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| generated by AI for illustrative purposes only |
By now there has been a lot of drama about what the farming bills are and how will they turn out to be, will they be good or bad, well the debate of morality and other angles can creep in when we have an elaborated debate but when we look at them from the point of whether or not will they benefit few people or a community, on the whole, we need to closely look at the language of the bill and analyses it being unbiased, just see them as they are, apply logic and come to a detailed conclusion. Let us see the pros, cons, and domino effect of these laws on all the segments of society.
Each bill/act has 3 facets: the producer (farmers), the consumer (the end-user/common man), and the middle man (the profit-earning parties, aka companies). These are the main groups, and there are many subgroups in them which can be again segregated into a much detailed format. Let’s have a deep look into each law individually and as a whole package.
Farmer’s produce trade and commerce (promotion and felicitation) Act 2020
Various chapters of the act deal with various issues of the farmers, the first chapter, as usual, is the definition and the second one deals with the promotion and felicitation of trade and commerce of the farmers, the govt may make any law or may introduce any kind of scheme to make it easy for the farmer to sell his product out of APMC including online platforms (APMC included, it is not excluded anywhere in the whole law)
· Special care is taken about the payment where chapter 2 section 3 clearly says that the payment shall be done either on the same day or within 3 working days of the procurement of the goods from the farmer which means the farmer will not have to wait for long durations to get the money from the vendors. Also, the next section, i.e., 4 carves, rules how inter-state and intra-state trade will be conducted.
· Gives the government power to make rules regarding how the online and offline trades will take place, what documents are needed, etc.
· This act prohibits any kind of cess or entering fee to be taken from farmers in any form to participate in the act, unlike the APMC act, where the farmer needed to pay an entering fee; this also applies to the state laws.
· Give power to the govt to develop “Price information and market intelligence system for Farmers’ produce” (many such apps are already available)
Chapter 3 talks about dispute resolution matters.
· In case of any dispute raised between both the parties, they may mutually solve the matter or ask the assistance of the Sub-Divisional Magistrate, in latter’s case the SDM will subject them to a conciliation committee consisting of not less than 2 members and more than 4 members, a representation will be asked by both the parties and if both the parties fail to give any representation within 7 days then SDM is allowed to select people he/she deems fit.
· In any case, if the settlement is done, then a settlement memorandum will be signed, which shall be binding on both parties
· Further, the bill lays rules that if the matter is not resolved within 30 days then the dispute is sent to other higher official and the act clearly states that in any condition the parties cannot reach court for their resolution which means this is out of the jurisdiction of the civil court (section 15)
The parties cannot file a case against any state or central government agency or employee, as these are done in good faith. (Really? Is this a rhetorical statement?)
The bill, in its last section 17, describes and lists out 6 major reasons where it has the power to make laws and regulations, and in the 7th subsection, it adds and any other matter the government deems fit to make or craft a law.
Pro
· Many provisions of this act are pro-farmers, like making a competitive market for farmers and removing the monopoly of the market from APMC to other partners, both private and government.
· The payment clause added that payment must be done within 3 working days is just a blessing for the farmers as they would be able to clear their debts within a short period, hence reducing the rate of farmers going bankrupt.
· Opening national portals and regularising them through forums like ENAM -the electronic national agriculture market.
Cons
· There is no proper mechanism to fix a price per crop on a particular season, though the price may vary on many factors with no guidelines of price fixation there will be cartels/private lobby which would do it to exploit the situation and make more profit, which again will drag the farmers to the old condition where they were exploited in the worse possible ways.
· Tough the bill attempts to resolve the matter in the minimal time frame possible but it ends up making it more complex, apart from creating multiple complex incomprehensible layers for the farmers (for whom ironically these laws are made) they will eventually with time become a tool of harassment in the hands of kleptocrats and the elite corporate houses.
· The biggest con of this act is that it fails to create a better dispute resolution mechanism, it creates space for the corrupt bureaucrats to make money by taking huge sums to alter decision in favor of one party (in any case the party which has more cash to offer), it is also imperative to note that which such a dispute resolution and no provision to reach court for a better hope of justice the corporate will try to exploit the farmers in the worse possible ways.
A question is often asked why do we demonize the corporate houses and say that they may exploit the farmers, to them there is a classic example of Pepsi vs farmers in 2019, Pepsi sued farmers of Gujarat over some issue which related to potatoes which were grown in India but were genetically modified by the company and they had a patent on the seed, but this case gives us an inside view of what would happen if corporate houses are left to exploit the system and farmers. Luckily, the court intervened and the judgment was passed in favor of the farmers in their favor, while Pepsi was being ruthless and asked to pay a penalty of 25 lakhs to each farmer.
Effect on the end-user
The bill will have a devastating effect on the end-user as there will be no regularization of prices and we all know how capitalists and the corporate houses have been in the past and now, they always try to milk as much profit as they can, we have seen this is various cases in the past (Farmers Vs Pepsi 2019) and the price difference between the MSP provided to the farmers and the price of the end product (the price of wheat is somewhere between 15-20 rs/kg and the final product i.e., wheat flour is sold at a whopping rate of 40rs/kg). Wheat being a small example, imagine what this could do on a large scale when these corporate houses try to make a deal which can be similar to the monkey’s paw?
