The Indian farmers have felt exploited for a long due to a huge disparity between agriculture & other sectors despite economic liberalization. The fragmented and insufficient markets with high market fees, inadequate infrastructure,credit facilities, and information asymmetry were the center points for the disparity.
The much-awaited reforms in the farm sector that the Centre brought in the form of three acts passed by the parliament in September 2020are expected to have a far-reaching effect in transforming Indian agriculture and reducing the hardship drudgery of the farmers. Farmer's Produce Trade and Commerce (Promotion and facilitation) Act, 2020, primarily provides freedom of choice of sale and purchase and barrier-free trade to the farmers, unlike the erstwhile setup that permits to make sales to licensed traders in the APMC mandis only. While mandis and APMCs would still exist, the act provides the farmers with additional trading opportunities to help them get remunerative prices due to more competition. The existing MSP procurement system that was created to act as a safety net to the farmers would also continue to exist. The act opens the facility of online trading of farm goods. It legally empowers the farmers to receive the payment on the same day or maximum within three working days where procedure so requires. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 provides the legal framework for agreements between farmers and sponsors to purchase farming produce and provide farm services. It also provides the guidelines for model farming agreements by Central Government wherein the product's price will be mentioned in the contract. The act also provides a specified dispute resolution mechanism, thereby protecting both farmers and buyers' rights. Essential Commodities (Amendment) Act, 2020 restricts the government's powers to prescribe stock limits on agricultural commodities except under extraordinary situations like war, famine, extraordinary price rises, natural calamities, etc.
The writer is Principal Scientist, ICAR-Indian Institute of Agricultural Biotechnology, RanchAs per this act, the imposition of stock limits shall only be based on 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 produce.
After all, these acts only aim at providing additional trade channels to the farmers, legal framework protecting their rights, reduction in market fees, better price discovery, development of infrastructure close to the farm gate, option for contract farming for price assurance, and boosting private investments in warehousing and post-harvest agro-processing. Besides turning farming more profitable even for small & marginal farmers, the acts would end the APMC cartel monopoly.
The writer is Principal Scientist, ICAR-Indian Institute of Agricultural Biotechnology, Ranchi
