Tears stream from the eyes of the vast multitude of farmers camping on the outskirts of Delhi. Brown, watery eyes haze and blur the hundreds of posters and flags these people carry – many young, many old, women and men. Two months and more have passed since the formulation of nationwide farmers’ protests (but mainly concentrated to the North of India: Punjab and Haryana). While the government spars with the desperate (mainly rural and marginal) farmers, the ordinary protesting farmer spars with unfairness – be it the media, economists, capitalists or simply, the common man. There lies some truth in the actions of the farmers, who have protested, rallied, and held their tongues when radically insulted by tabloid journalists. In this article, the author aims to examine the three laws.
The government passed three laws: The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 and The Essential Commodities (Amendment) Act, 2020. They are, more often than not, referred to as ‘the farm laws/bills’. As is tradition, these laws have been passed as ordinances to ensure their quick implementation as soon as possible. Firstly, The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020. This act (henceforth referred to as the FPTCA) throws farmers into a redefined relationship with traders, out of their conventional trading ecosystem, and discussing electronic agricultural trade for common farmers as well.
It is important to note that the author disagrees with the government upon the farm laws for four main reasons, all of which are extrapolated in the below paragraphs:
They hurt the overall developmental capacity of farmers – income, living standards, field size et cetera.
They provide a wholly unregulated environment which is not conducive to the growth of farmers.
They have the potential to destroy the agricultural diversity of India for the profit motive.
They hurt the common man’s need for regulated food pricing and increase food insecurity by preventing foodstuff from being affordable.
FPTCA
Chapter 1
Chapter 1 of the FPTCA examines the basic definitions of terms which are utilised in the act. It gives the Act’s explication of terms such as ‘electronic trading and transaction platforms’, ‘inter-State trade’, ‘trader’ et cetera.
Chapter 2
Chapter 2 of the FPTCA is the crux of the act. It contains the provisions which endear so much to the capitalist trading sections and embitter the farmers. It outlines the new dynamic relation between traders and farmers, of which the content is not problematic as much as the lack of it.
Article 3
Article 3 states that henceforth, farmers and traders will have the absolute freedom to conduct market activities in any trade area in any part of the territory of India. Additionally, it enables traders to conduct both intra-State and inter-State dealings in much the same way. The primary quandary with this article is, as the author mentioned earlier, not the content itself, but the absence of it. This article leaves the entire trading system vulnerable to all kinds of market manipulation. With the deficiency of any active regulation with the capacity to protect farmers from the legal and deceitful despicability of market manipulation tactics, this could lead to a slump in farmer incomes to levels one cannot fathom (from which recovery would take decades). Let us note the situation in Bihar after a similar retraction of their APMC Act in 2006. The entire state’s agrarian populace fell to shambles.
As these figures (Courtesy of a 2019 Report by NCAER) show, after a brief period of uplifting income between 2007 and 2010, incomes tanked once again. Farmers got lesser and lesser cash for their crops – and this is worse on adjusting for inflation. Let us note, however, that land productivity (indicated roughly by the red line) has been on a normal increase – implying that there is no correlation between declining incomes and crop production. From the above figure, it can be seen that whosoever profits from starving people, it is not the farmers. Furthermore, the lack of regulation (or the government’s tongue-in-cheek capitalist laissez-faire approach) led to more than 90% of trading taking place within the rural hamlets themselves, often for what the farmers considered ‘unfair prices’. Must we even consider this law, when the overwhelming evidence mounts against it from the first article of importance?
Article 4
Article 4 contains 3 subdivisions, all of which deal with the payment structure and eligibility. Primarily, it defines a trader to be one who possesses a Permanent Account Number as per the Income-tax Act of 1961. However, as much as it keeps out the swindling riff-raff, they were never the real problem. The real problem is the literate, exploitative capitalist, who has a PAN. These acts try to falsely protect the farmers from threats they do not even face (generally). Hyping up these claims will do little to ease the farmers. The article also provides the Central Government with the capacity to create an electronic registration system. Again, even if it is created (the Act makes it explicit that it is purely on the decision of the Government), it is remarkably easy for big businesses with far more leverage to register themselves in these registries. Another dilution to what may once have protected farmers from the diabolical clutches of agricultural conglomerates. Finally, it states the payment deadlines for traders to pay farmers.
Article 5
Article 5 contains 2 subdivisions, both relating to the contextualisation of electronic trading platforms. Subject to only some criteria for fair trade assessment, which seems to evade fair pay structures, these electronic traders are equating to other traders by the law. This is a large oversight on the part of the government. Firstly, anyone with the capital requirements to run an electronic commerce platform, for any period longer than its licensing period, has enough capital to have greater leverage than any meagre farmer. The guidelines they must follow are on the mode of trading, fees, technical parameters including interoperability with other platforms, logistics arrangements, quality assessment, timely payment, dissemination of guidelines in the local language of the place of operation of the platform. Even this is a massive oversight since more than 32-35% of Indian farmers are illiterate. How will it help them to have neatly printed ink blurs shoved into their hands? Thankfully, we have some respite (but only relatively). The 2nd provision under article 5 allows the government to glean information on the procedures of the e-trading platform, but only just.
