Farm Acts: From Myth to Reality

Parliament enacted 3 Acts related to sale and production of farming produce in September, 2020. After which farmers from Punjab and Haryana started protesting against acts and called such acts as “Black Law”. They were later joined by farmers from all around the nation. According to them, these laws make them more prone to getting exploited.

According to Central Government, these laws empower, protect and help farmers to explore more opportunity to flourish. They say that The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 (FPTCA, 2020) liberates farmers by giving them the freedom to sell anywhere and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 (FAPAFS, 2020) provides for contract farming, under which farmers will produce crops as per contracts with corporate investors for a mutually agreed remuneration. The Central Government also legislated amendment act i.e., the Essential Commodities (Amendment) Act, 2020 (EC) which adds sub-section (1A) under section 3 of the the Essential Commodities Act, 1955 and thereby abolish stock limit of foodstuffs, including cereals, pulses, potato, onions, edible oilseeds and oils.

Many issues are being raised regarding Farms Bill. After lot of research, I have sorted few issues which are in the limelight and they are being reported by newspaper as well as news channels very frequently. Those are:

Ø  Threat to Farmer’s Agriculture land

Ø  Danger from Contract farming

Ø  Removal of MSP (Minimum Support Price)

Ø  Constitutionality of Acts passed

Ø  No Judicial Intervention

Ø  Removal of APMC (Agricultural Produce Market Committee) Yard

Through this article I have tried to show that whether these issues are genuine one or they are just there for political gain. Let start addressing issue one by one.

o   Threat to farmers’ agriculture land – There is a fear among farmers that corporate investors will take their land. They are saying that corporate investors will enter with them into a contract which will be having many terms and conditions. Among these T & C, there might be a clause of which non-compliance might result in farmer losing his land. As, many farmers are illiterate and poor so they will not be able to understand such terms and conditions and also, they do not have money to hire good lawyer in this regard.

 

Section 8 of FAPAFS, 2020 clearly states that in framing agreement there shall be no such clause which have the condition of “any transfer, including sale, lease and mortgage of the land or premises of the farmer”. Further, section 8 subclause (b) states “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”

 

Moreover, Section 15 of the FAPAFS, 2020, it has been stated that if there is default from the side of farmer then no order can be passed Sub Divisional Authority and Appellate Authority to take land of the farmer.

 

o   Danger from Contract Agreement - Contract Farming means farmers and sponsor (buyer of farmer produce) enter into agreement prior to 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. Also, term ‘Contract Agreement’ is defined u/s Sec 2 (g) FAPAFS, 2020. As, price of the farming produce is predetermined in the contract. Farmers have fear that if afterward price of farming produce increases, then farmer will have to bear lose.

 

In sec 5 subclause (b) of FAPAFS, 2020, it is stated that farmer may fix a price in a contract and attach it to a condition that if price of the farming produce increases later, then increased price shall be considered. The method of determining such additional amount shall be annexed to the farming agreement.

 

o   Removal of MSP (Minimum Support Price) – Let us first understand what is MSP? MSP is minimum value of farming produce decided by government agency named Commission for Agricultural Costs and Prices (CACP). Farmers have to sell their farming produce at the value of MSP or above MSP. If farmers are not able to sell others their farming produce at the value of MSP, then government buys from them.

 

The Centre currently fixes MSPs for 23 farm commodities — 7 cereals (paddy, wheat, maize, bajra, jowar, ragi and barley), 5 pulses (chana, arhar/tur, urad, moong and masur), 7 oilseeds (rapeseed-mustard, groundnut, soyabean, sunflower, sesamum, safflower and Niger seed) and 4 commercial crops (cotton, sugarcane, copra and raw jute).

 

People are afraid that through these acts’ government will remove MSP. But in these three acts MSP is mentioned no-where. All three acts are completely silent on this matter.

 

Earlier to these acts, there was no act which had provision related to MSP. Government through notification in official gazette declare MSP.

 

o   Constitutionality of Acts Passed – Many opposition parties as well as few lawyers are saying that these acts are unconstitutional. Some are saying that acts impinge to Federalism. Some other people are saying that procedure which is required to be followed to enact any law, was not followed.

