Whether 3 farm laws are really black in nature?
Introduction
Three Farm Laws (i.e., THE ESSENTIAL COMMODITIES (AMENDMENT) ACT, 2020, 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) have faced a lot of criticism in India. Majority of opposition parties are protesting against these three laws and so are the farmers from India.
To know about the details of whether these laws are white or black we have to understand old system of sale of Farm produces and disadvantages faced by farmers in old system.
In older system, Farmers were bound to take their farm produce to mandis, where government procure their produce by means of mandi committees. Tax was further imposed on the farm produce and state government's make their revenue out of that tax.
We have to look at all aspects of old system and new system in detail in order to answer this question "Whether these 3 farm laws are really black in nature?"
Problems faced by farmers in old system:
In old system, following problems are faced by farmers:
1. Mandi acts as an agent who has exclusive right to buy the farm produce from the farmer which resulted in exclusive monopoly of mandi. Let's take an example to understand it better:
A is a purchaser at Mandi and B, C, D are sellers of the crop(i.e., farmers). Now, A knows B, C and D are bound to sell the crop to him. So, he buys the crop at his price not at the price B,C and D wants.
2. Farmers have to take their crop to mandi to sale it.
3. Crops like onion which come under the category of Essential Commodities can't be stocked or stored by farmers beyond a particular limit as it was held to be illegal. Let's understand this with the help of example: Farmers A, B and C went to mandi for selling their onion produce and their due to monopoly of mandi agents they were bound to sell it for 3-4/kg. But we know that once the season is off, onions are sold at 100 per kg. Let's look at condition of this farmer who sold a produce at 3/kg and customer gets the same at 100/kg. This is a true example of how farmers were deprived of their rights to sell with freedom.
4. There was no guaranteed sale at MSP for their produce.
5. A small farmer who has just 2-3 acres of land has only 2 options to sell his produce:
a) He was bound to travel large distance to mandi for very less produce.
b) He sells his produce to rich zamindar of his village which pays him very less for his produce.
6. Also, in cases of contract farming, rights of farmers were deprived by big MNCs and in many cases their lands were even ceased in compensation.
7. In cases of conflicts parties were to move to number of courts and years and years of their life were ended in legal disputes which is also a humiliation faced by farmers.
8. Farmers were also bound to sell their produce in their own area mandis, due to which they were not able to move inter-state or intra-state to sell their produce. Let's understand this issue with an example:
A is a resident of Punjab and his city shares a common border with Rajasthan. He knows Rajasthan lacks agriculture produce and mainly depends upon other states for farm products. So, he wants to sell his farm produce at higher price in Rajasthan, instead of selling it in his own mandi. He cannot do this in earlier system of agriculture.
Most of these problems were sought by Farm Laws, we will look at all one by one. But before that we would also look at issues raised by various opposition parties and farm unions in respect to farm Laws.
Issues/Concerns raised by Farm Unions and Opposition parties on Farm Laws:
1) Mandis will be scrapped by these farm laws.
2) Removing farm produce items from EC list will allow MNCs to control the entire food produce market.
3) MNCs will capture their land in case of contract farming.
4) The Act proposes legal disputes are to be referred to
offices of the sub-divisional magistrate and district collector. Farmers
alleged that these courts aren’t independent courts and cannot deliver us
justice, leave alone guarantee timely payment.
5) MSP is not guaranteed in these farm laws.
Answer to above issues:
1. Whether Mandis will be scrapped by these laws? If not, then why farmers are alleging this?
Answer to this is clear "NO", None of these three farm laws have any provision of scrapping mandis.
Then why farmers are saying this that this law will end APMCs?
Firstly, we have to look at reason alleged by farm unions:
These 3 farm laws allow farmers to sell their produce anywhere they want and due to which farmers, who were bound to sell their produce in mandis will sell to other places and due to which no one will go to mandi after 2-3 years and hence, mandis will be closed. Also, farm laws encourage sale outside mandis as there is no tax on sale outside mandi? Is that true?
Answer to second question is also "NO".
