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Summary of the Payment and Settlement System Act, 2007
by: Adv. Kishan Dutt Kalaskar 2023-02-28 18:47:16
by: Adv. Kishan Dutt Kalaskar 2023-02-28 18:47:16
by: Adv. Kishan Dutt Kalaskar 2023-02-28 18:10:41
by: Adv. Kishan Dutt Kalaskar 2023-02-03 22:32:13
by: Admin 2023-02-01 16:45:35
by: Admin 2023-01-30 17:32:25
by: Admin 2023-01-30 17:16:37
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Rafale Deal And All About The Controversy
By: Adv. Kishan Dutt Kalaskar
Date:26 September 2020
Civil
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Views:58484
Likes:0Contract farming is a procedure where agricultural production is being carried out based on the agreement between the buyer and the farm producers.
The scenario in India
The concept of contract farming is not new to India. Under the model APMC act, 2003 contract farming was legalized and the Agricultural Produce Marketing Committee (APMC) with given the responsibility to record the contracts. Presently, contract farming requires registration with APMC in few states. This means that the contractual agreements are recorded with the APMCs, which can also help in resolving the disputes arising out of these contracts.
The centre's new ordinance, i.e. "The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance" is an endeavour to provide a national framework for contract farming by bringing uniformity in the provisions of contract farming under the various state regulations enacted under APMC acts. It provides for a three-level dispute settlement mechanism: The Conciliation Board, Sub-divisional magistrate and Appellate Authority
The ordinance has three significant features:
Advantages of Contract Farming
To the Farmers
To the Client
Limitations
The new ordinance of June 2020 makes a good move in that course by stating the intention to promote contract farming.
Understanding The New Reforms For Farmers
Around three months ago, the Government of India had issued three ordinances, all these three ordinances are in relation to agriculture, farming, and it has the spirit of reforms to create ease for the farmers.
Usually, ordinances are issued only as emergency laws and later on, they have to be converted into proper legislation. Recently the Lok Sabha has passed one such ordinance, and the other two is in the pipeline.
This has led to protest by farmers in states like Punjab and Haryana, and the agitation might soon spread to Rajasthan, Madhya Pradesh and Uttar Pradesh too. Withstanding the pushback PM Modi has created that the farmers will eventually benefit from these ordinances.
Understanding the Ordinance
The first ordinance is the "Farmers Produce trade and commerce ordinance". This ordinance attempts that the farmers are able to sell their produce at other places except the APMC (Agricultural Produce Market Committee) regulated Mandis. The whole idea behind this is to expand the choice given to farmers, and if a farmer gets a better deal somewhere with a private buyer, he can opt-out from the APMC Mandi and sell it there.
The other two bills have not yet been passed, but this article will throw some light on it.
The second bill, i.e. "The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance". provides a regulated framework so that farmers could enter into contract farming.
The third bill, i.e. "The Essential Commodities (Amendment) Ordinance" allows the economic agents to get the food article stocked freely without the fear of being prosecuted for hoarding.
Therefore, what we observe is the idea of all these three bills was mainly to liberalize the market for farmers and to make the whole system more efficient for or better price realizations for all the concerned people, especially the farmers.
Why are the Farmers agitated?
The first ordinance in effect is the existing Mandi that is established under APMC have been excluded from the definition of trade area under the new legislation. Government has the defence that the creation of an additional trade area outside the Mandi will provide farmers with the freedom of choice to conduct trade in their produce.
The protesters say that this legislation will confine APMC Mandi to the physical boundaries and give a free hand to big corporate buyers.
The farmers are mainly concerned about the future of the minimum support price (MSP).
Every year the government gets into a huge procurement program to buy massive quantities of wheat and rice at MSP, cause of which the farmers got an assured price per quintal, which was good income. The Mandi and APMC system is diluted or dismantled, and then there is no guarantee that the farmer will get the assured minimum price. Therefore, the government procurement system acts as a safety question and asked to the bargaining power of the farmers. The second point is that the new legislation has broadened the definition of traders; it defines traders as 'any person with a pan card can buy from the farmers who have to produce in the trade area.'
Secondly, in the present Mandi system, arhatiyas(commission agents) have to get a licence to trade in Mandi, protestors say that are arhatiyas half credibility as a financial status is verified using the licence approval process, but in the present law there is no press verification process as such for the farmer to trust the trader.
Interpreting the impacts of the legislation
We can look at the changes through two diametrically opposite ways.
On the other hand, one can understand that why the farmers are so sceptical about these markets, a good example of this is a ban on onion exports; the government prioritized the interest of the consumers over the interest of the farmers. This has not happened for the first time; there are many incidents wherein the decision of the government to protect the consumer from high prices has resulted in farmers being robbed. It can be argued that MSP is the embodiment of this distrust.
Government's Defence
Government has assured and said that these provisions would be beneficial for everyone, be it, farmers, consumers or traders as almost all the agricultural experts were struggling for these reforms in the agricultural sector for a long time. It will lead the farmers to realize a better price as this is forward-looking legislation, and it is a win-win situation for everyone.
Conclusion
As we are unable to get a clear picture of what impact this legislation will have on the farmers, traders and consumers, the only thing we can do is to wait and watch the implementation of these legislations. At present, the government shall try to devise a mechanism to convince the farmers that this legislation eventually will benefit them, and sort out the distress over the minimum support price, which the farmers possess, as it gave them a fixed income.
Update on the Bills
The three bills which passed by the Parliament - Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 and the Essential Commodities (Amendment) Bill, 2020, were awaiting presidential assent amid massive uproar from opposition parties and President Ram Nath Kovind on Sunday, 27th September 2020, gave his approval to these farm bills that have led to nationwide protests by farmers and opposition. The President’s assent came days after opposition parties met him and requested him to withhold his approval to the Centre's contentious farm bill. After which, the opposition criticized the government and called it a ‘murder of democracy’ both for the manner in which the legislation was passed by the parliament and also for failing to protect farmer’s interests. They also referred the legislation as both ‘anti-farmer’ and ‘unconstitutional. Soon after the President's assent to the bills, the Maharashtra government announced that it would not implement the ‘anti-farmers' law in the state.
NDA’s oldest ally, Shiromani Akali Dal has exited the NDA government over the contentious farm legislations and contended that he has sided with the opposition on the ground that the legislation would hurt farmers interests and called it a ‘dark day’ when the President gave his assent to the bill since there were hopes that President will act as nation’s conscience and return Bills to Parliament.
Farmers also expressed agitation that the Centre's farm reforms would surface the way for knocking down of the minimum support price system and they would be at the ‘mercy’ of big corporates while the Union Minister Ravi Shankar Prasad assured them that they will not have to sell their produce at less than MSP.
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