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Indian Farm Laws: Analysis of the current scenario

Abstract

India over the past few months has seen several protests that are organised in the borders surrounding Delhi. Several farmer unions have demanded for the repealing of the laws put forth by the central government. This has caused a nationwide trend of several citizens requesting the government to hear their queries and recall such bills. The farmers have received support from several parties from the opposition. Several international organisations have come in support of the farmers including several human rights advocates questing the method of how the police force has treated the farmers leading the protest peacefully. The main question remains as to whether the MSP system will be followed and there are several reports which states that the queries of the farmers will be answered if the government makes the MSP system mandatory. However, the government has not been willing to add in such text to the laws and continue to struggle in coming to a consensus with the farmers and the several unions protesting at the border. Every time the government had a meeting with the farmers, the laws have been rejected by them and are not willing to listen to any of the proposed amendments. It is quite understandable as the government are unwilling to listen to main query regarding the MSP. However, to understand such issues, we must first look into the main context of the 3 laws and the proposed change to the current structure.

Introduction

During the month of September 2020, the Indian government had drafted 3 legislations/acts involving the agriculture sector. These laws are allegedly introduced to reform the entire sector and to merge the corporate sector with it. The intent of such laws was to remove the middlemen and connect the small scale farmers with the respective corporates. However, these laws have been rejected by several people including several farmers and are currently protesting to ensure that these laws are repealed. The farmers from several states have conducted several protests in New Delhi and the borders. The main task of this government is to ensure that the agricultural committee can come to a consensus with the protestors regarding the laws and bring in reforms. To understand what aspects are being debated on, we must understand the legislations put forth by the government. The 3 laws are:

  • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
  • The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020
  • The Essential Commodities (ECA) (Amendment) Bill, 2020

The government alleges that these laws were drafted with the objective of completing the reformation of the agricultural sector which has been put on a halt for several years. The laws that have existed earlier had caused issues regarding the structure of the market and these laws are drafted to correct them.

The laws earlier had controlled involvement from the private sector extensively. The essential commodities act had disallowed purchasing of certain commodities in bulk. The ECA is also responsible for setting limits regarding stockpiling. This method has the capability to affect the industry. Why? this had led to decrease in the amount being spent for the infrastructure involving storage. The storage facilities are not up to the standards required due to the poor investment made and as to the lack of such investments, there is a large portion of food being wasted. The laws were also responsible for affecting the exports to several countries as the restrictions were extensive. The laws have prevented certain commodities being sent to other countries by banning the export of them. The sector had become overly confined due to the several restrictions. The laws had only allowed the farmers to sell their products in the APMCs (Agricultural Produce Market Committees). However, the people who these farmers sell to must be a trader who is registered. However, the farmers are worried as they fear that the sector will completely be monopolised by corporates and there is no wording in the new laws that ensures that the corporates will follow the Minimum Support Price. There is a chance for the companies to offer a price higher than the government and can set them aside in the market. Once the corporates monopolise the market, they have full control of the price and can offer prices that are lower than the MSP. There is no guarantee in the law that ensures the price which the corporates can exploit.

Pros and Cons of the laws

To completely understand the merits of such laws, we must take the pros and cons into importance. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill had provided a section which aids the farmers as they can file a case before the subdivisional magistrate to resolve certain disputes. If there are appeals to be filed, they can approach the respective collector or additional collector. Any dispute that is to be resolved between such farmers and traders is taken care completely by the judiciary and there is no place for the executive to be involved. As stated earlier, the MSP problem remains. The MSP is a price that is paid minimum to protect the interests of the farmers. The new laws do not include a section that removes the MSP but no section that enforces which explains the argument put forth. If the corporate sector enters into the bigger picture, only the rich and modern farmers can keep up with the modernity. Others will not take advantage of the conditions and will remain following the old system. However, there are arguments put forth by certain government officials criticizing the MSP system due to the over purchasing of the products put forth in the APMCs. The products that are bought are more compared to the amount being consumed which is wasted. India’s agricultural scenario is not very encouraging with about 55 percent of the total workforce engaged in agriculture and allied sectors while the contribution to the country’s gross value added (GVA) is merely 16 percent. The Indian farmers’ average land-holding size is less than 2 acres and contract farming can increase land holding and ensure some part of the currently engaged workforce migrates to other sectors of the economy.