 

Supreme Court in few cases had held that constitutionality of any act can be questioned on two bases:

 

(1)   If its content is inconsistent with provisions of constitution.

(2)   If procedure to pass law is not complied.

 

Issue is being raised entry 14, 26, 27 and 28 of State list under Schedule 7 of Constitution of India, 1949 clearly provides for agriculture and its trade and commerce to be exclusively subject matter of the state. So, Central government has no power to legislate on these subject-matter.

 

If we see entry 33 of Concurrent list under Schedule 7 of Constitution of India, 1949 which also contains trade and commerce in, and production, supply and distribution of food stuff. As per art 246 of the Constitution of India, 1949, State as well as Centre can legislate on the subjects of concurrent list. And Article 254 (1) states that in case of repugnancy between state law and centre law, then centre law shall be enforced and repugnant part of the state law will be void.

In case of Hoechst Pharmaceutical Ltd. v. State of Bihar (1983), Supreme court held that ‘If such overlapping exists in any particular case, the state law will be ultra vires because of the non obstante clause in Art 246 (1) read with the opening words ‘subject to’ in Art. 246(3).’

 

o   No Judicial Intervention – Issue is being raised that civil court have been barred to take cognisance of the dispute if it arises. Section 15 of the FPTCA, 2020 states “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.” Section 19 of the FAPAFS, 2020 states “No civil Court shall have jurisdiction to entertain any suit or proceedings in respect of any dispute which a Sub-Divisional Authority or the Appellate Authority is empowered by or under this Act to decide and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any rules made thereunder.”

 

In case of any dispute, ‘Conciliation Board’ will try to resolve dispute within 30 days. If no settlement is made between parties to the dispute then Sub-Divisional Magistrate (SDM) will pass order within 30 days from the date of application filed. If any party to the dispute aggrieved by the order of SDM, then they can prefer appeal to Add. Collector or Collector. Moreover,  Sec 18 of FPTCA, 2020 and Sec 13 of the FAPAFS, 2020 provide protection from any suit, prosecution or other legal proceeding against the Central Government, the State Government, the Registration Authority, the Sub-Divisional Authority, the Appellate Authority or any other person for anything which is in good faith done or intended to be done under the provisions of this Act or any rule made thereunder.

 

o   Removal of APMC (Agricultural Produce Market Committee) Yard – There is no provision in any of the three acts which provide to remove APMC. Sec 3 of the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 states remove the trade and commerce barrier which was put by the state APMC earlier. According to earlier state APMC act, farmer have to sell their farming produce to the APMC first and also to sell it within state APMC. Now, there is no such restriction. Farmers can sell their farming produce anywhere in the country. Moreover, they sell it using internet in the e-market.

 

Author Views

Idea seems to be great. The country is in need of such reforms. Removal of restrictions which are imposed by the state APMC act is great, as it gives opportunity to the private players to enter and increases competition in the market. As result farmers get chance to explore new opportunities. However, there are some serious issues which needs to be address by the government which are as follows:

• Government should remove bar imposed on civil court as well as add provisions for speedy trial and also waive off court fees for farmers.

•  As MSP is prevailing from the long time, so government should add provision in the act assuring MSP. Also, increase the scope of the MSP which is currently only limited to 35 crops (aforementioned). MSP should be decided for ‘farmers’ produce’, as per defined under 2(h) and 2(c) of FAPAFS, 2020 and FPTCA, 2020 respectively.

• Procedure for registration of the sponsor should be more-strict. According to Sec 5 of the FAPAFS, 2020, PAN card along with few other documents are required to get register for trading and commerce. Because there had been many cases reported where people were caught carrying fake PAN cards.

• Government should appoint few lawyers who will make contract for the farmers. As, there are many poor farmers who cannot afford to hire good lawyers. Contract between farmers and buyer should also be register by Collector.

• Government should also open an account in which money, fixed in the contract, is to be deposited by the buyers of the farmers’ produce at time of signing of the contract. Such money will be given to farmer after buyer gives his confirmation of acceptance of farmers’ produce.

 

Author – Satwik Sharma