1. Farmer needs to sell his produce at a better price, no matter where he gets it. Farm Laws allow farmers to sell their produce outside mandi which doesn't mean that they can't sell in mandi. If for example, farmer doesn't get a better price outside, he is independent to sell the same to mandi.
2. There is a provision in THE FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION
AND FACILITATION) ACT, 2020 that:
AND FACILITATION) ACT, 2020 that:
"4. (1) Any trader may engage in the inter-State trade or intra-State trade of scheduled
farmers’ produce with a farmer or another trader in a trade area:
Provided that no trader, except the farmer producer organisations or agricultural
co-operative society, shall trade in any scheduled farmers’ produce unless such a trader has
a permanent account number allotted under the Income-tax Act, 1961 or such other document
as may be notified by the Central Government."
"6. No market fee or cess or levy, by whatever name called, under any State APMC Act
or any other State law, shall be levied on any farmer or trader or electronic trading and
transaction platform for trade and commerce in scheduled farmers’ produce in a trade area."
Section 6 of this act is the main reason for this allegation of the farmers that APMC mandis will be discouraged by this act which says No market fees or cess to be charged as mentioned in APMC Act. But that is not true in any aspect. Farmers need to read the Section 6 with Section 4 (1) of Act which says there must be either a PAN number or trader must be registered with any farmer produce organization or agricultural cooperative society. This provision clearly shows that trader or buyer has to pay tax on his income at the end of the day. That means this allegation is baseless.
Hence, These three farm laws don't scrap mandi system.
2. Whether removing farm produce items will result in conquer of the market by MNCs? Will this lead to uncontrollable prices of farm produces?
Answer to this is also "NO" as this step will help farmers to get a better price of the crop. Let's see how,
In early system farmers were bound to sale their entire produce as they can't stock their produce due to which farmers get a very low price. Say there are 1000 onion sellers at on place who all have taken their produce to mandi for selling, Now they are bound to sell at low price or the price decided by mandi as they can't stock it back. This would result in a very low price of the produce of farmer. After a month mandi would sell the same at double or triple the price to consumers.
However, if farmers can stock their produce, they can wait till they get the right price before selling their produce.
Answer to second question is also on negative as EC Act Section 2 says:
"2. In section 3 of the Essential Commodities Act, 1955, after sub-section (1), the following
sub-section shall be inserted, namely:—
‘(1A) Notwithstanding anything contained in sub-section (1),—
(a) the supply of such foodstuffs, including cereals, pulses, potato,
onions, edible oilseeds and oils, as the Central Government may, by notification
in the Official Gazette, specify, may be regulated only under extraordinary
circumstances which may include war, famine, extraordinary price rise and natural
calamity of grave nature;"
This section of Farm Law clearly states that in circumstances of extraordinary price rise, central government can apply a bar over the produce to regulate its price in market.
3. Whether MNCs will capture lands of farmers in cases of contract farming?
Answer to this also is negative, For that let's look at provisions of THE FARMERS (EMPOWERMENT AND PROTECTION) AGREEMENT ON PRICE ASSURANCE AND FARM SERVICES ACT, 2020
Section 2 of the act says:
"2. No farming agreement shall be entered into by a farmer under this section in derogation of any rights of a share cropper.
Explanation.—For the purposes of this sub-section, the term "share cropper" means a
tiller or occupier of a farm land who formally or informally agrees to give fixed share of
crop or to pay fixed amount to the land owner for growing or rearing of farming produce."
Section 8 of this act says:
"No farming agreement shall be entered into for the purpose of—
(a) any transfer, including sale, lease and mortgage of the land or premises of
the farmer; or
(b) raising any permanent structure or making any modification on the land or
premises of the farmer, unless the Sponsor agrees to remove such structure or to restore
the land to its original condition, at his cost, on the conclusion of the agreement or
expiry of the agreement period, as the case may be:
Provided that where such structure is not removed as agreed by the Sponsor, the
ownership of such structure shall vest with the farmer after conclusion of the agreement
or expiry of the agreement period, as the case may be."
