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Agriculture Laws and Farmers Protest

Agriculture Laws and Farmers Protest

Introduction

  • Agriculture is the mainstay of the Indian Economy and their are various Government Schemes which are trying to minimise the burden of the Indian Farmers.

Facts About Agriculture In India

  • In India, the agricultural sector employs nearly half of the total workforce, but it contributes to 17.5% of the GDP (at current prices in 2015-16) while the services sector contributes 66.1 per cent to the GDP.
  • India is the largest milk producer, 2nd largest in vegetables and fruits, 3rd in fish production, 4th largest in egg and 5th in poultry production in the world.
  • Food-grain production in India has been increasing every year lead India among the top producers of several crops such as rice, pulses, wheat, sugarcane and cotton in the world.
  • India acquires the world’s largest irrigation land which occupies about 96 million hectors of the land area. Horticulture and livestock production engage a large share of small and marginal farmers, and thus plays a critical role in rural economy.
  • About 98 percent of India’s agricultural commodities comply with legal upper limits for pesticide residues, making Indian food products among the world’s safest.
  • India’s spending on crop protection chemicals is less than 1% of total agriculture production in value term; which is a fraction of global counterparts.
  • India ranks 2nd in the world in agriculture production. India’s world rank in services and industry sector is 9th and 5th respectively. Indian agricultural production has increased from 87 USD bn to 394 USD bn in the last 13 years (12.3% annual growth).
  • Indian agriculture is multifaceted, with horticulture and animal husbandry contributing to over 60% of India’s agricultural GDP.
  • The main food grain of India is rice. India ranks second worldwide in rice production. West Bengal is the top state in rice production followed by Uttar Pradesh, Andhra Pradesh, Punjab, and Bihar. Yield wise, Tamil Nadu ranks first in rice production. Central rice research institute is located in Cuttack, Odisha.
  • India is the second most tea producing country and in India, Assam is the most tea producing state. Karnataka is the highest coffee producing state.
  • Sikkim which is claimed to be an entirely organic farming state, is heavily dependent on other states to feed its population.

Recent development on Agriculture | Agriculture Laws and Farmers Protest 

  • Three Bills on agriculture reforms were introduced in the Parliament to replace the ordinances issued during the lockdown
  • 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
  • Farmers and farmer associations across the country have protested against the ordinances. The tractor protest by farmers of Punjab and Haryana in July was in opposition to these.
  • These bills envisage to bring change in some of the key aspects of the farm economy — trade in agricultural commodities, price assurance, farm services including contracts, and stock limits for essential commodities.
  • These bills sought to bring much needed reforms in the agricultural marketing system such as removing restrictions of private stock holding of agricultural produce or creating trading areas free of middlemen and take the market to the farmer.
  • However, farmers are apprehensive that the free market philosophy supported by these bills could undermine the Minimum Support Price (MSP) system and make farmers vulnerable to market forces.

Why Ordinances Were Released? | Agriculture Laws and Farmers Protest 

  • These ordinances were announced to facilitate trade in agricultural produce.
  • They were historically resisted by the bureaucracy and the states.
  • The ordinances were introduced rather than bills, because of,
  • Unreleased frustration at repeatedly failing to change the status quo of depressed farmer livelihoods, and
  • The pressure of the PMO seeking instant delivery
  • Bills would require to be placed in the public domain for comments, consultations would be held with farmers and states.

The Farmers’ Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020 Provisions

  • Opens up agricultural sale and marketing outside the notified Agricultural Produce Market Committee (APMC) mandis for farmers
  • Removes barriers to inter-State trade
  • Provides a framework for electronic trading of agricultural produce.
  • Prohibits State governments from collecting market fee, cess or levy for trade outside the APMC markets.