The laws allegedly have the objective to remove such hinderances in the sector, but the bill has been met with an uproar of protests in New Delhi and its borders. The government has tried to persuade them into accepting such laws, but the farmers have rejected the reforms and will continue to do so until the government can properly listen to their queries and address them in a fair manner.

Queries Involving the three laws

To understand the merits of these bills, we must the take the arguments for and against it into importance. We first discuss the ECA 2020. The act has several objectives which will be named one by one including the criticism put forth. The act aims to discard several commodities which were included in the essential commodities list. Why? The restrictions regarding stockholding can be set aside. It also aims to bring in the corporate sector into the industry and increase the FDI coming in from several countries. This will prevent the government from interfering excessively which will attract several private investors. As stated earlier, India lacks investment in infrastructure involving the storage system and this act will aim to increase it. When investment increases, there will be a decrease in the wastage of products put forth in the agricultural sector. However, the arguments against it are as follows. Once the corporates get hold of the market, they can name the price of several commodities which gives them the power to price them lesser. The “extraordinary circumstances” clause has a high price limit which will mostly not be used. The Farmer (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 aims to establish a contractual relationship between farmers and several wholesalers/retailers in order to sell their products are a price that has been discussed earlier. The farmers can get hold of advanced machines and keep up with the technological modernity. The marginal and small farmers, with land less than five hectares, can gain via aggregation and contract (Marginal and small farmers account for 86% of total farmers in India). The bill also aims to reduce cost of marketing and boost farmer’s income. When disputes arise, the bill helps in the process of speeding of addressing such issues due to the timelines included. As discussed earlier, the bill helps establishing a contractual relationship but the farmers can be easily exploited due to the lack of negotiation skills. The corporates will always have the upper hand and have access to better facilities when involved in disputes. The farmers will need a lot of help to be set on an equal footing with the corporate sector. The farmer’s Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 aims to expand the selling sphere of the farmers as earlier, the farmers buy and sell their produce in the mandis that are registered. They will be registered in the APMCs. One of the objectives is to ensure modern tech is brought into the field so that the farmers can participate in electronic trading. The payment made by them to promote and transport can be decreased and ensures they are offered a good price in entirety. However, if the usage of mandis is low, then the payment coming from it will also be low which will lead to the respective states losing revenue. As much as electronic trading can benefit the farmers, the National Agricultural Markets still use follow the mandi system. This can lead to the e NAM being abolished. The main objective of these reforms is to remove the middle men but there are several agents who make a living of commissions. The question remains as to what will they do after the system prescribed in the laws are implemented.

What is MSP?

