Farm Act Reforms 2020
- 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
- The Essential Commodities (Amendment) Bill, 2020
Union Minister of Agriculture & Farmers’ Welfare: Farmers will now have freedom for direct marketing of their produce and will be able to get better prices, MSP procurement system will continue, consumers will also benefit
The reforms will accelerate agricultural growth through private sector investment in building
agricultural infrastructure and supply chains for Indian farm produce in national and global
markets, create employment opportunities and strengthen the economy
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
Farmers in India suffered from various restrictions in marketing their produce. There were restrictions for farmers in selling Agri-produce outside the notified APMC market yards. The farmers were also restricted to sell the produce only to registered licensees of the State Governments.
Further, Barriers existed in free flow of agriculture produce between various States owing to the prevalence of various APMC legislations enacted by the State Governments.
This legislation is a historic-step in unlocking the vastly regulated agriculture markets in the country. It will open more choices for the farmer, reduce marketing costs for the farmers and help them in getting better prices.
It will also help farmers of regions with surplus produce to get better prices and consumers of regions with shortages, lower prices.
Benefits
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. This is a historic-step in unlocking the vastly regulated agriculture markets in the country.
It will open more choices for the farmer, reduce marketing costs for the farmers and help them in getting better prices. It will also help farmers of regions with surplus produce to get better prices and consumers of regions with shortages, lower prices. The Bill also proposes an electronic trading in transaction platform for ensuring a seamless trade electronically.
The farmers will not be charged any cess or levy for sale of their produce under this Act. Further there will be a separate dispute resolution mechanism for the farmers.
One India, One Agriculture Market
The Bill basically aims at creating additional trading opportunities outside the APMC market yards to help farmers get remunerative prices due to additional competition. This will supplement the existing MSP procurement system which is providing stable income to farmers.
It will certainly pave the way for creating One India, One Agriculture Market and will lay the foundation for ensuring golden harvests for our hard working farmers.
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020
Indian agriculture is characterized by fragmentation due to small holding sizes and has certain weaknesses such as weather dependence, production uncertainties and market unpredictability.
This makes agriculture risky and inefficient in respect of both input & output management. This legislation will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs.
It will reduce cost of marketing and improve income of farmers. Farmers will engage in direct marketing thereby eliminating intermediaries resulting in full realization of price. Farmers have been provided adequate protection. Effective dispute resolution mechanism has been provided for with clear time lines for redressal.
Benefits
The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field without any fear of exploitation. It will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs. It will reduce cost of marketing and improve income of farmers.
This legislation 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. Farmers will get access to technology and advice for high value agriculture and get ready market for such produce.
Farmers will engage in direct marketing thereby eliminating intermediaries resulting in full realization of price. Farmers have been provided adequate protection. Sale, lease or mortgage of farmers’ land is totally prohibited and farmers’ land is also protected against any recovery. Effective dispute resolution mechanism has been provided for with clear time lines for redressal.
The Essential Commodities (Amendment) Bill, 2020
Minister of State for Consumer Affairs, Food & Public Distribution: This bill will create a positive environment not only for farmers but also for consumers and investors
Legislation will help in more investment in cold storages, modernization of food supply chain, bringing price stability, create competitive market environment and prevent wastage of agri-produce
While India has become surplus in most Agri-commodities, farmers have been unable to get better prices due to lack of investment in cold storage, warehouses, processing and export as the entrepreneurial spirit gets dampened due to Essential Commodities Act.
Farmers suffer huge losses when there are bumper harvests, especially of perishable commodities. The legislation will help drive up investment in cold storages and modernization of food supply chain.
It will help both farmers and consumers while bringing in price stability. It will create competitive market environment and also prevent wastage of Agri-produce that happens due to lack of storage facilities.
Benefits
The Essential Commodities (Amendment) Bill, 2020 seeks to remove commodities like cereals, pulses, oil seeds, edible oils, onion and potatoes from the list of essential commodities.
The EC (Amendment) Bill 2020 aims to remove fears of private investors of excessive regulatory interference in their business operations. The freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector/foreign direct investment into agriculture sector. It will help drive up investment in cold storages and modernization of food supply chain.
The Government, while liberalizing the regulatory environment, has also ensured that interests of consumers are safeguarded. It has been provided in the Amendment, that in situations such as war, famine, extraordinary price rise and natural calamity, such agricultural foodstuff can be regulated. However, the installed capacity of a value chain participant and the export demand of an exporter will remain exempted from such stock limit imposition so as to ensure that investments in agriculture are not discouraged.
The amendment is required to prevent wastage of agri-produce due to lack of storage facilities. The amendment will create a positive environment not only for farmers but also for consumers and investors and will definitely make our country self-reliant. The amendment will strengthen the overall supply chain mechanism of the agriculture sector. It will also help to achieve the government’s promise to double the farmer’s income by promoting investment in this sector and promote ease of doing business.