Second bill
Farmer’s (Empower and protection) agreement on price assurance and the Farm Services Act 2020
As usual, the bill first talks about the definitions and meaning of the terms used in it in the first chapter of the act, and later elaborates on the farming laws and how an individual or party may enter into a farming law and what the outcome will turn out to be.
Pros
· The compliance with the law falls on the third party of the agreement, ie, the corporate houses or the sponsor, as to speak.
· The agreement is valid till one crop cycle, and in case the cycle is more than 5 years, then a negotiable time may be decided with mutual consent between the farmer and the sponsor.
· The product quality is to be decided, and a guaranteed price is to be fixed accordingly. In case there is a variance in the price of the crop, then that also has to be paid in addition to the price guaranteed earlier, referenced from the APMC yard or online trading information platforms.
· The onus of delivery and its arrangements falls on the sponsors and not on the farmer; the sponsor needs to arrange all the required infrastructure and logistics needed to transport the crop. One-third of the amount must be paid in advance, and the rest in less than 30 working days. (the catch here is when the payment is done, a slip or recipe of payment has to be generated and hence the payment done is taxable under the GST regime, presently farmers are not taken into any tax regime with the implementation of this law all kinds of farmers will directly come under income tax act)
· The farmer cannot indulge in any kind of lease, mortgaging, sale, or transfer of land under these contract farming laws, which also prohibit any permanent change on the land (the government tried to protect the lands of farmers from the corporate houses from their nefarious and tricky contracts).
· The farming agreement is linked to any state/central/private insurance, financial service provider (making sure no one is at loss, we already have these types of insurance schemes working to ensure the safety of farmers, though only less than 5% of the farming population has access to it)
· The contract can be terminated anytime with the mutual consent of the two parties.
· No amount can be recovered from a farmer in any case (section 18)
Cons
· No proper dispute mechanism, the farmers cannot reach out to the courts for dispute resolution; all the powers similar to a civil court are granted to the sub-divisional magistrate/authority. (section 18,19)
· Growing consumerism will die with such laws, as big corporate houses will kill all the small farmers as well as start-ups and create a monopoly over this sector, as well as killing the competition, which cannot be allowed in the big market ecosystem of this nation.
· The multiple layered dispute resolution system will end up harassing the illiterate farmer as he/she will also have to employ someone with good knowledge in law to represent him/her in the so-called court of law (which in this case is the sub-Divisional magistrate/authority/appellant authority creating and extra burden of expense on the farmer.
End user
With this law in place the market of middle men will be completely wiped out meaning the whole produce will be introduced in the market through all the big corporate houses which also means that there would be no wholesale markets, no outlets with such a condition there is a huge chance that the big giants may exploit this situation to create a monopoly in market and push users to buy these goods in higher rates, there is no price capping mechanism devised by govt. And with an amendment in the Essential Commodities Act, the govt has made sure that it won’t interfere in the prices if it weren’t for certain conditions as famine, inflation, emergency, etc. With such ambiguous laws and policies framed on such flimsy ground, there is a huge risk to each segment of society.
The essential commodities act 2020 (amendment)
The essential commodities act makes a detailed list of items whose pricing would be controlled by the govt in any conditions as they are essential for the survival of a common man in any condition, but the amendment instead of adding items removes all the items from the essential commodities list including cereals, potato, lentils etc, the act says that the govt will be able to take control and regularize the price of these items in case of emergency, famine, inflation etc.
Conclusion
The combination of these three laws can be deadly and can be termed as profiteering to the big corporate houses which are seeking an opportunity to milk profit from the presiding condition, implementing these laws together would be a deadly concoction which would create a situation which may lead to a situation where the farmer would not be able to buy the end product of his raw material.
The combination of these laws will make the end-user the profit-making segment for the corporate houses, since, there is no regulation or market pricing system on crops and their products till now, this segment of the community will be milked in all possible ways through increased profits and over-exploitation of prices, the food security bill may then be rendered as redundant as a large chunk of farms would be controlled by big corporate and these houses being capitalistic would not believe in public services until CSR is imposed on them and we all are well aware of the fact that CSR laws have been weakened by the center in past few years, there is no reason to believe that the common man or the poorest rucks of our society would not suffer from the implementation of these laws.
The corporate houses will earn 3 folds once these laws are implemented, the first segment they will earn from would be the farmers. They will buy these goods from the farmers in lowest possible price and that would be possible because there is no pricing system regulated for devised by GOI till date, the second segment is the huge customer base which will practically include every one in this nation, with huge corporate houses owning large chunk of the produce there are chances they may hold a monopolistic right over the prices and hence they may sell it at the prices they wish to and that will again be possible as govt has stop regulation of prices of goods and crops even that of the essential commodities which opens the way for these corporate houses to exploit the customer section of the society. Other most profiteering segment would be the govt itself, to run the food security and community kitchens govt will have to procure the goods from the corporate houses and in such cases the govt will end up paying much more money that it presently pays to run these schemes (this is a speculation based on the fact that corporate houses will act aggressively and not let the govt have either a small chunk of the farm produce).
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