All About Farm Bill 2020 Protest, Pros and Cons

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All About Farm Bill 2020 Protest, Pros and Cons

The government of India has introduced three agriculture bills with an aim to double the income of Indian farmers. But there is a nationwide uproar against the Farm Bill 2020. Farmers from different parts of the country are opposing the ‘historic’ Farm Bill 2020. Let’s know All About Farm Bill 2020 Protest, Pros and Cons.

Let’s learn.

All About Farm Bill 2020 Protest, Pros and Cons
All About Farm Bill 2020 Protest, Pros and Cons

The Parliament has passed three agriculture bills:

  • The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
  • The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020
  • The Essential Commodities (Amendment) Bill, 2020.

Origin of Farm Bill 2020 Protest

Bhartya Kisan Union‘, All India Kisan Sangharsh Coordination Committee (AIKSCC) and some other farmer unions asked for permission from the Harayana government in order to conduct a peaceful protest or a rally on 10 September. The Haryana government denied the plea of rally citing the crisis of COVID-19. But the farmers started their rally with more than 100 tractors on the road with the slogan ‘Kiasn Bachao, Mandi Bachao‘. Many people called this protest as ‘Tractor Protest‘ also. At some places peaceful protest became violent and police had to lathi-charge the kisans.

Do You now?

Bharatiya Kisan Union or Indian Farmers’ Union is a non-partisan organization that represents farmers in India. This organization was founded by Chaudhary Charan Singh in Punjab in 1978.

Problems of Agriculture Marketing in India in the context of Farm Bill 2020

India’s small and marginal farmers have been struggling with acute poverty due to the multilayered problems and strictly controlled agriculture sector. The agricultural market was entirely controlled by money lenders and traders since independence.

Problems faced by Indian farmers
Problems faced by Indian farmers

The farmers were being exploited by these money lenders and traders while selling goods in the market. The government introduced APMC (Agriculture Produce Market Committee) to solve the problem.

What is APMC (Agriculture Produce Market Committee)?

  • Agriculture Produce Market Committee in India was conceptualized in the British period to make the available supply of pure cotton at reasonable prices to the textile mills of Manchester. In 1928, the Royal Commission on Agriculture issued some guidelines for the establishment of regulated markets.
  • APMC Act was introduced in 1963.
  • Agricultural Produce Market Committee (APMC) is a comprehensive agricultural marketing network where agricultural marketing is done through Mandis in the specific market area that regulates the listed agricultural produce and livestock.

APMC was established with an aim to take control over the racket of money lenders and traders and to save farmers from being exploited.

How does APMC work?

Agriculture is a state subject that is why every state has its own APMC network. The state divides APMC area depending upon the state’s volume. A trader needs to acquire the license to operate in a particular Mandi or APMC. Similarly, farmers are only allowed to sell their agriculture goods in regional Mandis only.

There are many middlemen between farmers and traders in the existing APMC process.

First, the farmers will visit Mandis where the MSP or price discovery will be done through auction. Then the goods will be taken to traders through commission agents or arthians. Then comes transaction agents who inform the farmers about the sold price. The transaction agents charge market fees from the farmers. The whole process is full of corruption. Thus the existing APMC system can not save farmers from being exploited. 

How does APMC work
How does APMC work

Then the Indian government brought the MSP or Minimum Support Price.

What is Minimum Support Price?

  • The minimum support price is the output of the recommendations of the Commission for Agricultural Costs and Prices (CACP).
  • It is the price at which the government purchases crops or agricultural goods from the farmers to support the farmers by protecting from sudden and excessive fall in price due to various reasons.
  • There are only 22 crops that come under the cover of MSP.
  • The government of India decides the MSP.

Minimum Support Price (MSP) was envisioned as a powerful instrument in stabilizing the economy. But at ground level, the reality of poor management of MSP concept is quite visible.

Do you Know?
Shanta Kumar Committee was set up to bring reforms in food corporation. The report of the committee revealed that only 6% of Indian farmers receive Minimum Support Price (MSP) in the country.
Drawbacks of APMC (Agriculture Produce Market Committee)

APMC Act was enacted by almost all the states during the 1960s or later to bring transparency in Agricultural Marketing in India. This was a small part of the overall food security in the country, remunerative prices to farmers, and fair prices to consumers. However vision the APMC was not a complete success.

  • APMC acts basically divided the Agriculture market in India geographically.
  • APMC gave rise to a complex system as it is applicable to ‘notified agricultural products’ which varies from state to state.
  • Mandi uses commissions agents or arthians who started the license raj system.
  • Only closest to state governments are able to get the license of traders and commission agents.
  • Too many middlemen increase the goods price and lots of goods are wasted in the process.

For example, a good of 5 rupees is sold at 50 rupees to consumers and the rest amount gets divided among all the middlemen.

Know about one more ground level corruption in APMC system that affects farmers

The traders form a union or group among themselves and insist farmers sell at a minimum price. When the farmers ask them to buy at a price more than MSP, they deny and wait for the agriculture goods to decay. As most of the agriculture goods are perishable in nature, farmers left no option, but to sell at a minimum price.

Do you Know?
It is to be noted that Bihar repealed the APMC act in 2006 and Kerala never enacted APMC act

Ministry of Agriculture published a report in 2012-13, which revealed that the majority of small and marginal farmers were being done by the farmers to the non-APMC traders and not in the APMC. So, MSP is an irrelevant concept here.

Now let’s move focus to the Farm Bill 2020. 

