Three bills aimed at transformation of agriculture in the country and raising farmers’ income were introduced in Lok Sabha to replace ordinances promulgated on June 5, 2020.

Union Minister of Agriculture and Farmers’ Welfare, Rural Development and Panchayati Raj Narendra Singh Tomar introduced The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, and The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020, while Minister of State for Consumer Affairs, Food and Public Distribution Raosaheb Patil Danve introduced The Essential Commodities (Amendment) Bill, 2020, in the Lok Sabha.

Seeking permission of the Chair to introduce the Bills, Tomar said that the measures contained therein will enable barrier-free trade in agricultural produce, and also empower farmers to engage with investors of their choice. He said that these steps are only the latest in a series of measures taken by the government, which shows its continuous commitment to championing the cause of welfare of the farmers of India.

The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, seeks to provide for the creation of an ecosystem where the farmers and traders enjoy the freedom of choice relating to sale and purchase of farmers' produce which facilitates remunerative prices through competitive alternative trading channels to promote efficient, transparent and barrier-free inter-state and intra-state trade and commerce of farmers' produce outside physical premises of markets or deemed markets notified under various state agricultural produce market legislations; to provide a facilitative framework for electronic trading and for matters connected therewith or incidental thereto.

Farmers in India suffered from various restrictions in marketing their produce. There were restrictions for farmers in selling agri-produce outside the notified APMC market yards. The farmers were also restricted to sell the produce only to registered licensees of the state governments. Further, barriers existed in free flow of agriculture produce between various states owing to the prevalence of various APMC legislations enacted by the state governments. This legislation is a historic step in unlocking the vastly regulated agriculture markets in the country. It will open more choices for the farmer, reduce marketing costs for the farmers and help them in getting better prices. It will also help farmers of regions with surplus produce to get better prices and consumers of regions with shortages, lower prices.

The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020, seeks to provide for a national framework on farming agreements that 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 and for matters connected therewith or incidental thereto.

Indian agriculture is characterised by fragmentation due to small holding sizes and has certain weaknesses such as weather dependence, production uncertainties and market unpredictability. This makes agriculture risky and inefficient in respect of both input and output management. This legislation will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs. It will reduce cost of marketing and improve income of farmers. Farmers will engage in direct marketing thereby eliminating intermediaries resulting in full realisation of price. Farmers have been provided adequate protection. Effective dispute resolution mechanism has been provided for with clear time lines for redressal.

The Essential Commodities (Amendment) Bill, 2020, seeks to remove commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. This will remove fears of private investors of excessive regulatory interference in their business operations. The freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector/foreign direct investment into agriculture sector.