The MSP is a short form for Minimum Support Price. It is the amount that is set as a minimum bar for the produce. It ensures the farmers are not selling their produce at such low prices during rough circumstances. The price can apply for certain crops too. The amount offered cannot be lower than the MSP and it cannot be changed during any circumstance. The main reason as to why the MSP is set is to ensure the farmers are protected during the season where the crops are being sold at a lower price due to situations such as deflation. There is 20+ crops that are within the MSP ambit and the government can set the price for any of them belonging in the list. Now the question arises, which organisation can set the MSP? The Union Government has the power to set the price and is the only body that has such power. However, the price is not set only by themselves. The government must take the opinions of the CACP (Commission for Agricultural Costs and Prices) into importance. The Swaminathan Committee sets the way in which the price should be set and CACP determines the price. However, such an important aspect in the agricultural sector, the setting of such a price is not legally binding. It is not included in any law. It is only considered as a practice which involves the government buying crops from such farmers with a price that is set two times over a year. However, several organisations have requested the government to draft laws which makes MSP mandatory, but the government is yet to act on such requests. The problem of private sector entering the field is that there is no law that ensures MSP for the farmers which allows them to exploit such farmers as any price can be set by them as the private sector can completely monopolise the agricultural sector. The new laws allow the farmers to trade their produce with the private sector and need not sell only within the APMC registered mandis. The buyer who offers the highest price will be provided with the produce. The farmers can now enter into a contractual relationship with the people offering a price and the contract can include a pre agreed price for the produce. However, as much as the laws seems to be promising, the MSP is not mentioned in any of the 3 bills. The private sector exploitation as mentioned above is predicted by the protestors. The government has guaranteed that the price will be set for the farmers but there is no legal obligation. The bills have not explained or made any connection towards the MSP. They have completely different objectives. This is one of the reasons as to why the farmers are protesting against such laws. There is no guarantee. The farmers want a promise that is written by the government regarding the maintenance of the MSP. This is demanded as the farmers can hold the government accountable if the private sector is not paying the MSP. The farmers are worried about the predicted exploitation and demands that the government must step in and hold themselves accountable. Another issue that is to be addressed is the protection of land that is held by the farmers. The farmers predict that the private sector has the power to exploit them and acquire such lands as there is no price or minimum amount required to be paid. It is completely open for the corporates to participate with minimal government intervention. The produce sold in the mandi will come with the MSP attached but there is no guarantee once this structure is abolished. The experts are of the opinion that the farmers require the safety standards provided by the government for them to completely accept the amendments. There is certain safety attached with existing laws but there is only a certain portion of farmers that are successful with their sales. This is according to the 2015 Shanta Kumar Committee report. Critics of the farm bills say the existing mandi structure is already leading to exploitation of farmers by middlemen but introducing them to bigger middlemen could harm them even more.

The Debate on the Constitutionality of the farm laws

As we all know, India has adopted the federal structure where the powers between the Centre and the states are distributed. The powers regarding legislation are in the seventh schedule of the constitution. The 3 lists are Union list, State list and concurrent list. The state list includes irrigation, livestock, market and fairs which allows the state to make laws regarding them. The state also has to the power to draft laws involving trade and commerce, but it is also included in the concurrent list. The concurrent list allows the Centre and state to make laws, but the Centre prevails in matters of disputes. How did the Centre make the farm laws? Under what entry? The government had drafted under them under entry 33 of the concurrent list. Entry 33 states, 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 oil seeds and oils.

(c) cattle fodder, including oilcakes and other concentrates

(d) raw cotton whether ginned or unginned, and cotton seeds; and

(e) raw jute.”

Recently, in entry 24, the subject of Industries has been added in the state list but the parliament has the power to bring in any type of industry under their law making control if they feel it is a matter of public interest and war which is given under entry 7 and 52 of the Union list. When discussing about these entries, it is important for us to look into the third amendment. Yes, the amendment permits the Union government to deal with industries during times discussed earlier but the amendment does not include the entry “Agriculture and Markets” to be put under control of the Union under any circumstances. The entire scope of entry 33 had been expanded. It was initially included in the provincial list of Government of India Act 1935. Due to the emergency being imposed earlier, the Union Government had absorbed the power to make laws in the entries included in the provincial list. After the emergency, the Union Government still had the power to make laws under these issues as after the second world war, the state governments individually were lacking in resources. Due to such circumstances, the Central Government and Legislature Act, 1946 had made sure the Union Government had retained the power to make laws on the entries included in the state list. This had been enacted by the British parliament. However, the time limit for these laws had only been for one year but the restriction was not too extensive. The limit had been extended constantly for a few years. In 1950, the constitution of India had permitted the Union Government to make laws under the state list. However, the time limit was 5 years. The Essential Supplies (Temporary) Powers Act 1946 had the same time limit but due to the rough circumstances, the scope of entry 33 had expanded by bringing more entries to it and the earlier law, ECA (Essential Commodities Act) 1955 had been introduced. The exact wording of the Statement of Objects and Reasons appended to the Bill (3rd amendment) is given below:

” Entry 33 of the Concurrent List enabled Parliament to legislate in respect of industries declared to be under Union control. In addition, Parliament was empowered by article 369, for a period of five years, to legislate in respect of certain specified essential commodities. It was not considered advisable that after article 369 lapsed to control the production, supply and distribution of some of these essential commodities. The bill seeks to amplify Entry 33 of the Concurrent List accordingly.”

