Recent Farm Bills and Benefits to Farmers (Kurukshetra January 2021)

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Recent Farm Bills and Benefits to Farmers

  • Agricultural marketing.
  • Contract farming.
  • Essential commodity.
  • APMCs remain functional as a platform for marketing of agricultural produce.
  • APMCs will be strengthened and become more transparent.
  • Govt. is committed to make investments for the alternative system for marketing.
  • On June 2020, the Govt. promulgated three ordinances on farmers՚ produce trade and commerce; farmer agreement of price assurance and farm services; and essential commodity.
  • To replace the ordinances, three bills were passed by the Parliament on September 20,2020.

The Farmers՚ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020

  • Provides for the freedom to sell and buy farm produce at any place in the country
  • Promote e-commerce and allows setting up of an electronic platform.
  • Also offers opportunity to the Govt. to intervene to regulate the system, if the new system fails to work satisfactorily.
  • Legalizes all the transactions which were earlier put under the regulations and restrictions by the APMCs.
  • The direct purchase from the farmers at their farm as provided in the FPTC Act, 2020 will be empowering him to decide the price of his produce.
  • The State must encourage FPOs to become aggregators and at the proper time they will become active price negotiator rather than passive recipients of the price decided by the commission agents in the APMC mandis.

Demystifying the New Farm Laws

Demystifying the New Farm Laws
Before ReformsAfter Reforms
Can sell notified farm produce only in APMC Mandi.Freedom of choice to sell in APMC mandi or choose any other seller.
Monopoly of few.Multiple options to sell.
Cartels of traders could keep prices artificially low.Better price realization through competition.
Large price spread.Higher share of farmer in consumer՚s payment.
Long chain of intermediaries.Minimum or no intermediary.
No opportunity for farm youth to trade agri commodities.Rural farm youth will get opportunity to trade & run supply chain.

The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020

  • An improvement over the old one.
  • The APAFS Bill 2020 will facilitate an assured price to the farmers for his produce as mutually agreed between farmers and sponsor before the commencement of production operations.
  • The technologies, services, and inputs on mutually agreed terms and conditions to produce desired quality produce.
  • Sponsor՚s role is limited to buy the produce at pre-decided price as agreed in advance and supplying the quality of inputs and services to farmers as per the contract.
  • The sponsor is neither permitted to lease-in the land or modifying it or acquiring the ownership rights.
  • The physical boundaries of the farmers land will remain intact so is his ownership rights.
  • The farmers will be the sole custodian of all production operations as well.
  • For the first time, a farmer will dictate his terms for price settlement to a buyer.

Case Study

  • The contract farming with Nestle, for milk in Punjab՚s Moga District operating since 1961 could be an example to cite.
  • Over 1 lakh farmers are associated with the contract.
  • Nestle has been providing the technical guidance, feed, vaccines, and veterinary services to milk producers.
  • A high order supply chain has been established based on a pre-announced weekly price based on the fat and solid content in the milk.
  • The assets of the farmers have not been taken by the MNC.

The Essential Commodities (Amendment) Act, 2020

  • The ECA has been modified for agriculture and food stuffs.
  • The supply of the commodities enlisted in ECA such as cereals, edible oils and oils can only be regulated under extraordinary circumstances like war, famine, extraordinary price rise and natural calamities.
  • Transparent criterion has been laid down on imposing or regulating stock limits.
  • The Govt. can intervene in the market for price control under the amended act as well.
  • Recent action in imposing the stock limit on onions in October 2020 is the testimony of such provision.
  • Criticism that a free hand has been given to stockists and market manipulators is baseless.
  • The commodities like fertilizers and seeds which are of much interest to farmers have not been touched by the modifications.
  • Modifications in ECA will encourage the big investment in creating much needed infrastructure such as warehouses, cold storages, pack houses and logistics.

Gap between required and existing infrastructure:

  • 70 % in pack houses.
  • 98 % in reefer vehicles.
  • 94 % in ripening chambers (NCCD, 2015) .

The Farmer՚s Concerns

  • Massive protests in Punjab and Haryana and other states.
  • Liberalization in agriculture is not allowed to be percolated well with farmers on the grounds devoid of facts and imaginary.
  • The Govt. and all institutions need to engage seriously in communicating with the farmers for such a serious turn that has shaken the established system and traditionally deep-rooted relations between Adhatiya-Commission Agent and the farmers.
  • Argument that primary market yards and sub yards under the APMCs have also been providing employment to millions of the landless and unemployed semiskilled and unskilled laborers.

Myths and Facts About Agricultural Bills

Myths and Facts About Agricultural Bills
Big companies will exploit farmers in the name of contract.The contract agreement will guarantee the farmers to get the fixed price. Farmers can withdraw from the contract at any point without any penalty.
Advantages to big corporates, loss to farmers.In many states farmers successfully crops like sugarcane, cotton, tea, coffee along with large corporates. New small farmers to benefit from technology and equipment with guaranteed profits.


  • The center should provide matching grants.
  • States must take these proactively.
  • Creating awareness amongst farmers about the positives of the amendments with some live examples and records advantaged based on the real learnings of the farmers themselves rather than annualized or derived data of the surveys.
  • Reports for which these seems to be a trust of deficit for the reasons unknown to many.
  • 721 KVKs, one in each district, under ICAR-SAUs governance may offer a great service in connecting the farmers through the ICT platforms and other communication means.

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