Article 6
Article 6 exempts traders and farmers from any sort of cess or levy under any state APMC Act on these purchases. The most crucial point to note here is the blatant violation of the federal principles of the Indian Constitution. While entry 33 of the Concurrent List allows them to legislate on the issue, it nevertheless cheats states of the capacity to decide for themselves as per entry 14 of the State List. By bypassing the authority of every Indian state to decide for itself, the Central Government might as well have declared their motive of making India a unitary state; they have already set a very dangerous precedent. Another significant change is the adoption of an exceptionally liberal stance, which won’t dissuade any form of trade, even if it were to be deemed harmful. Without the moderating influence of any kind of governmental intervention in this scenario, a dangerous situation will arise, with farmers, due to their lack of leverage, at the feet of capitalists.
Article 7
Article 7 elaborates on a potential option for a Price Information and Market Intelligence System, which essentially provides a framework for the above changes to take place smoothly.
Chapter 3
Chapter 3 of the FPTCA relates to conflict resolution with standard protocol in place.
Chapter 4
Chapter 4 discusses penalties for the contravention of any of the above articles and laws with relation to the articles. Between a normal offline trader and a farmer, there appears to be no distinction, and rightly so. However, due to the lack of regulation in the Act, there is a high propensity for traders misleading farmers, as has happened countless times before this large-scale deregulation spree. Hence, a penalty amounting to 1/3rd of a farmer’s average yearly income (Rs 25,000), requires far more thought. It is also important to note that traders are usually better equipped in scenarios of civil law, which tends to give an advantage to the trader due to their capital, once again. Nonetheless, these arguments are minor in comparison to the rest of the Act.
Chapter 5
Chapter 5 contains miscellaneous provisions concerning the Act. However, its lack of federal sense is unnerving, eerily foreshadowing governmental unitisation of India.
Article 14
Article 14 states that provisions in State APMC Acts inconsistent with this Act would all be nullified by this Act. This rears the ugly unitary head of Indian democracy. By directly threatening federalism, this Act may as well invite others like it. One must understand that the only government with potent jurisdiction to properly implement any act of this level is the State government. Unlike a country in Europe, where the population of a state is usually less than half of that of UP, India was 1.3 billion people, many of whom have different cultures and practices. In India more than anywhere else, one size does not fit all. It would have been best to leave it to state governments. At that point, when even state governments – like Bihar – could not satisfactorily achieve the goal the BJP supposedly wishes to see fulfilled, perhaps it is a sign that there is something inherently wrong with the farm laws.
FAPAFSA
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 (Henceforth termed as the FAPAFSA) is the second farm law. The Act relates to farming agreements and protection in the same. However, as is the case with most farm laws, the problems lie with what is (deliberately?) missing rather than the content itself. It also includes a chapter on dispute resolution, which has spurred controversy as well.
Chapter 1
Chapter 1 of the FAPAFSA includes the basic definitions of terms used in the remainder of the Act. An important definition is that of ‘farming agreement’.
Article 2 (g)
"farming agreement" means a written agreement entered into between a
farmer and a Sponsor, or a farmer, a Sponsor and any third party, before the production
or rearing of any farming produce of a predetermined quality, in which the Sponsor
agrees to purchase such farming produce from the farmer and to provide farm services.
What this implies is a pre-production contract between a farmer and any person, termed a ‘Sponsor’. When such a written agreement is inked, there are two types of contracts (in general) which may be signed:
The farmer has full ownership, control and liability with relation to his crops during production, but pays the Sponsor with the crops in return for money on the agreed terms.
The farmer and the Sponsor each partly own, control and are liable with relation to the crops during production, and the Sponsor must bear the risk and pay the farmer for their services, regardless of output.
These pre-production contractual obligations may have the capacity to bring about biodiverse destruction, mainly via the 2nd basis. With the coming of the Green Revolution to India, thousands of plant varieties were destroyed and oppressed by standardized crop varieties. At one point of time, India had more than 5 lakh varieties of paddy. Now, there are less than 6000. Urban consumers know only about five of them. Assuming that this Act is passed, allowing businesses a new, free rein to control production via contracts, the farmer will no longer be able to produce hyperlocal crop varieties – even now due to a lack of urban consumption, foodgrains like the Kuri millet and the fruits like the Raayan summer fruit are being wiped out. The devastation of these new laws cannot be comprehended as a measure of agricultural or economic benefit alone. The environment suffers under this modern contractual basis which has no governmental alternative. Imagine how much further biodiversity in Indian agriculture will be throttled when agribusinesses begin their rampage. While the death of an endemic species of plants may not sound like a great problem outside of tradition, history or a brief morality, it has widespread effects. With the lack of an endemic crop variety, their predators and pests attack new ones with greater vigour, increasing diseases and other harsh famine-causing epidemics (in crops). The food chain shifts and the food web gets even more tangled. As we try to industrialise nature, we seem to be putting ourselves on the highway to an apocalypse.
