The New Farmers Law

The New Farmers Law

The new farmer’s Law has raised a lot of concerned in the country for past almost more than one year. There have been arguments for the Act and against the Act and there have been supportive arguments from both the sides. Although it is very early to say anything on the repercussions of the Act on the long standing and the after effects of it but we are going to discuss the merits and demerits of the Acts.


v The first argument about the issue is as to whether the Central Government is empowered to make laws in the field of Agriculture or nor?


Entry No. 42 of the Union List provided under the Seventh Schedule of the Constitution of India empowers the Union Government for making laws for Co-operative Federalism  and Entry no.33 in the  concurrent list again empowers the Union Government to make laws pertaining to trade and commerce pertaining to the production, supply and distribution of the products of any industry and these two entries if read together somehow empowers the Union Government to makes laws in this field but when we read entry no.14 of the Constitution, this makes it clear that only State is empowered to make laws in the field of Agriculture. It is noteworthy that the Parliament is empowered under Entry 34 of the Concurrent list to control the price of commodities. However, the exclusive warrant to bring substantial changes in the agricultural sector vests ab initio in the State Legislatures. Therefore, from the bare reading of the entries in the Lists under VII Schedule, the Union Government has done indirectly which it was not empowered and entitled to do directly.

v Effect on the APMCs in the State after the newly introduced agricultural trade and commerce mechanisms (Private Mandi).

It is argued by the Union Government and the supporters of the Act that the implementation of the these Acts will not result in the eradication of the APMCs in the State. It would rather generate a healthy competition between the APMCs and the newly introduced agricultural trade and commerce mechanisms. The objective of regulating agricultural markets was to protect farmers from exploitation by intermediaries, ensure better prices and timely payments which it failed to achieve. It is also argued that it will give better infrastructure, enticing incentives to the Farmers. The farmers need not to pay profligate commissions to the Commissioned Agents and the 2% Mandi Tax is also waived in this system. Whereas on the contrary it is stated against the Acts is that it is beneficial for private and big business houses only.  regulate the supply of certain essential commodities only under exceptional/extraordinary circumstances and lifting of the stock-holding limit with some conditions is derisive as it will lead to inconceivable hoarding and inflation in the market and the Government would have a limited and emergent monitoring of prices of the essential commodities. The stock limits of the essential commodities have also been uplifted which could in future will endanger the rights of the farmers. The business houses will have an edge over the Farmers since they can establish their warehousing hubs, logistics hubs to stock the agricultural produce for a longer period.

            The 2nd Bill has made the farmer a king for the first time in the seventy-one years of Independence. The farmers now, out of their own volition, are free to contract with any Sponsor for the buying and selling of his farm produce. Even the Sponsor can agree in the agreement to provide farm services such as machinery, technology, tools, etc. indispensable for the production to the Farmer. The farmer will have a sense of security that even before the production of the farming produce, someone is bound by the written farming agreement to purchase his produce. To ensure best value to the Farmers, it suggests pre-determination of purchase price and incorporation of the same in the WFA. If the price is subject to variation, then it protects the Farmer by making a provision for a guaranteed price to be paid for such produce and a clear price reference for any additional amount over and above the guaranteed price, including bonus or premium and makes it mandatory to annex the mechanism for determining such purchase price, guaranteed price or additional amount to the WFA. The guarantee price is another form of MSP, the only difference is that earlier it was granted by the Government now it will be based on the mutual decision of the Farmer and the Sponsor. So, like the MSPs in Mandis, there is a guarantee price in the Contract Farming. It puts more obligation on the Sponsor only to ensure that the taking and acceptance of delivery of the farming produce befalls within the mutually agreeable time. Impartiality and fairness are also ensured by the appointment of a third -party qualifies assayer to monitor the cultivation and rearing.

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