Q. Why in News ?
A. Farmer organisations in Haryana and Punjab are holding protests against agricultural ordinances promulgated recently.
Their target is three central laws promulgated through ordinances on June 5 2020 :
1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance,
2. The Essential Commodities (Amendment) Ordinance, and
3. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020
Q. What is this first ordinance about for which there are widespread protests ?
A. Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020
- Currently, there are restrictions for farmers in selling agri-produce outside the notified Agricultural Produce Market Committee (APMC).
- The farmers are also restricted to sell the produce only to registered licensees of the State Governments.
- Further, barriers exist in free flow of agriculture produce between various States owing to the prevalence of various APMC legislations enacted by the State Governments.
Q. What might be benefits of Ordinance?
- It will create an ecosystem where the farmers and traders would enjoy freedom of choice of sale and purchase of agri-produce.
- It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State agricultural produce marketing legislations.
- The ordinance also proposes an electronic trading in transaction platform for ensuring a seamless trade electronically.
- It also proposes to set up a separate dispute resolution mechanism for the farmers.
Q. What is its significance?
- It will open more choices for the farmer, reduce marketing costs for the farmers and help them in getting better prices.
- It will supplement the existing Minimum Support Price (MSP) procurement system and both will help to provide stable income to farmers.
- It will also help farmers of regions with surplus produce to get better prices and consumers of regions with shortages, lower prices.
- It is expected to pave the way for creating One India, One Agriculture Market in the country.
Q. So, what’s fuelling the protests?
A. There are two drivers.
- The first is the farmers, who view the dismantling of the monopoly of APMCs as a precursor to ending the existing system of government grain procurement at assured minimum support prices (MSP).
- The ordinance itself does not mention anything, directly or indirectly, to suggest an end or phasing out of MSP-based government procurement. But farmer leaders contend that the true intent of the latest reforms is to implement the recommendations of the Shanta Kumar-headed High Level Committee on Restructuring of Food Corporation of India (FCI). This panel, which submitted its report in 2015, had called for FCI handing over all procurement operations in Punjab, Haryana, MP, Chhattisgarh, Odisha and Andhra Pradesh to state government agencies.
- Second reason of protests is that States also earn substantial money from the various levies on the value of produce transacted in APMCs. Punjab’s annual revenues from mandi fees and a ‘rural development’ cess which add up to 6% on paddy and wheat, 4% on basmati, and 2% on cotton and maize are estimated at Rs 3,500-3,600 crore. All that would obviously get hit if trades were to move away from the mandis.
Q. Is there a way out?
A. As the reaction to the ordinances has not been uniform. Leaders believe farmers will benefit if processors, retailers or exporters were to invest in infrastructure for direct procurement. Farmers currently spend money on transporting their produce to the mandis, which they can save if purchases are made closer to their fields. But the Centre should reach out to Punjab and Haryana farmers to dispel any misapprehensions. The hurried manner in which the ordinances were rammed through during the height of the pandemic may have also added to the trust deficit.Ordinances