Section 15 of this act says:
"Notwithstanding anything contained in section 14, no action for recovery of any
amount due in pursuance of an order passed under that section, shall be initiated against the
agricultural land of the farmer"
These 3 provisions clearly safeguard the lands of farmers on no condition any company can acquire the lands of farmers
4. Whether these farm laws prevent farmers to go to independent courts for dispute resolution?
Yes, we can say that these laws prevent farmers to go to civil courts for dispute resolution as there is a provision in Section 15 of THE FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION
AND FACILITATION) ACT, 2020 :
"15. No civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter, the cognizance of which can be taken and disposed of by any authority empowered by or under this Act or the rules made thereunder."
However, this is not completely true, there is a proper fast track dispute resolution system established in this act which secures the rights of farmers and will also provide them early access to justice. Let's check the provisions regarding this:
Chapter III Dispute resolution provides detail system of dispute resolution:
"8. (1) In case of any dispute arising out of a transaction between the farmer and a trader
under section 4, the parties may seek a mutually acceptable solution through conciliation by
filing an application to the Sub-Divisional Magistrate who shall refer such dispute to a
Conciliation Board to be appointed by him for facilitating the binding settlement of the
dispute.
(2) Every Board of Conciliation appointed by the Sub-Divisional Magistrate under
sub-section (1), shall consist of a chairperson and such members not less than two and not
more than four, as the Sub-Divisional Magistrate may deem fit.
(3) The chairperson shall be an officer serving under the supervision and control of
the Sub-Divisional Magistrate and the other members shall be persons appointed in equal
numbers to represent the parties to the dispute and any person appointed to represent a
party shall be appointed on the recommendation of that party:
Provided that, if any party fails to make such recommendation within seven days, the
Sub-Divisional Magistrate shall appoint such persons as he thinks fit to represent that party.
(4) Where, in respect of any dispute, a settlement is arrived at during the course of
conciliation proceedings, a memorandum of settlement shall be drawn accordingly and signed
by the parties to such dispute which shall be binding upon the parties.
(5) If the parties to the transaction under sub-section (1) are unable to resolve the
dispute within thirty days in the manner set out under this section, they may approach the
Sub-Divisional Magistrate concerned who shall be the “Sub-Divisional Authority” for
settlement of such dispute.
(6) The Sub-Divisional Authority on its own motion or on a petition or on the reference
from any Government agency take cognizance of any contravention of the provisions of
section 4 or rules made thereunder and take action under sub-section (7).
(7) The Sub-Divisional Authority shall decide the dispute or contravention under this
section in a summary manner within thirty days from the date of its filing and after giving the
parties an opportunity of being heard, he may––
(a) pass an order for the recovery of the amount under dispute; or
(b) impose a penalty as stipulated in sub-section (1) of section 11; or
(c) pass an order for restraining the trader in dispute from undertaking any trade
and commerce of scheduled farmers’ produce, directly or indirectly under this Act for
such period as it may deem fit.
(8) Any party aggrieved by the order of the Sub-Divisional Authority may prefer an
appeal before the Appellate Authority (Collector or Additional Collector nominated by the
Collector) within thirty days of such order who shall dispose of the appeal within thirty days
from the date of filing of such appeal."
These provisions describe a fastrack timebound and solution-oriented approach to farmers for their dispute resolution which will save the time of farmers in legal disputes and give them an early access to justice. Moreover, if the farmers are still disagreed over the decision, they may by virtue of Article 226 of constitution and Article 136 of Constitution can appeal in both High Court and Supreme Court for justice.
Hence, this would be wrong to say that this system prevents farmers to go to courts for justice, we have to consider advantages of this system as compared to civil court way:
1. It is time bound (30 days) justice method
2. It is a dedicated specially for farmer problems whereas civil courts take years and years for justice as there are large number of other disputes also pending before civil courts.
3. At the end, our constitution also provides us access to justice under Article 226 and 136 of constitution.
5. Whether MSP not guaranteed in these Farm Laws?
Yes, this is on issue which farmers are right in some sense. These Farm Laws have nothing to do with MSP. In India, till date there is no statute on MSP till date. Though governments from time to time have taken steps to provide MSPs to farmers, but there is no legal framework on this.
