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Farm Laws

Introduction

Farmers are significant member of the society. They are the foundation of our economy. More than 15 of India’s GDP accounted by the agriculture industry. They are the hand that feed the nation and they often termed “Ann Datta”.

The lacuna with the existing structure is that farmers have been facing hardship from late 1800, issues such as overproduction, low selling price, high transportation charge and growing debt. The existing MSP depends on middle men, commission agent and red tapism of the APMC. Average farmer finds it difficult to sell there procure to the mandies.

The newly enacted farm law have empowers farmers to trade across state and this provides an ecosystem where both farmer and trader will enjoy freedom of choice of sale in procuring of agricultural goods

Farmers of Punjab and Haryana called out these act as ‘sell out to the corporate interest

The three bills are –

  • Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill‘, 2020 – ‘One Nation-one market’ concept was introduced to allow farmers to sell the produce anywhere in the country.

  • Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill‘, 2020 – Contract farming empowers farmers to engage with wholesalers, exporters etc. so that they will get the price assurance before sowing the crop.

  • Essential Commodities (Amendment) Bill‘, 2020 – This bill removed pulses, oilseeds, onions and some other products from the essential commodities list, and thereby the restrictions on the storage of these items will be removed.

PRO of the bill

  • “One Nation one market” is the proposed policy of the government. The present structure penalized setting of “competitive market” and this became a barrier for the farmers to sell at a higher rate and it is also a healthy completion in which sole beneficiaries are the farmers. This structure eliminates the middle men so that farmer gets complete monetary benefit of their production.

  • In some state there is a surplus of food and vegetables and whereas in some there is more supply and less demand, so the presently proposed structure will bridge the gap and will benefit both the consumer and the producer.

  • It will attract private investment in the field, more flow of the FDI will result in better infrastructure which in turns modernized the sector and this will ensure better price for farmers. They may even come to the farmer to procure there harvest which will help farmers to save on their transportation charge

  • Contract farming will be helpful as the farmer will get price assurance before hand and can also negotiate price. Some companies will provide seeds; fertilizers etc which will help them to save them there incurred cost.

  • Essential commodity Bill, will help in stabilizing the prices for egg if there is good production of onion, the government can store the onion and will release when there is a deficit and this will help in stabilizing the price of a commodity so that both the producers and consumers doesn’t feel the load and there will be win-win situation. This will also help in setting up of cold storage and it will regulate the flow of the commodity in the market.

CONS of the bill

  • The process of passing the bill is not democratic as agriculture is in state list but the centre has exploited the anomaly through concurrent list, and the manner in which voting was done was not democratic at all even after huge protest the bill was pass on voice note. And the farmer didn’t have any chance to put forth their view on this bill.

  • APMC was helpful for small farmers as more the 85% of farmers in India are small farmers as they hold land less than 5 hectors. It was easy for the small farmer to procure there production in APMC as they have this price and production choices

  • There is no guarantee that farmer income will increase. If we take, the example of Bihar in 2006 the state abolish APMC and the model didn’t click and the farmers were forced to sell their procurement at price lower than the MSP and various agricultural economist suggested to strengthen the APMC instead of transferring the responsibility to private companies.

  • Contractual farming will lead to slave farming, as most of the farmer are not well educated and they will not be in a position to negotiate the terms and condition in a contract

  • Removing some of the commodities from Essential Commodity Act will lead hording of these commodities by private player and it will be easy for them to artificially regulate prices.

  • There is need to derive a mechanism of regulation of prices by the government as the private will not be given a free hand to protect both the consumer and farmers from exploitation.

Farmers Demand-

  1. Revocation of the bills

The farmer’s community is primarily on the street for revocation of the bill. They believed that these are arbitraries regime

  1. Mandi system remain intact and loan be cleared

The bill as claimed by farmers will lead to the ouster of the mandi system but in fact it was introduced to provide an additional option running parallel to the existing structure to ensure free trade. This legislation has nothing to do with MSP; in fact it merely provides an alternative to the farming community

3. To implement Swaminathan Committee report

In line with Swaminathan committee report on the Nation Commission of farmers law’s should be promulgated for MSP to be aleast 50% more than the total averaged price and if the MSP is not paid on time it should be penalized.

A law should be put in place to procure timely payments from the buyer through middle men and middle men should be able to make money.


Constitutionality of the bill?