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020 Provisions

  • Provides framework on trade agreements for the sale and purchase of farm produce.
  • The mutually agreed remunerative price framework envisaged in the legislation is touted as one that would protect and empower farmers.
  • The written farming agreement, entered into prior to the production or rearing of any farm produce, lists the terms and conditions for supply, quality, grade, standards and price of farm produce and services.
  • An effective dispute resolution mechanism for with clear timelines for redressal

Essential Commodities Bill Provisions

  • Removes cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. The amendment will deregulate the production, storage, movement and distribution of these food commodities.
  • The central government is allowed regulation of supply during war, famine, extraordinary price rise and natural calamity, while providing exemptions for exporters and processors at such times as well.
  • Imposition of any stock limit on agricultural produce must be based on price rise. A stock limit may be imposed only if there is a 100% increase in retail price of horticultural produce; and a 50% increase in the retail price of non-perishable agricultural food items

Reasons For The Protests | Agriculture Laws and Farmers Protest 

  • End of MSP
    • Critics view the dismantling of the monopoly of the APMCs as a sign of ending the assured procurement of food grains at minimum support prices (MSP).
    • To the Centre’s ‘one nation, one market’ call, critics have sought ‘one nation, one MSP’.
    • Critics argue that ensuring a larger number of farmers get the MSP for their produce and addressing weakness in the APMCs, instead of making these State mechanisms redundant is the need of the hour.
  • Against the Spirit of Cooperative federalism
    • Since agriculture and markets are State subjects – entry 14 and 28 respectively in List II – the ordinances are being seen as a direct encroachment upon the functions of the States
    • The provisions are viewed as against the spirit of cooperative federalism enshrined in the Constitution.
    • Justification by Centre: The Centre, however, argues that trade and commerce in food items is part of the concurrent list, thus giving it constitutional propriety.
  • Food security undermined
    • Easing of regulation of food items would lead to exporters, processors and traders hoarding farm produce during the harvest season, when prices are generally lower, and releasing it later when prices increase.
    • This could undermine food security since the States would have no information about the availability of stocks within the State.
  • No mechanism for price fixation
    • The Price Assurance Bill, while offering protection to farmers against price exploitation, does not prescribe the mechanism for price fixation.
    • There is apprehension that the free hand given to private corporate houses could lead to farmer exploitation.
    • Critics are apprehensive about formal contractual obligations owing to the unorganised nature of the farm sector and lack of resources for a legal battle with private corporate entities.
  • Critics anticipate irrational volatility in the prices of essentials and increased black marketing.

What can be done to solve these issues?

  • Empowering State Farmers Commissions: Rather than opting for heavy centralisation, the emphasis should be on empowering farmers through State Farmers Commissions recommended by the National Commission for Farmers, to bring about a speedy government response to issues.
  • Improve Agricultural Infrastructure to Strengthen Competition: Government should massively fund the expansion of the APMC market system, make efforts to remove trade cartels, and provide farmers good roads, logistics of scale and real time information.
  • Consensus Building: The Centre should reach out to those opposing the Bills, including farmers, explain to them the need for reform, and get them on board.

Traditional Agriculture Marketing in India | Agriculture Laws and Farmers Protest 

  • Direct sale to moneylenders and traders: Most of the agricultural products are sold directly to petty traders of the villages or the money lenders. These traders or moneylenders then work as intermediaries and sell these produce in bigger markets or to wholesalers, earning substantial profit.
  • Rural Haats: A Haat is village market tvering couple of villages. They are held in periodic manner. The agents of wholesalers and different brokers visit such haats to buy the produce of the farmers or of the intermediaries. The Haats have very poor infrastructure facilities. They generally lack storage, drainage and other facilities. Smaller and marginal farmers are generally the main supplier of such haats.
  • Mandi: A Mandi is a wholesale market, which serves a number of villages, localities and even towns. They are generally located in a city or a very big village markets. The businessmen who are functional here are called Adhyas. These Adhitya buy from farmers via middlemen, moneylenders, intermediaries etc. and then sell it to wholesalers and suppliers who sell it to retailers. These Mandis are regulated by APMC acts of various states.
  • Co-operative marketing: Such societies are formed by collection of farmers to get benefited by collective bargaining. This improves the bargaining power of the members and they are able to obtain a better price for the produce, because the produce present in very large in terms of quantity. In addition to the sale of produce, these societies also serve the members in a number of other ways.

 

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