So, what is required is farmers need to fight/protest against government to bring a law for MSP not the repeal of Farm Laws. These farm laws will serve as a blessing to farmers and has no provision which would harm their interest.
6. Whether center has power to make laws on state subject i.e. Agriculture?
Yes, under Article 249 of Constitution, Parliament of India has power to legislate on any subject of state list which says:
"249. Power of Parliament to legislate with respect to a matter in the State List in the national
interest.—(1) Notwithstanding anything in the foregoing provisions of this Chapter, if the Council of States
has declared by resolution supported by not less than two-thirds of the members present and voting that it is necessary or expedient in the national interest that Parliament should make laws with respect to1
[goods
and services tax provided under article 246A or] any matter enumerated in the State List specified in the
resolution, it shall be lawful for Parliament to make laws for the whole or any part of the territory of India
with respect to that matter while the resolution remains in force.
(2) A resolution passed under clause (1) shall remain in force for such period not exceeding one year as
may be specified therein:
Provided that, if and so often as a resolution approving the continuance in force of any such resolution is
passed in the manner provided in clause (1), such resolution shall continue in force for a further period of
one year from the date on which under this clause it would otherwise have ceased to be in force.
(3) A law made by Parliament which Parliament would not but for the passing of a resolution under clause
(1) have been competent to make shall, to the extent of the incompetency, cease to have effect on the expiration
of a period of six months after the resolution has ceased to be in force, except as respects things done or
omitted to be done before the expiration of the said period."
However, Article 249 would not be appropriate to apply in this case, Now let's see some other provisions in Union and Concurrent list under which these legislations can be established by parliament of india under Article 246 (1 and 2) of Indian Constitution:
"246. Subject-matter of laws made by Parliament and by the Legislatures of States.—
(1)
Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect
to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the
―Union List‖).
(2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the Legislature of any
State 1
*** also, have power to make laws with respect to any of the matters enumerated in List III in the
Seventh Schedule (in this Constitution referred to as the ―Concurrent List‖).
As these farm laws relate to the interstate trade and commerce, these law come under entity 42 of Union list in schedule 7 of Constitution.
Moreover, we should also look at entity 33 of concurrent list which states:
"[33. Trade and commerce in, and the production, supply and distribution of,—
(a) the products of any industry where the control of such industry by the Union is declared by
Parliament by law to be expedient in the public interest, and imported goods of the same kind as such
products;
(b) foodstuffs, including edible oilseeds and oils;
(c) cattle fodder, including oilcakes and other concentrates;
(d) raw cotton, whether ginned or unginned, and cotton seed; and
(e) raw jute.]"
So, this clearly shows that union has full power to legislate on any law related to trade and commerce.
we also need to check the entities of state list and extent of power of state to legislate on agriculture subject:
Important Entities related to agriculture in state list are:
Entity 14: Agriculture, including agricultural education and research, protection against pests and prevention
of plant diseases.
Entity 26: Trade and commerce within the State subject to the provisions of entry 33 of List III.
Entity 27: Production, supply and distribution of goods subject to the provisions of entry 33 of List III.
Entity 45: Land revenue, including the assessment and collection of revenue, the maintenance of land
records, survey for revenue purposes and records of rights, and alienation of revenues.
Entity 46. Taxes on agricultural income.
Entity 47. Duties in respect of succession to agricultural land.
Entity 48. Estate duty in respect of agricultural land.
If we look at these entities of state list the 3 farm laws come under entity 26 and entity 27 of state list. But, if we read these two entities carefully, they state that as per provisions of entry 33 of concurrent list(List III).
These established facts clearly prove that union has made all these three farm laws within its powers and has nowhere interfered with powers of state.
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Innocent Farmers are misled about the three laws, However, if they would have protested over law for MSP, that would be an additional advantage to farmers.
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It is clear from above discussion that Farm Laws are not black as alleged by left and Farm union. Instead, these will help farmers to get a better price for their produce. If farmers want to protest, they should protest for a law on MSP not for repeal of these farm laws.
Suggestions and queries are welcomed. Please put your views in comment section.
-Article by Tushar Bawa
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