Here’s why Indian farmers find the new agri-laws problematic A summary of key points in each law explaining how they can be misused

27, Jan 2021 | CJP Team

Even as the nationwide farmers’ agitation is still going strong, here’s a closer look at exactly what the new agricultural laws say and why they adversely impact Indian farmers, especially small and marginal farmers.

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Farm Bills Factsheet

  • Objective - Intends to “promote efficient, transparent and barrier-free inter-state and intra-state trade and commerce of farmers’ produce outside the physical premises of markets.”
  • Under the new law, farmers can sell their produce in any market. However, since most farmers lack the accessibility and transport to acquire larger markets, this makes it easier for big corporates to buy from all parts of India for the cheapest price possible.
  • According to the Act, the government does not guarantee a Minimum Support Price (MSP) for trading outside APMC mandis. Even if government declares a minimum support price, there is no guarantee that farmers will get that price unless the government actively participates in the market to guarantee MSP.
  • Currently, state Governments like those of Punjab and Haryana receive a good amount of tax on sales through APMC mandis. The new law will eliminate the tax the state tax, thus imposing a burden on the revenue.
  • Farmers fear that the practice of FCI procuring at subsidised rates from farmers for public distribution will also end with this law.
Swaminathan Commission - The Swaminathan Committee had recommended that the support price should be one and a half times (C2 + 50%) of the cost of production. However, despite being one of the Modi government’s 2014 election promises, the new law has been enacted without due debate or discussion and without any provision of a minimum support price. If the support price becomes a legal right, the big corporates who aim to conquer the market through the new law will have to pay that price or more. The absence of the same is why it is being dubbed a pro-corporate law. Furthermore,
  • Section 13 provides “No suit, prosecution or other legal proceedings shall lie against the Central Government or the State Government, or any officer of the Central Government or the State Government or any other person in respect of anything which is in good faith done or intended to be done under this Act or of any rules or orders made thereunder.”
  • In such a scenario, the farmer has to approach the Sub-Divisional Magistrate (under section 8) since section 15 provides “No civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter.”
  • Objective - “Protects and empowers farmers to engage with agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce at a mutually agreed remunerative price framework in a fair and transparent manner.”
  • Allows companies to enter into contract farming agreementswith the farmers which means that the price and quality of the produce will be fixed prior to farming through a contract and they will get a guaranteed fixed price for the produce.
  • The new law does not explicitly guarantee that companies must mandatorily pay MSP to farmers even when engaged in contract farming. Farmers need a strong, regulated and assured market.
  • Section 18 of the Act states, “No suit, prosecution or other legal proceeding shall lie against the Central Government, the State Government, the Registration Authority, the Sub-Divisional Authority, the Appellate Authority or any other person for anything which is in good faith done or intended to be done under the provisions of this Act or any rule made thereunder”.
  • Section 19 bars the jurisdiction of civil courts to adjudicate on any matter pertaining to the farmers.
  • Objective - Lays down that the Centre may regulate essential food items such as cereals, pulses, potatoes, onions, edible oilseeds and oils under extraordinary circumstances such as war, famine, extraordinary price rise and natural calamity.
  • Without government regulation of essential crops, prices will widely fluctuate, but can also lead to heavy hoarding of stocks.
  • Earlier, storage of essential crops like oil seeds, onions, cereal, pulses, potatoes for a long period were not permitted. With the 2020 amendment, all these crops will no longer fall under the category of essentials and corporate houses who desire to enter the food grain market can easily store such crops for its benefit. However, these will be considered as essential items in times of unforeseen circumstances such as war and natural disasters.
  • Entry 33 of Concurrent List provides that the Parliament can make laws in ‘public interest’ on matters of trade and commerce, supply and distribution of industrial products. However, agricultureis covered under entry 14 of the State List under the Seventh Schedule of the Constitution.
  • Since under List III, Central laws prevail, the Union Government can argue that there has been no encroachment of jurisdiction and its well within its powers to pass laws on intra and interstate trading, contract farming, preventing states from receiving any fees outside the APMC mandi, etc.
  • However, if the industrial products (mentioned in entry 33) like edible oilseeds and oils, cattle fodder, raw cotton and jute, cotton seeds fall under the ambit of the broad category of agriculture, the need for States to place agriculture under its List renders itself absolutely redundant.
  • This is a principle used to determine the constitutionality of a legislation where there is conflict of legislative powers conferred on Federal and State Legislatures with reference to Lists.
  • According to this doctrine, it is examined to check its “true nature and character” in order to ascertain in what list it falls.
  • It provides a degree of flexibility. It is widely used in determining whether the state is within its power to make statute which involves a subject mentioned in the union list of the constitution
  • Therefore, when agriculture largely falls under the State list, and is only incidentally covered in the Concurrent List, the farm laws seem to have been hastily passed by the Parliament in dubious circumstances.
  • This doctrine tests the competency of a legislature to enact a law. It is derived from the Latin phrase Quando aliquid prohibetur ex directo, prohibetur et per obliquumwhich means whatever cannot be done directly, it cannot be done indirectly.
  • This doctrine of colourable legislation is applied when a Legislature does not have the right to make law upon a particular subject but indirectly makes one.
  • When the Union does not have the power to make laws on agricultural reforms, as it is a State subject, it can certainly not use incidental entries to invoke its power.
  • The phrase “any other person” in sections 13 and 18 of the Promotion and Facilitation; and Empowerment and Protection Act is strangely unfortunate and wide, which could potentially include big corporate companies, large retailers etc that also enjoy immunity from prosecution.
  • In Anita Kushwaha vs Pushap Sudan2016 8 SCC 509, the Supreme Court had held that access to Justice is a Fundamental Right guaranteed to citizens by Article 14 and Article 21 of the Constitution of India.
  • A dispute involving civil consequences (contractual and commercial) cannot be adjudicated by SDM’s and ADM’s that are essentially run by executive authorities. These are administrative bodies that lack the expertise to comprehend the plight of the troubled farmers.
  • So, if there is an issue that needs redressal, the farmer has to approach the Sub-Divisional Magistrate (under section 8) only and no civil courts as it is barred by section 15 of the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act that provides “No civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter.”



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