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  • Writer's pictureSaman Rahman

The Farm Acts – A Shift towards Capitalism

Three new farm laws were passed by the parliament in the month of September, 2020 which invoked widespread criticism across the country. India is land of farmers, the agricultural industry provides employment to over 60% of the population. This sector alone contributes nearly about 17% of the GDP.

Acts introduced

These ordinances were introduced in Lok Sabha by Narendra Singh Tomar, the Minister of Agriculture and Family Welfare. The ordinances were enacted by Lok Sabha on 17th September 2020 and by Rajya Sabha on 20th September 2020. It received the President’s Assent on 27th September 2020.

The Farmer Produce Trade and Commerce (Promotion and Facilitation) Act, 2020

This Act promotes inter-state and intra-state trade of farmers produce beyond the perimeter of Agricultural Produce Market Committee i.e., now farmers can sell their produce to private owners or any other person (retailers, private companies, online market etc.). This act also bars the state to levy any tax or cess on the produce.

By increasing the perimeter of trade the act has enabled the farmers to trade their produce in the open market as earlier they were only trading with AMCP, and since the state cannot levy any taxes it will be helpful to farmers. Now that the farmers can sell their produce in the open market they are more prone to fraud and corruption by the private buyers. The state was able to generate a certain amount of income by levying taxes on the purchase or export of product as the amount was invested in storing and exporting of the product by the state.

The Farmer (Empowerment and Protection) Agreement on Price Assurance Farm Service Act, 2020.

This Act promotes contract farming i.e., trade between the farmers and the purchaser will be secure with a contract between them which will be binding on the buyers. Contract farming will ensure a fixed amount of income for the products and this will attract private investors. Majority of farmers are uneducated they don’t know the intricacies of the contract they don’t have enough funds to consult a lawyer they can easily be fooled by private buyers and easily be exploited.

The Essential Commodities (Amendment) Act 2020

This Act removes commodities like cereal, pulse, oilseeds, onion, edible oils, and potatoes from the list of essential commodities. It also removed the ban on stockpiling except for certain food products that can be regulated only under extraordinary circumstances i.e., war, famine and natural calamity.

It will promote economic growth and will attract private sector and increase the flow of foreign direct investment in the agricultural sector. Stockpiling will lead to price fluctuation and low price for farmers after harvest, it will also promote the black market business.

Conclusion: Why it is opposed?

The act is more in favor of private buyers (capitalist). Procurement is not done for all the crops but only for some crops. As private investment may vary and so will be the MSP and it is also not fixed. In earlier structure, there was the middleman between the farmers and the retailers which promoted corruption now also there will be the middle man to guide farmers and investors; so, middlemen influence will remain same.

Further, agricultural sector is the main pillar of the Indian economy giving it in the hand of private investors and companies will prove to be fatal. Government is the major stakeholder can shield farmers from getting exploited and also guarantee legal rights to farmers but the same will not be in case of private buyers. Agricultural Product Market Committee needs to be reformed but there is no replaced it. Removal of APMC and government control will affect employment as the major working-class of the sector is employed in these APMC and it will severely affect daily wages workers as private sectors will focus on employing educated masses. All these issues concerned the farmers across the nation, which led to agitations and protests.

*The author of this post is Saman Rahman a law student from the Faculty of Law, University of Lucknow; and, a member of the Editorial Board.

Image Source: CNBC

Article Number: 2021/LKLR/04B25


The views expressed in this article belong to the author/s and do not necessarily reflect those of the Journal.

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