explained-in-three-ordinances-the-provisions-that-bother-protesting-farmers

 

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Context: The Punjab and Haryana farmers are demanding a roll back of the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 and the Essential Commodities (Amendment) Ordinance, 2020.

Background:

  • The three controversial ordinances are:
    • The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 allows intra-state and inter-state trade of farmers’ produce beyond the physical premises of APMC markets.  
      • State governments are prohibited from levying any market fee, cess or levy outside APMC areas.
    • The Essential Commodities (Amendment) Ordinance, 2020 for amending the Essential Commodities Act to deregulate trading practices in agricultural markets (mandis).
      • The changes to the Essential Commodities Act, 1955, will “deregulate” various agricultural commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from stock limits, except in case of natural calamities like famine.  
      • It will allow farmers to sell their crop to anyone.
      • This will remove fears of private investors of excessive regulatory interference in their business operations.
    • The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, provides a framework for farmers to enter into direct contracts with those who wish to buy farm produce.
      • So far, a farmer cannot directly sell his produce to consumers or food processing companies; he has to go through a licenced trader as per the APMC Act.
      • But from now on, any farmer may enter into a contract with any person or company to sell his produce. 
      • Dispute resolution: Instead of using the regular judiciary for dispute resolution between parties, the ordinance delegates dispute resolution to the executive (sub-divisional magistrate), who will not be bound by rules of procedure.
      • This gives the government more powers than the parties in the case.
      • Suo motu cases: These are cases where neither of the parties to a farming contract has raised a dispute, but the authority still can enter into the contract and make changes. 

The Provisions bothering farmers are discussed as follows:

  • Definition of ‘trade area’
    • The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 defines “trade area” as any area or location, place of production, collection and aggregation including (a) farm gates; (b) factory premises; (c) warehouses; (d) silos; (e) cold storages; or (f) any other structures or places, from where trade of farmers’ produce may be undertaken in the territory of India.
    • The definition excludes existing mandis established under APMC Acts.
    • The government says the creation of an additional trade area outside of mandis will provide farmers the freedom of choice to conduct trade in their produce.
    • The farmers say this provision will confine APMC mandis to their physical boundaries and give a free hand to big corporate buyers. 
      • The APMC mandi system has developed very well as every mandi caters to 200-300 villages. 
  • Definition of  ‘trader’
    • The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 defines a “trader” as “a person who buys farmers’ produce by way of inter-State trade or intra-State trade or a combination.
    • Thus, it includes processor, exporter, wholesaler, miller, and retailer.
    • Any trader with a PAN card can buy the farmers’ produce in the trade area.
    • A trader can operate in both an APMC mandi and a trade area. 
    • However, for trading in the mandi, the trader would require a licence/registration as provided for in the State APMC Act. 
    • In the present mandi system, arhatiyas (commission agents) have to get a licence to trade in a mandi.
    • Credibility issue: The protesters say arhatiyas have credibility as their financial status is verified during the licence approval process. But how can a farmer trust a trader under the new law.
  • The provision on ‘market fee’ 
    • The ordinance states that “no market fee or cess or levy, under any State APMC Act or any other State law, shall be levied on any farmer or trader for trade and commerce in scheduled farmers’ produces in a trade area”. 
    • Government says this provision will reduce the cost of transaction and will benefit both the farmers and the traders.
    • Many states are not making transactions in mandis cost-efficient
    • Farmers say that by removing the fee on trade, the government is indirectly incentivising big corporates as this provision does not provide a level playing field to APMC mandis.
    • Under the existing system, market fee charges in states like Punjab come to around 8.5% which include a market fee of 3%, a rural development charge of 3% and the arhatiya’s commission of about 2.5%.
  • Dispute resolution mechanism
    • Farmers say the ordinance does not allow them to approach a civil court.

The Centre says that it was persuading states to implement the Model APMC Act, 2002-03. But the states did not fully adopt it. Therefore, the Centre had to adopt the ordinance route. It will lead to helping farmers realise a better price. 

Imager Source: Economic Times

Source:

https://indianexpress.com/article/explained/in-three-ordinances-the-provisions-that-bother-protesting-farmers-6598905/

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Q) Farmers in Punjab and Haryana have been protesting against recent ordinances promulgated by the Centre. Examine the various issues involved. (250 words)