What is really happening with the farm bills?

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On June 5, the central government rolled out three farm ordinances which have invited a major backlash from several farmer outfits across parts of Punjab, Haryana and UP. The most recent developments include the resignation of SAD MP and Food Processing Minister, Harsimrat Badal and passing of the new Farm Bills in Rajya Sabha. But why are the farmers against these new laws?

Let’s understand!

The Farm Reform

  1. Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance 2020
  2. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020
  3. Essential Commodities Ordinance 2020

In practice, the three ordinances:

  • Give farmers access to trade areas and traders beyond the notified APMC markets* without any license or paying any commission
  • Support the marketing freedom by formalising and regulating contractual farming and dispute settlement mechanisms
  • Regularize essential items and frees traders from arbitrary stocking limits

*Agricultural Produce Market Committee (APMC) market is a state-run market to ensure fair prices and a regulated marketplace for farmers’ produce.

Government’s Verdict

One Nation-One Market

Why are the Farmers Unhappy?

They’ve garnered immense support from Akali Dal, who want to protect their large farmer vote-bank.

Bigger Issue for Small Farmers

The small farmers constitute more than 70% of all farmers in India and are often landless. Without MSP, these farmers would be exposed to aggressive pricing of an open market, leading to compromised sales, losses, debt and landlessness. Although the ordinances talks about a support price for farmers, the issue around MSP lacks clarity.

The Arhtiyas Angle

The reforms were welcomed by many western states where the commission agents are low in number. Does it mean these protests are largely an act of resistance to change?

It is clear that these ordinances are passed in the right spirit. The mindset to remove restrictive regulatory laws from agricultural framework is needed to uplift the farmers and to open the market. What we also need are improved logistics, farmer-friendly infrastructure, easy access to formal capital, assured sustainable pricing, investment in state-of-the-art technologies and assistance in diversifying crop produce to support the farmer community from ground-up.

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