n September 27 2020 the Indian farm reforms (2020) were passed by the parliament. These Bills are as, Farmers produce and trade and commerce Act (promotion and facilitation) Act, the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, he Essential Commodities (Amendment) Bill, 2020. All three bills have come into heavy criticism from the oppositions and the farmers. The farmers have accused the central government of giving more power to the big corporations and will eventually let farmers suffer. But these bills are somewhat controversial and will need some understanding. Opposition parties have also cached up on this issue and supported farmers protest over this issue. But what are they bills and who they do benefit.
1) Farmers produced and trade and commerce Act (promotion and facilitation): This is the one of the three Acts which has been passed by the parliament. As we know farmers sell their produce in the local mandi when the crops are ready. As per the new law farmers will have the freedom to sell their crops anywhere and they will not be restricted to only mandis or APMC. This allows farmers to expand their market and they won’t be restricted to mandis or APMC and there shall be no extra cess on it. It will have significant benefits for farmers as they can sell their produce in different markets as per their needs and wishes. It will
allow interstate trade without any barriers. But as farmers move there trade out of APMC zones states are bound to lose revenue at and not only states but commission agent will lose their share.
But the bigger picture is about MSP (minimum support Price). Most of the protest that has been going on has revolved around the MSP. MSP is the minimum price at which government procures or buys directly from the farmers. MSP is very essential as it allows farmers to sell to the government if the prices in market are quite low or there has been a bad harvest. It ensures farmers get a decent rate for their produce. As of now government has set the price of 23 commodities. MSP is set on the recommendation of the panel of commission for agricultural cost and prices (CACP).
When this bill was passed the farmers feared that it will eventually lead to the end of MSP based procurement system and monopoly by corporate and exploitation of farmers. But as farmers move out of the Mandis states will lose a lot of revenue which they used to collect in the form of mandi tax. Also commission agents will lose their share of profit. But what farmers fear is that this bill would eventually lead to the end of MSP and big corporation will have more power eventually leading to the exploitation of farmers.
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2) The farmers (empowerment and protection) agreement of price assurance and farm service bill, 2020: The law is aimed at providing farmers the choice of entering in a contract with the buyer, wholesaler, exporter, retailer for the sale of future produce at a pre exiting price. The minimum period of the farming agreement shall be one crop season or one production season. The maximum period for the farming agreement shall be five years. It gives farmers a feeling of reliability as it allows them to safeguard themselves from the market risk. It also allows them to get a greater income by reducing the cost of marketing. What farmers fear is the eventual exploitation of them by the big corporation? It will weaken the voice of farmers and big corporation can bind them to such contracts from which they can never escape. They fear that they may end up in bonded labor my big corporations just like what moneylender their workers do.
3) The essential commodities (amendment) Bill, 2020: This legislation seeks to remove commodities like cereals, pulses, oilseed, onion, potatoes, from the list of essential commodities and will do away with imposition of stock holding limit on such items except under some special circumstances like war. It allows one to stock up as much as possible. But what does it mean. Supermarkets and corporate firms in the business can stock up; this will reduce the supply in the market while the demand stays the same. This will drive the price up — more demand causes people to drive the prices higher as they want the goods and they are willing to pay more if they are able to get it. The corporate will then release their stock when the prices are higher. Make a profit and essentially drive down the price. So yes, it will affect you as your food might get more expensive and as a chain reaction everything will become expensive. The main aim of this bill was to attraction as much as foreign direct investment(FDI) which would help to bring price stability in the market.
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