As per Union of India v. H.S Dhillon the constitutionality of parliamentary law can be challenged on two grounds-

1. That the subject is in the state list,

2. Or that it violates fundamental rights

The common issues that are being raised are-

Is invoking parliamentary powers on agriculture consistent with the scheme of federalism and spirit of the Constitution? Does Parliament have the power to enact laws on agricultural markets and lands? Should the Constitution have been amended before enacting these laws?

The SC before hearing the matter will presume that the bills are constitutionally and the burden will on the individual or states to challenge the same. Generally the S C doesn’t stay the implementation of parliamentary law.

Federalism means that the centre and the state will have the freedom to operate in their allotted space and incardination with each other. The seventh schedule consist of the power

The seventh schedule of the constitution consist of three list

  1. Union list

  2. State list

  3. Concurrent list

The union list consist of the subject on which parliament can legislate. The state list consists of 66 subjects, on which the state has the exclusive right to legislate. The concurrent list consist of 47 subject on which both the state and the centre can legislate but in the case of conflict the centre bill will prevail.

In the case of State of West Bengal v. Union of India the hon’ble Supreme Court has held that Indian Constitution is not federal but in the case of SR Bomani v Union of India it was held that that fedlism is the part of the basic structure of the constitution, “Neither the relative importance of the legislative entries in Schedule VII, Lists I and II of the Constitution, nor the fiscal control by the Union per se are decisive to conclude the Constitution is unitary. The respective legislative powers are traceable to Articles 245 to 254… The State qua the Constitution is federal in structure and independent in its exercise of legislative and executive power,”

Federalism like constitutionalism and separation of power are not explicitly mentioned in the constitution but it is very essence of our constitutional scheme.

Term related to agriculture is mentioned at 15 places in the seventh schedule and it is further bifurcated into 3,8and 16 in the union, state and concurrent list respectively.

Entry 33 of the Concurrent List mentions trade and commerce, production, supply and distribution of domestic and imported products of an industry over which Parliament has control in the public interest; foodstuffs, including oilseeds and oils; cattle fodder; raw cotton and jute. The Centre could, therefore, argue that it is within its powers to pass laws on contract farming and intra- and inter-state trade, and prohibit states from imposing fees/cess outside APMC areas.

It is clear that both the union and the concurrent list puts agriculture outside the domain of the parliament and hence gives exclusive right to the state. However like education farming is an occupation and not trade or commerce. It cannot be equated with a profession as it will lose all its constitutional values that are been enshrined.

In cases of legislation that covers entries in two Lists


In cases such as State of Rajasthan v G Chawla, courts have used the doctrine of “pith and substance” to determine the character of legislation that overlaps between entries. The constitutionality of legislation is upheld if it is largely covered by one list and touches upon the other list only incidentally. But the two new farm Acts o beyond that — they impinge on entries in the State List.


The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 flies in the face of Entry 28 of the State List (markets and fairs), and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 impinges on Entries 14, 18, and 46 of the State List, and Entry 7 of the Concurrent List

In interpreting the lists, the Supreme Court in State of Bihar v Kameshwar Singh invoked the doctrine of colourable legislation, which means you cannot do indirectly what you cannot do directly.

In ITC Ltd v APMC, the Supreme Court upheld the validity of several state laws relating to agricultural produce marketing, and struck down the central Tobacco Board Act, 1975. It interpreted Entry 28 of the State List (markets and fairs) in favor of states, and rejected the Centre’s argument based on Entry 52 of the Union List read with Entry 33 of Concurrent List that tobacco is an industry declared as being under the control of Parliament in public interest. It said raw materials or activity that does not involve manufacture or production cannot be covered under ‘industry’.


Policy recommendation & Conclusion

There is mistrust among the farmer community regarding the bill; the way the bill had been passed has sidelined its positive things. The government should make ensure that before passing such bill, the community opinion should be taken into consideration

The centre had passed the bill in a hurry without sending it to a committee of rajya sabha for future recommendation and the way the bill is passed is undemocratic and they should have taken the cognizance of underdeveloped states where implementation of these laws will be turmoil task and most of the farmers used primitive techniques of farming and for them to compete with benchmark set by the corporate house will be a herculean task.

To gain back the trust of farmers the centre must amend these farms laws and should provide explicit provision for MSP in open market and the got should act as a regulator in monitoring prices. And the newly proposed contractual farming shall not enslave farmers to make sure that farmers are not cheated the contractual document shall be drafted in vernacular language, so that farmers can comprehend the terms & condition further the centre shall incorporate provision for penalizing firms if they malpractice or exploit farming community.


Reference

  • IndiaToday

  • Openforum.com

  • Livewire

  • Guardian

  • The Hindu


By Siddhant Tiwari



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