Agriculture Reforms : Free Market

The Upper House of Parliament (Rajya Sabha) on Sunday (20-09-2020)  passed two contentious farm bills, These bills will now be sent to President Ram Nath Kovind for his assent.

1) THE FARMERS' PRODUCE TRADE AND COMMERCE ( PROMOTION AND FACILITATION) BILL, 2020

1. Farmers are free to sell their produce to anybody, anywhere
2. It removes all barriers for intra and inter state trade in agriculture produce.
3. It supports seamless electronic trade 

 How does it helps the farmers ?

1. Ends the monopoly of traders.
2. Engenders competition among buyers 
3. Yields  better result to farmers and raises incomes . 

 2) THE ESSENTIAL COMMODITIES ( AMENDMENT ) BILL,2020

1. It removes cereals, pulses, oilseed, edible oil, onion and potatoes from the list of essential commodities 
2. Does away with imposition of stock limit except under exception conditions  

How does it help ?

1. Ends harassment of businessmen and traders
2. Likely to attract private investment in cold storage, warehouses, processing
3. Helps reduce wastage as storage facilities improve 
4. Brings price stability and raise farm incomes

3) FARMERS (EMPOWERMENT AND PROTECTION) AGREEMENT OF PRICE ASSURANCE & FARM SERVICES BILL,2020

1. The bill relates to contract farming 
2. Allows farmers to tie up with large buyers, exporters and retailers

How does it help ?

1. Farmer will have assured price before sowing 
2. Transfers market risk from farmer to sponsor 
3. Gives farmers access to high quality seeds, fertilisers, pesticides 
4. Will attract private investment in farming and link farms to global markets

WHY IS THERE OPPOSITION TO THESE REFORMS ?

1. The measures threaten the elaborate system mediating between farmers and consumers 
2. Agri-produce selling involves commission agents, state mandis and bureaucracy 
3. APMC mandis where farmers are forced to sell are heavily politicised Commission agents get a 2-2.5% cut in sales and have a lot of political clout
4. If the reforms are implemented, this commission and patronage structure will disappear

WHY THESE REFORMS WERE NEEDED ?

India has phenomenal potential in agriculture, but archaic laws and regulations have held back investments and depressed productivity

 REASONS FOR DECLINE

1. No major reform for decades 
2. Severe restrictions on sale of farm produce 
3. Draconian laws against businesses that need to keep food stocks
4. Middlemen grab a big chunk of profit, while farmers suffer 
5. Poor access to high quality farm inputs

SOURCE: ET

-Rohit Meena