandis will stop working if agricultural products are sold outside of APMC mandis
* Businesses will eventually dominate agricultural markets and dictate the prices of agricultural products.
* Loss of revenue for the states if the trade shifts out of the mandis (this is up to the states)
* Traders can easily mislead farmers and default on farmer payments
Governor’s explanation:
* Acquisitions in MSP will continue
* Mandis will not stop working and trading will continue there as before
* Farmers will have the option to sell their produce elsewhere in addition to the regulated mandis.
* Trade in agricultural products will increase on electronic platforms
* Govt. is ready to amend the law where equal taxation for APMC mandis and private markets to provide a level playing field for trade
* The law can be modified to register all merchants with their verified data on the portal.
2. Law on contract farming
Key provisions:
* Train farmers to contract with processors, wholesalers, aggregators, large retailers and exporters at a previously agreed price
* Price guarantee for farmers even before planting crops.
* In case of a higher market price, farmers will be entitled to this price above the MSP
* Transfer the risk of unpredictability of the market from the farmer to the sponsor (farmers will be protected from the rise and fall of market prices due to prior price determination)
* Allow farmers access to modern technology, better seeds and other inputs.
* An effective dispute resolution mechanism has been provided with clear deadlines for redress.
Farmers’ doubts:
* Farmers will be under pressure and will not be able to determine prices under contract farming.
* Small and marginal farmers will not be able to practice contract farming as sponsors will walk away from them.
* Large companies will have an advantage in case of disputes
* Difficult for farmers to approach SDM court for dispute resolution
Governor’s explanation:
* Farmers will have full powers in the contract to set a sale price of their choice for the product.
* 10,000 Agricultural Producer Organizations (OPF) are being formed across the country (the OPF will bring together small farmers and work to secure remunerative prices for agricultural products)
* There will be a local dispute resolution mechanism and it will not be necessary to go to court repeatedly in case of disputes
* Govt. is ready for amendment, allowing a higher court of appeal
3. Act of the Essential Products Act as amended
Key provisions:
* Eliminate basic products such as cereals, legumes, oilseeds, edible oils, onion and potatoes from the list of essential commodities: means that the law will eliminate the imposition of storage limits on these products, except in “extraordinary circumstances” such as wars and natural calamities.
Farmers’ doubts:
* The price limits set for “extraordinary circumstances” are so high that they will probably never be activated
* Large companies will be free to store any quantity of food products, which means that they will impose conditions on farmers on the prices of agricultural products.
Governor’s explanation:
* The removal of the stock holding limit will attract private investment to the agricultural sector, as it will eliminate investors’ fears of excessive regulatory interference in their business operations.
* Private investment will be made to create infrastructure such as cold rooms and warehouses, and modernize the food supply chain.
* It will create a competitive market environment and avoid wastage of agricultural products due to lack of storage facilities.
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