The entry no. 33 allowed and empowered the Union to deal with issues such as involving black markets and inflation leading to very high prices. However, the suggestion that can be given is that a whole separate entry should have been inserted in the concurrent list. Why? The non inclusion of such entry in the concurrent list has allowed the Union Government to make laws on food items during circumstances explained above. This has given full power to the Union legislature and diluted the power of the states during tough circumstances.

The Union has interpreted it in such a way that entry 33 is entirely under the control of the Centre and has the intention to set aside the sub entries and its main object. Now you must question how the Union is setting aside the sub entries and ignoring the powers of the state. As stated earlier, the parliament has enacted the Farmer’s Produce Trade and Commerce (Promotion & Facilitation) Bil which ensures the Union government spreads its domain all over the sales and purchases of the produce given by small scale farmers within the state. In simpler words, the domain allocated to the state governments is slowly turning into a space controlled only by the Union.

This had led to the reduction of the revenue that the states will gain from the mandis run by the governments. This is explained in section 6 of the bill as it has been clearly stated that the state government cannot charge any cess during the sale and purchase of the agricultural produce. This is one of the examples as to how the Union has stepped over the line and are diluting the powers of the states. It has been clearly given in entry 33 that the Union can deal with trading of food items, but nowhere does it allow the Union to remove the states control from it. They do not have the power to prohibit the state from charging any mandi cess. The Union Government does not have the power to legislature on such fee matters and the state is allowed to charge.

Another point that is to be included is that the word “trade area” in the bill is not recognised in any of the entries in the Union or concurrent list. The state government has the power to make laws on Markets and fairs which is given under entry 28 of the State list. The Centre does not have the powers to manipulate the terms and fit in similar meanings. The Union government cannot cross the line by twisting the terms given in the 3 lists to their favour which could create a loophole for them to legislate on such matters.

India will and forever remain a federal country. The powers are not concentrated with the Centre and is distributed among states. These laws do not appreciate the federal structure and empowers the Union to legislate in matters involving the states. The constitutionality of these bills can be challenged before the Supreme court via judicial review. The Supreme court upon seeing such national unrest will pass a judgment on whether the Union Government has powers to legislate on such matters by taking entry 33 into importance.

Global opinion on the laws and support from celebrities

The protesting farmers have received praise and support from celebrities and organisations around the world. The government had fit several barricades in the borders and had arrested several people without proper reasoning. The International Commission of Jurists had demanded the government to remove the barricades and release the protestors as it had been a gross violation of human rights. The police force had attempted to shut down the entire republic day tractor protest using violent methods and had completely disregarded their right to protest in a peaceful manner. How did the police/government act in such a violent manner? Several barricades with barbed wires on them had been placed and nails had been bolted into roads. This was done to ensure no vehicle can enter Delhi. The barricades have proven to be an absolute menace as it had prevented several farmers access to water and sanitation facilities. The only question that remains is why the government would implement such harsh methods for the people who have been protesting peacefully causing no issues to other citizens. There are several cases filed on the journalists covering the story as to what is happening in the borders. The organisation has stated that “More than 125 persons, including farmers and also bystanders have reportedly been arrested largely in response to a violent clash that occurred on 26 January 2021. At least 21 farmers are reported to be currently missing.

Rihanna, one of the most famous pop stars in the world had tweeted on the issue asking the question “why aren’t we talking about this?”. She had inserted a CNN link describing the internet ban in the border. The popular teenage environmentalist had come in support too. However, several Indian celebrities including cricketers and actors had come in support of the government and all the tweets had similar wording. The ministry had ensured all the celebs tweeting in support include hashtags #IndiaTogether and #IndiaAgainstPropaganda to emphasise the argument they are making. Greta Thunberg had tweeted a tool kit which had the schedule for the protests and other sensitive information. However, the tweet had been taken down soon after she had posted. This had led to tool kit debate and the police had arrested Disha Ravi, a 21 year old environmentalist who had direct connection with the tool kit issue. The Ministry of External Affairs had responded to such international criticism by stating that the comments made by the critics are inaccurate and irresponsible. This shows a clear trend in India where the freedom of expression has been violated as certain people are targeted when they speak against the government. There are also farmers being targeted after their views against such bills and have been arbitrarily arrested. This clearly shows the breach of basic fundamental and human rights by the government. To understand this issue more, we now look into how such rights are being violated by the government.