Chapter 2
Chapter 2 contains a major portion of the Act’s true intentions within it. It relates to the ‘farming agreement’ and the terms and conditions which make it. What scares farmers most here, is the lack of detail. There is a lack of specifics in the places they are needed the most.
Article 3
This article describes the period of farming agreements. In sharp contrast to the rest of the farm laws, this article seems fair. It explicates the terms which can be used in such an agreement. Interestingly, while most of the burden of the contract falls equally (as is supposed to be) – whether it is the supply of produce or the quality of supplied produce – farm service agreements (falling under the 2nd definition explained in Article 2(g)) are solely the liability of the farm service provider (a third party) or the Sponsor. This prevents any blame from being shifted to the farmers on this basis legally. However, practically speaking, they too will face the repercussions of the same. Thankfully, the rights of formal and informal sharecroppers (people who occupy and harvest a portion of a farmer’s owned lands through a contract of sorts) are protected under subdivision 2. It also states the timelines of these agreements (1 cropping season – 5 years or more if explicitly stated).
Chapter 3
Chapter 3 of the FAPAFSA discusses conflict resolution. It is vital to understand that the contract law surrounding this Act is not too out of the ordinary. However, its dispute resolution tactics have caused its disgrace. Apart from the idea of farming agreements itself, that is.
Article 13
Article 13 tasks the contractors with providing representation from each side on a ‘conciliatory board’. This is primarily a form of dispute renegotiation. In the case that they do come to some form of consensus, the new agreement is binding on the parties.
Article 14
Article 14 changes the mechanisms of contract law itself. Instead of allowing the matter to proceed within a court of law, farmers must bring themselves to a Sub-divisional authority, who will be a public servant. This is disquieting for many reasons. Firstly, why can’t the civil court take up this case, since it is already far more adept in such cases. Secondly, there is only one appeal which can be made against the judgement. An appeal to the Appellate authority presided by the collector. Once again, this sidelines the more adept judiciary. It also concentrates power with the executive, moving past the constitutional partition of powers between the judiciary, executive and legislative. Additionally, since private corporations are far better equipped to fight their case than farmers are, without the provision of any support, the farmers are bound to lose any contract disputes. This is majorly a bone of contention.
Chapter 4
Chapter 4 of FAPAFSA includes the miscellaneous provisions which are not included elsewhere. They only reiterate the main aim and objective of the entire Act.
ECA
The Essential Commodities (Amendment) Act, 2020 (henceforth called ECA) amends the 65 years old Essential Commodities Act. In essence, in the opinion of the author, this is one of the least controversial and truly progressive acts with clearer intentions than others. However, it has been woefully underthought (it was passed hastily through the parliament). It is a double-edged sword. Previously, the ECA allowed the government to regulate and control the pricing of what they termed ‘essential commodities’. It prohibited hoarding and other speculative activities. It also enabled the government to control the pricing of goods such as pulses and (recently) masks. However, now the ECA will only the government to control the pricing of commodities during extraordinary circumstances such as wars and famines, or when there is a (100% for agricultural produce; 50% for non-perishable agricultural foodstuff) raise in pricing. The author completely agrees with the government in spirit upon this idea – it will prevent market volatility which is natural when government interventionism is exceptionally gracious. However, this will prevent the government from controlling food prices underneath the limit. Why is this troublesome? Without help from the government, the poor man will suffer. The poor will not be able to survive even 25% spikes in food pricing: how will they survive up to 100%? For that reason, this act is not well-conceived.
Conclusion
The farm laws are a matter of great debate and contention. And rightly so. These laws have the capacity to change the very dynamic of agriculture. There remains no better person to understand these laws than the common farmer since they are the epicentre of these laws. Thus, it is only logical to listen to their opinion and understand. If they believe that these laws are hurtful to the farming community, is it just to defend the governmental stance anymore? We must raise our voices with theirs. We must stop these laws from arising in their tidal wave of capitalist devastation. If neither the government nor the farmers benefit, for whom are these laws? For numbers on pie charts in front of foreign investors and diplomats? The question in front of the government still remains. Do they want to change statistics or the lives of farmers for the better? Only time will tell.
‘People shouldn’t be afraid of their government. Governments should be afraid of their people.’
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