Pros of Farm Bill 2020
  • The Farmers Produce trade and Commerce (Promotion and Facilitation) Bill allows restriction-free intra and inter-state trade of farm produce.
Previously, farm produce could only be sold at notified wholesale markets, or mandis, run by Agriculture Produce Marketing Committee (APMCs). Each APMC had licensed middlemen who would buy from farmers at prices set by auction.
  • So the new Farm Bill 2020 proposed that it will give freedom of choice to the farmers. They can sell it freely across the nation without bringing into APMCs.
  • The new farm bill 2020 empowers the farmers to bypass the middlemen to sell all the agriculture produce directly to institutional buyers.
  • The proposed farm bill formulates a standard framework on the agreements that would help farmers to involve with agri-business companies, retailers, exporters directly while the small and marginal farmer will have access to modern technology.
Cons of Farm Bill 2020
  • The farmers’ groups are worried as they think the new farm bill 2020 will expose them to corporates who have more bargaining power and resources than small or marginal farmers.
  • Indian farmers will be allowed to sell their goods at the best possible prices across India. This apparently sounds good. But look at the reality.
If a farmer from Tamil Nadu gets the best price in Uttar Pradesh, how will he travel? by train? How will he manage to change trains through the journey with his goods? Will he hire labours? How a small and marginal farmer will afford to pay for labours? Nevertheless, It will take two or three days to reach UP. The agricultural goods will either rot or decay in the course. Hence, all that sounds good, does not practically fit perfect always.
  • The existing APMC system has created a monopoly and the newly proposed policy is not removing the theory of monopoly either. There is even more probability of an ecosystem of monopoly under the big corporate institutions.

Let’s summarise

Government's perceptionFarmer's perception
Farmers would be able to sell their products in anywhere in IndiaHow can a small farmer afford travel cost across India?
Areas outside the APMCs will be tax freeThere is no proper guideline on tax free zones however if the government makes the nearby area tax free then it will be a heavy loss for them
Private APMCs will set up.Private APMCs will not be transparent and regulated.
Private companies will opt for private APMCs to save tax, hence farmers will face heavy loss.
What Are The Farmers Demanding?

  • To roll back these ordinances.
  • To protect the existing APMC mandi system.
  • To clear the loans of the farmers.
  • A law should be enacted for MSP to be at least 50% more than the weighted average cost of production and if the MSP is not paid, it should be a punishable crime.
  • A law should be put in place that guarantees payment from the buyers through middlemen that have always jar been the norm to ensure that banks don’t deduct the money in the name of loan recovery.
Agriculture is a state subject, then how can the central government enact a law on agriculture?

There are three lists in the 7th Schedule of the Indian constitution.

  • List I contains the areas where the center can enact laws
  • List II contains the areas where the state can enact laws
  • List III or concurrent list contains the areas where both the center and state can enact laws

Agriculture comes under List II of the 7th Schedule.

But here we should refer Article 249 which empowers the parliament to legislate with respect to a matter in the State List in the national interest. There is one more reference of entry 33 of List III which gives power to the center to enact laws on Agriculture.

Why are State Governments opposing the Farm Bill 2020?
  • APMC will remove the entire middlemen structure hence the chain system under the corporates closest to state governments will get hurt.
  • State governments impose taxes on APMC or mandis to collect revenue. The new system is going to hurt that tax collection mechanism under the individual states.
  • The Farm Bill 2020 proposes to run a parallel APMC network, hence the state government’s control will entirely be lost of existing APMC system.

We came across the enormous negative impact of COVID-19 in the first quarter of 2020-2021. The agricultural sector and allied activities are the only sectors that grew by 3.4%, while the country’s economic contraction was figured at 23.9%.

So, the sector which feeds the nation is in distress. The farmer’s agony will never bring positive growth unless the government addresses the whole situation on an urgent basis. Here are some solutions, the government can work upon.

  • India should definitely invest more in Agriculture sector.  About 70% of rural households depend entirely on agriculture and associated allied activities and 86% of India’s farmers are categorized as small and marginal. The agriculture sector is the primary sector, if it is given a boost it will definitely spread the positive chain reaction to the Indian economy.
  • The Farm Bill 2020 proposes a good intention but had multiple flaws. Certain amendments should be made to the Bills in order to protect Indian farmers. The government should consider what the farmers are demanding.
  • The LPG ideology or the ideology of Liberalization, Privatization, or Globalization came into light in 1991. Neo-liberalism’ or ‘liberalism ‘ is an ideology that supports the concept of the free market. The free Market basically refers to a market with zero interference from the government in the business sector. The Indian government also adopted the ideology to create a free economy at that time. Similarly, the agriculture market should be made free. The government should restrict its control over the agriculture market.
  • As it is previously stated in the article that only  6% of Indian farmers get the benefit of Minimum Support Price (MSP). It is the lack of awareness among the farmers. Proper initiatives should be taken to educate and empower farmers.
Do you Know?
As per the data from NCRB (National Crime Record Bureau), more than 1 lakh suicide cases have been registered in 2018, 7% among the figure were farmers.

The above data clearly shows the epitome of the sufferings of Indian farmers and the height of mismanagement of existing agricultural policy. Hence the reform is essential.

As far as the reform is the primary concern, the government should focus on solving the existing problems of the Indian agriculture market before implementing a new one.

The farmer is the only man in our economy who buys everything at retail, sells everything at wholesale, and pays the freight both ways.
John E Kennedy


The article is aimed at giving a transparent view of the ongoing agitation of the farmers against the new Farm Bill 2020 along with addressing the agricultural marketing problems.


Here is a Ebook on Agricultural cooperatives development – Food and Agriculture. You can download for more comprehensive view on Agricultural cooperatives development – Food and Agriculture.


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