Human Rights Violations by the Government

A resolution had been passed by the United Nations Human Rights Council that countries must not shut down internet access provided for the people. However, the resolution had been non binding. The resolution had focused on basic tech and digital rights. Importance must be given to both the rights provided, offline or online. Taking down such internet is a clear violation of Article 19 of the UDHR (Universal Declaration of Human Rights). However, the resolution had received requests by certain countries for amendments. India, Russia and China had sent in such requested and was in support for the amendments. The countries that had come in support clearly shows how such countries want to break down the walls of defense to protect the freedom of expression. Equality has not been given the online right. In the age of technology, no country should have the right to tamper with the access to internet.

The non binding resolutions such as the one discussed above cannot hold countries legally accountable if they do not abide by it. However, the countries have the moral obligation to follow such guidelines mentioned in the resolutions. The reason as to why such matters must be discussed earlier is due to the fact that several countries have been constantly shutting down internet access to its citizens during minor situations too. The respective governments think and assume that they have the free will to tamper with the internet and must be considered as a human right during this time and age. The office of the United Nations High Commissioner of Human Rights had also released a statement condemning the actions of the Indian Government and had stated that the right to peaceful assembly and expression must be taken into importance for both online and offline forums. They have urged the parties to come to a consensus soon.

The US government had also communicated to the Indian Government to focus on resolving the problems that have occurred between them and the farmers regarding the agricultural reforms. The US had also stated that such protests are a clear example of the country being a great democratic country. This country has seen several farmers protesting around the capital’s borders for nearly 3 months to ensure the government repeals such laws or bring in amendments favouring them. Mostly, the protests had been conducted in a peaceful manner but during republic day, the tractor rally had led to a chaotic day. The police had arrested several farmers arbitrarily and certain public properties had been damaged. Several farmers and certain FIRs had been filed against them and a number of journalists. As discussed earlier, the borders had seen an Internet shutdown which had been directed by the Home Minister, Amit Shah. However, the shutdown was short lived as the government allowed access on February 2, 2020. Although the ban had been lifted, the government had violated several human rights by first shutting down internet access and adding in barricades with barbed wires in the borders to ensure no one enters the city.

Conclusion

Now that we have a good idea as to the current farm laws scenario, the question still remains as to what can be done to amend such circumstances to the favour of the farmers and the central government. The farmers need a safety net. They need the government to listen to them and answer the queries one by one. However, the government and the police force must stop arresting the protestors arbitrarily and release the ones being held without proper reasoning. Yes, there are certain aspects that require changes, and the current stagnant agricultural structure must be amended. Invitation of the private companies into the agricultural sector can help the farmers in several ways regarding high scale production and sale of the produce. However, the farmers request the government to add in provisions that can aid them during rough circumstances if certain corporates decide to exploit them. The main provision that they require is the one that makes MSP (Minimum Support Price) mandatory during such trading of produce. To answer to the argument put forth as to MSP never being mandatory, it is easier for such farmers to hold the government liable compared to the private sector due to the abundance of resources and facilities they have to curb such situations. There is a high potential of these corporates entering the field and completely monopolising the sector by exploiting the small scale farmers and acquiring the land holdings with cheap prices. The government can never come to a consensus if they are not willing to make amendments to the laws. The addition MSP is the main reason as to why these farmers have been protesting day in and day out. The government should add in provisions that protect the MSP and the landholdings if they want the approval of the farmers. The strength of India lies within its diversity. The country is filled with diverse culture and opinions which only adds more power to its democratic structure. However, if people are not allowed to express their views or conduct protests in a peaceful manner, the whole structure will be damaged. The country will be subject to fascism and completely removes the freedom of expression. The farmers are the backbone of this country. Their queries must be answered effectively and the government should make the necessary amendments.

This paper has been written by Vaishnav Arunkumar. He is a third year BBALLB student at Jindal Global Law School.

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