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Gist of Rajya Sabha TV : Agriculture Reforms

  • Published
    29th Sep, 2020

Introduction

In a latest development, Rajya Sabha passed three bills related to Agriculture Sector Reforms namely-

  • The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
  • The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020
  • The Essential Commodities (Amendment) Bill, 2020

Why RSTV? Operated by Rajya Sabha, RSTV provides critical analysis of important topics which are in news. It not only update aspirants but helps in intellectual growth of the mind. Here, we are providing Gist of Rajya Sabha TV discussion on ‘Agriculture Reforms’.

Topic relevance from RSTV Debate on ‘Agriculture Reforms’ for UPSC: Direct questions can be asked on:

  • Details of the Ordinances
  • Provisions of ‘market fee’
  • Reason behind the opposition
  • Possible benefits of the Bill

EDITED EXCERPTS FROM THE DEBATE

Background

  • The three Bills on agriculture reforms – The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020; The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 and The Essential Commodities (Amendment) Bill, 2020 were introduced in the Parliament to replace the ordinances issued during the lockdown.
  • The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 are passed in the Rajya Sabha.

What the important provisions in the Bill?

  • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020
    • The Ordinance allows intra-state and inter-state trade of farmers’ produce outside: the physical premises of market yards run by market committees formed under the state APMC Acts and other markets notified under the state APMC Acts.
    • It opens up agricultural sale and marketing outside the notified Agricultural Produce Market Committee (APMC) mandis for farmers.
    • It provides a framework for electronic trading of agricultural produce.
    • The Ordinance prohibits state governments from levying any market fee, cess or levy on farmers, traders, and electronic trading platforms for trade of farmers’ produce conducted in an ‘outside trade area’.
  • The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020
    • The Ordinance provides for a farming agreement between a farmer and a buyer prior to the production or rearing of any farm produce.
    • The minimum period of an agreement will be one crop season, or one production cycle of livestock. The maximum period is five years, unless the production cycle is more than five years.
    • The price of farming produce should be mentioned in the agreement. For prices subjected to variation, a guaranteed price for the produce and a clear reference for any additional amount above the guaranteed price must be specified in the agreement.
    • A farming agreement must provide for a conciliation board as well as a conciliation process for settlement of disputes.
  • The Essential Commodities (Amendment) Ordinance
    • Removes cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. The amendment will deregulate the production, storage, movement and distribution of these food commodities.
    • The central government is allowed regulation of supply during war, famine, extraordinary price rise and natural calamity, while providing exemptions for exporters and processors at such times as well.
    • Imposition of any stock limit on agricultural produce must be based on price rise. A stock limit may be imposed only if there is a 100% increase in retail price of horticultural produce; and a 50% increase in the retail price of non-perishable agricultural food items.

Why are these bills being opposed?

  • Direct encroachment of States’ rights: Since agriculture and markets are State subjects entry 14 and 28 respectively in List II, the ordinances are being seen as a direct encroachment upon the functions of the States and against the spirit of cooperative federalism enshrined in the Constitution.
  • Dismantling of MSP: Farmers are apprehensive that once these bills are passed, they would pave the way for dismantling of the minimum support price (MSP) system and leave the farming community at the mercy of big corporate.
  • Exploitation by private houses: The Price Assurance Bill, while offering protection to farmers against price exploitation, does not prescribe the mechanism for price fixation. There is apprehension that the free hand given to private corporate houses could lead to farmer exploitation.
  • Removal of important commodities: The Essential Commodities (Amendment) Ordinance removes cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities.
  • Risk to food security: Easing of regulation of food items would lead to exporters, processors and traders hoarding farm produce during the harvest season, when prices are generally lower, and releasing it later when prices increase. This could undermine food security since the States would have no information about the availability of stocks within the State.

What are the possible benefits from these various acts?

  • Freedom of choice: Farmers and traders will enjoy freedom of choice of sale and purchase of agri-produce.
  • Barrier free trade: New legislation will promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations.
  • Reduced marketing cost: It will reduce marketing costs for the farmers and help them in getting better prices.
  • Better price: It will also help farmers of regions with surplus produce to get better prices and consumers of regions with shortages, lower prices.
  • Attracting investment: It will act as a catalyst to attract private sector investment for building supply chains for supply of Indian farm produce to national and global markets, and in agricultural infrastructure.
  • Empowering farmers: It will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field without any fear of exploitation.

Conclusion

The reforms of 1991 came out of various committee reports through the 1980s – Abid Hussain committee, Narasimhan committee, Dagli committee and many others that recommended all those changes. Though it was done in a dramatic manner, the ideas were not last minute thinking. Similarly, here too a lot of work has been done and case for reform of the APMC was made by economists during the Manmohan Singh government, especially the former Planning Commission member, the late Saumitra Choudhuri.

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