Farm Bills 2020
Source from Twitter: @desiafterdark
2/ Three bills were proposed in the Indian Parliament (passed in September 2020) with the intent of reforming an agricultural sector that is severely under stress and handicapped by a structure that is a mixture of feudal holdover from the zamindari system & coldwar era socialism
3/ Bill 1: Farmer’s Produce Trade and Commerce
(Promotion and Facilitation) Act 2020 introduces choice and freedom. Farmer’s
will have the freedom to sell their produce to anyone and in any market that
they desire in addition to the current system which will continue as is.
4/ This does away with the incredible draconian
diktat that a farmer cannot sell his produce to whoever he wants, however he
wants, at whatever price he wants. No where in the modern world are farmer's
beholden to the whims of the government for where they can sell their own crop
5/ The new legislation will allow "the farmer
to enjoy freedom of choice of sale and purchase of agriproduce" - that
means that where farmers could only sell their produce through APMC (state
government middle men), now they can sell to anyone including the APMC (if they
choose)
6/ It will also allow barrier free inter-state
(farmer’s selling anywhere within state, instead of local mandi) and
intra-state (farmers can sell to APMCs or anyone else in other states) commerce
outside of the physical premises of markets notified under State APMC
legislations.
7/ Farmers will *not* be charged cess/levys for sale
of produce and will not have to bear transport costs. This means more money in
the pocket for the farmer per sale.
8/ Freedom of location - whereas currently farmers
are restricted to selling only at mandis, the Act gives them the freedom to do
business directly at a farm gate, cold storage, warehouse, process units, etc.
Removes any regulation that dictates how a farmer can sell his produce
9/ The Act proposes an upgraded electronic trading
transaction platform to more efficiently regulate trade and plug leaky holes of
mismanagement and corruption (this already exist in the E-NAM platform where
farmers can sell physically or electronically to APMCs)
10/ Now that I have explained what the bill actually
says, let's talk about some of the valid concerns that have been raised about
those worried that the govt is doing away with MSP (min. selling price) and how
they have been addressed via official notification:
11/ Procurement at MSP will continue. The new act
allows famers to sell outside the APMC/Mandi system in addition to at the
Mandi, not instead of it. If a farmer so desires, they can continue doing
business as usual with no change.
12/ In summary, the first bill was passed with the
intention of removing regulation & bottlenecks unfairly imposed on the
farmer from the days of socialistic central planning that dictated where, when,
how, and for how much a farmer could sell their produce. This is a good thing
13/ Bill 2: The Farmers (Empowerment and Protection)
Agreement on Price Assurance and Farm Services Act, 2020 deals primarily with
reforms in contract farming, providing fair prices to farmers for their
produce, and on measures that will ultimately increase a farmer's take home.
14/ The intent of the bill is to introduce
regulation that offers legal protections to a farmer when they enter into a contract
with a buyer to mitigate the risk that corporate entities take advantage of
farmers who don't have the $/knowledge to ensure the fair price for crop
15/ Farmers engaging with processors, wholesalers,
aggregators, wholesalers, large retailers, exporters, etc. will be empowered as
follows:
16/ When a buyer approaches a farmer to produce a
crop, they must enter a legal contract where the price is clearly dictated.
This price is assured even BEFORE the sowing of the crops. Farmers save cost of
marketing product bc contract dictates a guaranteed buyer at a guar. Price
17/ The principle of price assurance says that if at
the time of sale the market price for the crop is higher than what was
initially negotiated, the farmer is entitled to this higher price over and
above the minimum negotiated price. He will not be fleeced at the end.
18/ If at the time of sale the market price for the
crop is lower than was initially negotiated, the farmers is still entitled to
the minimum negotiated price, so he will not lose out if the market suddenly
tanks. Price assurance is good for farmers and eliminates predation.
19/ Price assurance also transfers the risk of
market unpredictability from the farmer to the sponsor. Due to prior price
determination, farmer's will be shielded from the rise and fall of market
prices.
20/ Now a farmer can fix his own price for produce
and they must receive payment within three days maximum as per law. The Bill
also creates local dispute redressal mechanism that means less court =
increased speed of dispute resolution without legal fees for farmers
21/ Regulating contract farming not only reduces
predatory practises, but makes farmers legal partners with buyers, where both
parties benefit from increase in yield. It is in the interest for corps. to
provide modern technology, better seed, and improve productivity. Win Win.
22/ After signing a contract, the onus is on the
purchasing party to pick up produce directly from the farm, eliminating the
cost and logistics born by the farmer for transporting and selling their produce.
More money in the pocket for a farmer. Another really good idea.
23/ 10K FPOs (Farmer Producer Orgs) are being formed
to bring together small farmers and work to ensure remunerative farming for
farm produce. Which govt wants to facilitate unionization? Increased education,
knowledge, and access to the system helps the farmer, not hurts him.
24/ In summary: The Farmers (Empowerment and
Protection) Agreement on Price Assurance and Farm Services Act introduces legal
safeguards for farmers that allows them to approach a transaction at a level
playing field while also focusing on improving the education of rural farmers
25/ Bill 3: Essential Commodities (Amendment) Act
2020. This thread is going longer than I anticipated, but detail is important
since such havoc is being caused by blatant lies and fear mongering. Let's talk
about the third bill; perhaps the simplest but most important.
26/ The intent of the bill is to remove limits on
how much of a crop can be bought in the market due to outdated, wartime laws
that were put in place to ensure that the government had stockpiles of
“essential commodities” at hand; restricting how much could be sold in the
market.
27/ Cereals, pulses, oilseeds, edible oils, onions,
potatoes will not be classed as essential commodities - allowing economies of
scale for important crops, that will allow more production and increased
supply, and as a result lower market price for end consumer.
28/ Currently, 35 - 40% of produce produced is
WASTED due to lack of cold storage facilities and inefficient supply chain.
This costs the farmers 35 000 cr. Economies of scale will lower cost of op.
when size of business is allowed to increase by removing artificial bottlenecks.
29/ Additionally, the interests of consumers are
safeguarded through the failsafe provision that allows the government to
regulate agricultural foodstuff during war, famine, extraordinary price rise,
natural calamity, etc.
30/ What is an essential commodity? This is an act
from the 50s/60s that caused people to line up for rations for decades a la
full blown communist countries. We produce surpluses of all these crops in
2020. The govt criminalized possession over a certain amount for these crops
31/ The ECA was a restriction on scale in
agriculture that only hurt the farmer, the consumer, and everyone in between.
The premise behind the ECA is similar to what led Churchill to lock up
foodstuff in 1943, and artificially create The Famine of Bengal in 1943. Good
riddance.
Source: Twitter: @desiafterdark
