With Shiromani Akali Dal (SAD) leader and Union minister Harsimrat Kaur Badal’s resignation from the Cabinet on Thursday, the Bharatiya Janata Party and the SAD alliance waded into troubled waters. SAD’s lone minister in the Narendra Modi government, resigned to protest the three agriculture bills that were later passed by a voice vote in the Lok Sabha."I have resigned from the Union Cabinet in protest against anti-farmer ordinances and legislation. Proud to stand with farmers as their daughter and sister," Kaur said in a tweet.
The legislations, Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020, were passed by voice vote in the Lok Sabha on Thursday. Earlier on Tuesday, the House passed the Essential Commodities (Amendment) Bill, 2020 which seeks to deregulate food items, including cereals, pulses and onions
Why is the Akali Dal opposing the Bills?
Farmers happen to be the largest chunk of the party’s vote bank. Akali Dal therefore cannot let down its core constituency. Political analysts say it’s a question of survival for the party that enjoyed two successive terms from 2007 before the 2017 rout. The SAD-BJP alliance secured only 15 per cent of the seats while the Congress recorded its most emphatic win since 1957.
What is the biggest fear?
Farmers fear they will no longer get paid at MSP, while commission agents are concerned that they will lose their commission. According to a Punjab Agricultural University study, there are over 12 lakh farming families in Punjab and 28,000 registered commission agents. A large part of the state’s economy rests on funds infused by central procurement agencies such as Food Corporation of India (FCI).
Now, protesters fear the FCI will no longer be able to procure from the state mandis, which will rob the middleman/commission agent/arhatiya of his 2.5 per cent commission. The state itself will lose the 6 per cent commission it used to charge on the procurement agency.
Why do parties call it a breach of cooperative federalism?
Since agriculture and markets are state subjects – entry 14 and 28 respectively in List II – the ordinances are being viewed as a direct encroachment upon the functions of the states and against the spirit of cooperative federalism enshrined in the Constitution. The Centre, however, argued that trade and commerce in food items is part of the concurrent list, thus giving it constitutional propriety.
Will the Bills bring an end to MSP?
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance aims at opening up agricultural sale and marketing outside the notified Agricultural Produce Market Committee (APMC) mandis for farmers, removes barriers to inter-State trade and provides a framework for electronic trading of agricultural produce. It prohibits state governments from collecting market fee, cess or levy for trade outside the APMC markets.
According to PRS Legislative Research, APMCs were set up with the objective of ensuring fair trade between buyers and sellers for effective price discovery of farmers’ produce. APMCs can regulate the trade of farmers’ produce by providing licences to buyers, commission agents, and private markets; levy market fees or any other charges on such trade, and provide necessary infrastructure within their markets to facilitate the trade.
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 also argue that ensuring a larger number of farmers get the MSP for their produce and straightening kinks in the APMCs, instead of making these state mechanisms redundant is the need of the hour.
What does the Bill say about contract farming?
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Ordinance relates to contract farming, providing a 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. The price to be paid for the purchase is to be mentioned in the agreement. In case of prices subjected to variations, the agreement must include a guaranteed price to be paid for such a produce, and a clear reference – linked to the prevailing prices or any other suitable benchmark prices – for any additional amount over and above the guaranteed price, including bonus or premium. The method of determining such price, including guaranteed price and additional amount, will be provided in the agreement as annexures.
What about possible exploitation by corporate houses on 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.
Contract farming is not a new concept to the country’s farmers – informal contracts for food grains, formal contracts in sugarcane and poultry sectors are common. 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.
Will it lead to erosion of food security?
Punjab Chief Minister Amarinder Singh, on the easing of regulation of food items, said, it 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. He said it could undermine food security since the states would have no information about the availability of stocks within the state.