Indian economy is an agricultural-based economy. This sector accounts for more than 50 per cent of employment and nearly 15 per cent of Gross Domestic Product. This indicates that there is a need to improve efficiency of this sector. The production in the agricultural sector was sound despite disruption in other sectors of Indian economy due to COVID-19. Country achieved good progress in the agricultural sector and achieved total self-reliance in food grain and other agricultural production areas. But, the condition of most of farmers is still below satisfactory, due to which successive government came into power on the plea of improving farmers condition and income.
After independence farmers were free to sell their produce in the market. But keeping in mind the dynamics of farming, requirement of capital, lack of storage, vagaries of weather and other factors led to exploitation of farmers in hands of traders. Therefore, the government brought APMC Act and Mandi's were established to get better crop. However, this system was also exploited by traders by cartelization and therefore a system of Minimum Support Price was introduced.
The present government came up with a new promise to double the farmer's income and therefore 3 farmers bills were passed as an ordinance by the President.
a). The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020:
Under this farmers were given free hand to sell their produce to highest bidder anywhere. Thus, a farmer can explore more avenues to get a better price for their produce. However, technically unsavvy small farmer may find it difficult to get benefit out of this act. Rather, they may get exploited by traders due to lack of MSP.
b). The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020:
Under this act, farmers can do contract with big traders to sell their produce at a fixed rate. On the face, it looks very good however in case of rise in price farmers will be at disadvantage. Illiterate or less educated farmers may not be able to read the fine prints. Poor legal knowledge of contracts and complicated mechanism of redressal will put farmers at loss in case of any breach.
c). The Essential Commodities (Amendment) Ordinance 2020:
Under this government has the power to declare some commodities as essential commodities and to regulate its supply by banning its hoarding. However, the government is planning to remove some of farm produce items from this list, which will encourage big traders and corporates to regulate the supply and pricing of these products. It will put farmers and consumers under mercy of traders.
Though the aim of the government is betterment and upliftment of farmers but in all these acts the uneducated and poor farmers will be at loss. They may be puppets in hands of big business houses. Some of the State governments like Punjab has passed bills to ensure MSP. Formulas suggested by Swami Nathan should be adopted to determine MSP. It will also affect the economy of the state as they will lose the revenue from Mandi’s and there is a need to iron out these lacunas so that traders do not exploit gullible farmers and consumers.
Written By Ms. Anukriti Sharma, BA LL.B (3rd year), University of Petroleum and Energy Studies, School of Law, Dehradun, Law Intern at S. Bhambri & Associates (Advocates), Delhi.