India recently heralded three new bills that have been getting a fair amount of attention since they have a greatly altered the way people think about farming and the agricultural process. These three bills are
- 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
These three bills are essentially concerned with the absence of direct control of the Central Government or State Governments in the agricultural markets and allowing farmers to sell their produce outside the designated APMC areas. This essentially means that the procurement by the government can, in certain cases, bypass the Agricultural Produce Market Committees.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill is designed to protect the interests of small farmers in India, who are often exploited because of the inefficient market system. This bill would help them to get better prices for their produce by allowing them to market it outside the traditional APMC markets.
The Farmers Empowerment and Protection Agreement on Price Assurance and Farm Services Bill would ensure that farmers are not cheated out of their profits, as the new bill seeks to regulate the contractual farming that is currently taking place in some parts of the country. This would give farmers greater control over their produce and ensure that they receive fair prices.
The Essential Commodities (Amendment) Bill seeks to deregulate the supply of agricultural commodities such as cereals, pulses, edible oilseeds and onions from stock ceilings and the government-set market prices, thus allowing farmers to earn more from the market. This means that the government will no longer be mandated to intervene when the prices of these commodities shoot up, as is usually the case during inflation and other situations.
The three bills have received intense criticism from farmers, who worry that the new laws will severely limit their ability to negotiate prices with buyers and could lead to the monopolization of the agricultural market. This has been further fuelled by the fact that the farmers have not been consulted about these laws before they were passed, leaving them feeling frustrated and betrayed.
Production Costs
One of the major concerns of the communities that are going to be affected by the agricultural bills is the production cost. With the deregulation of the APMC market and the introduction of a new contractual farming system, the cost of production is likely to increase due to the lack of bargaining power they have in the market. This means that farmers, who are already facing a financial crunch due to decreasing profit margins, may have to bear additional costs in order to stay competitive in the market.
Moreover, the deregulation of the market is likely to lead to a flood of corporate farming companies that are looking for land to buy for cultivation. This will further increase the production cost for the farmers, as most of these companies can afford to pay more for the land. This, combined with the increasing market competition and the risk of exploitation from large companies, could lead to a reduction in the profits of small farmers.
Furthermore, it is important to note that the increase in production costs is not the only concern for farmers. Since the Agricultural Produce Marketing Committee is no longer in charge of regulating the market, there is a lack of oversight to prevent exploitation. This means that the farmers are more likely to be at the mercy of the big companies and may struggle to negotiate good prices for their produce.
With the introduction of the three bills, the agricultural market has undergone a drastic transformation. The deregulation of the market and the introduction of the new contractual farming system might have some benefits in terms of giving farmers greater control over their produce, but it also has some major downsides. The increase in production cost and risk of exploitation could potentially lead to farmers becoming even more vulnerable than they were before.
Small Farmers
The deregulation of the APMC market and the introduction of a new contractual farming system might benefit large farmers and agro-businesses, but it is likely to be detrimental for small-scale farmers, who are already facing a financial crunch due to declining profit margins. With the deregulation of the market, the bargaining power of small-scale farmers is likely to decrease, and they will no longer be able to negotiate prices with buyers. This might lead to them being exploited and underpaid for their produce.
Furthermore, the deregulation of the market is likely to lead to a flood of corporate farming companies, who can afford to pay higher prices for land and resources. This could lead to an increase in prices in the market and make it difficult for small farmers to stay competitive. There are also concerns that the deregulation of the market might lead to corporate farming taking over the market, resulting in a monopolization of the agricultural market, which could further reduce the bargaining power of small-scale farmers.
In addition to this, with the introduction of the bills, there has been a lack of consultation with farmers. This has left them feeling frustrated and betrayed, as they felt their concerns and opinions had not been taken into consideration. The lack of consultation could mean that the new laws will make it even more difficult for small farmers to stay competitive, leaving them at the mercy of large agro-businesses.
The three agricultural bills have the potential to drastically alter the agricultural market in India. While it might benefit some, it is likely to be detrimental to small farmers, who are already facing a financial crunch due to declining profit margins. With the deregulation of the market, the bargaining power of small farmers is likely to decrease and they may become even more vulnerable than they were before.
Price Determination and Government Subsidies
Another major concern associated with the introduction of the three bills is price determination and government subsidies. Since the Agricultural Produce Marketing Committee is no longer in charge of regulating the market, farmers are concerned that the prices of commodities will be determined by the free market and not by the government. This could lead to farmers receiving lower prices for their produce, as the government will no longer be mandated to intervene when the prices of commodities shoot up.
Furthermore, there is a concern that the deregulation of the APMC markets might lead to a decrease in the availability of subsidies. Since the government is no longer in charge of regulating the market, farmers are likely to be at the mercy of the big companies and may struggle to negotiate good prices for their produce. This could result in them receiving fewer subsidies and other support from the government.
In addition to this, the deregulation of the market could also lead to more competition and less stability in the market. The lack of regulation could make it difficult for farmers to predict the prices of commodities and to ensure that they are getting fair prices for their produce. This could lead to farmers being unable to cover production costs, or being unable to stay competitive in the market.
The three bills have had a major impact on the agricultural market in India, and the concerns of farmers have to be taken into consideration. The deregulation of the market, coupled with the lack of government subsidies, could lead to farmers receiving lower prices for their produce and struggling to stay competitive. This could potentially put small farmers at a disadvantage, and leave them more vulnerable than they were before.
Farmer’s Rights and Accessibility to the Market
The final concern associated with the three bills is that of farmer’s rights and accessibility to the market. With the introduction of the bills, farmers are worried that they will no longer have a say in the price negotiation and that they will be at the mercy of large corporations. This could lead to farmers being exploited and receiving lower than expected prices for their produce.
In addition to this, the deregulation of the market means that farmers will no longer have direct access to the Agricultural Produce Marketing Committee, which has traditionally been the primary source of information and support for farmers. Moreover, since the government will no longer be mandated to intervene when the prices of commodities shoot up, there will be limited protection from exploitation from large companies.
The deregulation of the market could also lead to a decrease in the number of Mandis (markets) available for farmers to access. This could mean that farmers have limited access to markets and are unable to get the best prices for their produce. This could potentially lead to farmers being unable to make a profit or cover their production costs, leading to a decrease in their income.
The three agriculture bills have been a contentious issue in India, as farmers are concerned that they will be at a disadvantage. The deregulation of the market and lack of consultation could lead to farmers being exploited, receiving lower prices for their produce, and having limited access to markets. This could potentially lead to a decrease in their income, and make it difficult for them to stay competitive in the market.
