What are the 3 Farm Laws 2020 | Farm Laws News Today

What are the 3 farm laws 2020? Recently the farmer and farmer’s new farm law 2020 are in the news all over. Farmers are protesting against the recent farm laws which have been put on stay by the Supreme Court.

The huge protest against the law is mainly for three reforms via Farmer’s Produce Trade and Commerce (Promotion and Facilitation Act), Farmers Agreement on Price Assurance (Empowerment and Protection Act), and Essential Commodities (Amendment) Act.

Farmers have led a blockade in Delhi, and even the government scrambles to find a solution for the same. Almost eight rounds of meetings have failed to bring any conclusion between protesting farmers and the central government.

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The ruling government has given the go-ahead to three reforms that have been termed as “anti-farmer” by the opposition and long-term BJP ally.

The government out a plan to amend the new farm law 2020, but the protestors have said that they would not settle down unless and until the legislation scraps all the laws. Here is complete detail on what are the 3 farm laws of 2020.

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1. Farmer’s Produce Trade and Commerce (Promotion and Facilitation Act)

On 5 June 2020, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance. New farm law 2020 was promulgated by the Union Cabinet.

As per the law, farmers can sell the produce intra- and interstate beyond the premises of the Agricultural Produce Market Committee and other markets notified under APMC acts.

The Act allows the farmers to sell their produce in outside trade areas such as farm gates, factory premises, cold storage, and so on.

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Previously, farmers could sell only in the APMC yards or Mandis. Farmers can sell for lucrative prices via alternative trading channels to promote barrier-free intra-state and inter-state trade of agricultural produce.

It also allows the electronic trading of scheduled farmers’ produce in the specified trade area. It will allow direct and online buying and selling of agricultural produce via electronic devices and the Internet.

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’.

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2. Farmers Agreement on Price Assurance (Empowerment and Protection Act)

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

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 product. The minimum period of the farming agreement shall be for one crop season or one production cycle of livestock.

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.

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The maximum period of the farming agreement may be mutually decided by the farmer and the buyer. Which shall be explicitly mentioned in the farming agreement.

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 product and a clear reference for any additional amount above the guaranteed price must be specified in the agreement. 

The Act provides for a three-level dispute settlement mechanism, i.e. Conciliation Board, Sub-Divisional Magistrate, and Appellate Authority.

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3. Essential Commodities (Amendment) Act

On 5 June 2020, the Essential Commodities (Amendment) Ordinance, 2020 was promulgated by the Union Cabinet. It is an act of the 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 foodstuffs, drugs, fuel (petroleum products) etc. The Government of India regulates the production, supply, and distribution of a whole host of commodities it declares ‘essential’ to make them available to consumers at fair prices.

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The Government can also fix the MRP of any packaged product that it declares an ‘essential commodity’. The Centre can add commodities to 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. 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 bring down prices.

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.

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The commodities that have been deregulated are food items, including cereals, pulses, potatoes, onions, edible oilseeds, and oils. As per the amendment, the imposition of any stock limit on agricultural produce will be based on a price rise and can only be imposed.

If there is a 100% increase in the retail price of horticultural produce and a 50% increase in the retail price of non-perishable agricultural food items.

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.

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Farmers Empowerment and Protection Bill 2020

Reasons for Rejection of Proposal by Indian Farmers

1. State Governments can Levy Cess on the Private Mandis

The proposal was rejected by the farmers as they believed that the creation of private mandis along with APMC would drive agriculture business towards private mandis, ending government markets, intermediary systems, and APMCs.

As a result, big corporate houses will overtake markets, thereby procuring farm produce at incidental rates.

The farmers believe that the Government may delay the procurement (as in the case of paddy). Turning the public markets inefficient and redundant.  

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2. Written Assurance for the Continuation of the Existing MSP System

The proposal was rejected by the farmers as they believe that the new Farm Laws 2020 are brought to dismantle APMCs. Thus, they are demanding a comprehensive Act on MSP pan India and for all crops.

They are of the view that a written assurance from the Union Government is not a legal document and holds no guarantee. 

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3. Direct the State Governments to Register Traders

The proposal was rejected by the farmers as the new Farm Laws 2020 has no provision to regulate the traders. As per new Laws, any PAN cardholder can procure grains from the markets at wishful prices and hoard the farm produce.

The farmers believe that the Central Government is not ready to take responsibility for the ongoing issue. They want the State Governments to regulate the traders. 

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4. Contract Farming Law

Farmers will have the alternative to approach the court, and their land will be safe. As no loan will be given on farmers’ land and their buildings by mortgaging it.

The proposal was rejected by the farmers as the history of contract farming has many examples of non-payment by the companies making various excuses like substandard produce.

For example, in Sugarcane produce, payments were held for years; many cases of non-procurement have been witnessed citing ‘poor quality’, driving the farmers into a debt trap. 

Thus, farmers do not have money to repay the loans and have no option to sell/lose their lands.

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Bottom Line

Farmers are not bound by this new farm law 2020. If they wish, they can go with an older version of the farm bill. This means it’s up to them whether they wish to go with this or not. It’s all their choice.

This farm law is not an obligation to them. The government and the Prime Minister of India already made it clear on several occasions.

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3 Farm Law 2020: FAQ

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