The Farmer's Produce Trade and Commerce Act, 2020: Everything you need to know about the new agriculture reforms 2020 in India

In this blog post, I have mentioned three agriculture Bills passed by the Indian Parliament which later received Presidential Assent to become Acts.

The Farmer's Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 is an act of the Indian Government that permits intra-state and inter-state trade of farmers’ produce beyond the physical premises of Agricultural Produce Market Committee (APMC) Market yards (mandis) and other markets notified under state APMC Acts.

Farm Act 2k20- An Objective Analysis

On 27 September 2020, President Ram Nath Kovind gave his assent to the three 'Agriculture Bills' that were earlier passed by the Indian Parliament. These Farm Acts are as follows:

1- Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020.

2- Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020.

3- Essential Commodities (Amendment) Act, 2020.

👉 An Objective Analysis

1- Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 :

Citation: Act No. 21 of 2020

Territorial extent: India

Lok Sabha: The Bill was introduced in Lok Sabha on 14 September 2020, passed in Lok Sabha on 17 September 2020. 

Rajya Sabha: It was passed in Rajya Sabha on 20 September 2020. 

Presidential Assent: The Bill received Presidential Assent on 27 September 2020. 

Introduced by: Minister of Agriculture and Farmers Welfare, Narendra Singh Tomar.

1- Background: On 5 June 2020, the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 was promulgated by the Union Cabinet. 

2- Act: It permits intra and inter-state trade of farmers’ produce beyond the physical premises of Agricultural Produce Market Committee (APMC) markets and other markets notified under the state APMC Acts. 

3- Provisions:

👉Trade of Farmers' Produce: The Act allows the farmers to trade in outside trade area such as farm gates, factory premises, cold storages, and so on. Previously, it could only be done in the APMC yards or Mandis.

👉Alternative Trading Channels: It facilitates lucrative prices for the farmers via alternative trading channels to promote barrier-free intra-state and inter-state trade of agriculture produce.

👉Electronic Trading: Additionally, it allows the electronic trading of scheduled farmers’ produce (agricultural produce regulated under any state APMC Act) in the specified trade area. It will also facilitate direct and online buying and selling of the agricultural produce via electronic devices and the internet.

👉Market Fee Abolished: As per the Act, the State Governments are prohibited from levying any market fee or cess on farmers, traders and electronic trading platforms for trading farmers’ produce in an 'outside trade area'.

Christianity in India- by Sandeep Panchal

2- Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 :

Citation: Act No. 20 of 2020

Territorial extent: India

Lok Sabha: The Bill was introduced in Lok Sabha on 14 September 2020, passed in Lok Sabha on 17 September 2020. 

Rajya Sabha: It was passed in Rajya Sabha on 20 September 2020. 

Presidential Assent: The Bill received Presidential Assent on 27 September 2020.

Introduced by: Minister of Agriculture and Farmers Welfare, Narendra Singh Tomar.

1- Background: On 5 June 2020, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 was promulgated by the Union Cabinet.

2- Act: It creates a national framework for contract farming through an agreement between a farmer and a buyer before the production or rearing of any farm produces.

3- Provisions:

👉Farming Agreement: The Act provides for a farming agreement between a farmer and a buyer prior to the production or rearing of any farm produce.

👉Minimum Period of Farming Agreement: The minimum period of the farming agreement shall be for one crop season or one production cycle of livestock.

👉Maximum Period of Farming Agreement: The maximum period of the farming agreement shall be five years. It also states that if the production cycle of any farming produce is longer and may go beyond five years, the maximum period of farming agreement may be mutually decided by the farmer and the buyer and explicitly mentioned in the farming agreement.

👉Pricing of Farming Produce: The pricing of farming produce and the process of price determination 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.

👉Settlement of Dispute: The Act provides for a three-level dispute settlement mechanism-- Conciliation Board, Sub-Divisional Magistrate and Appellate Authority.

3- Essential Commodities (Amendment) Act, 2020 :

Citation: Act No. 10 of 1995

Territorial extent: India

Status: Amended

Lok Sabha: The Bill was introduced in Lok Sabha on 14 September 2020, passed in Lok Sabha on 15 September 2020. 

Rajya Sabha: It was passed in Rajya Sabha on 22 September 2020. 

Presidential Assent: The amendment received Presidential Assent on 27 September 2020.

1- Background: On 5 June 2020, the  Essential Commodities (Amendment) Ordinance, 2020 was promulgated by the Union Cabinet.

2- Act: It is an act of Indian Parliament which was enacted in 1955 to ensure the delivery of certain commodities or products, the supply of which if obstructed owing to hoarding or black-marketing would affect the normal life of the people. This includes foodstuff, drugs, fuel (petroleum products) etc.

3- Powers of Central Government:

👉The Government of India regulates the production, supply, and distribution of a whole host of commodities it declares ‘essential’ in order to make them available to consumers at fair prices.

👉The Government can also fix the MRP of any packaged product that it declares an 'essential commodity'.

👉The Centre can add commodities in this list when the need arises and can take them off the list once the situation improves.

👉If a certain commodity is in short supply and its price is spiking, the Government can notify stock-holding limits on it for a specified period.

4- Powers of State Government: The respective State Governments can choose not to impose any restrictions as notified by the Centre. However, if the restrictions are imposed, traders have to immediately sell any stocks held beyond the mandated quantity into the market. This is done to improve supplies and brings down prices.

5- Amendment: With the amendment in the Act, the Government of India will list certain commodities as essential to regulate their supply and prices only in cases of war, famine, extraordinary price rises, or natural calamities. The commodities that have been deregulated are food items, including cereals, pulses, potato, onion, edible oilseeds, and oils.

6- Stock Limit: As per the amendment, the imposition of any stock limit on agricultural produce will be based on price rise and can only be imposed if there's-- a 100% increase in the retail price of horticultural produce and 50% increase in the retail price of non-perishable agricultural food items.

7- Calculation: The increase will be calculated over the price prevailing immediately preceding twelve months, or the average retail price of the last five years, whichever is lower.

(It is to be noted that these restrictions will not be applied to stocks of food held for public distribution in India.)

Conclusion:

Hence, the new Farmers bill will be a Boon for the economy and any loopholes will be addressed by the experts and the policymakers.

Next blog will be on "Why are Indian farmers protesting?" and "MSP (Minimum support price)"... Stay connected... ✍️

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