Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

Farmers’ protest


From UPSC perspective, the following things are important :

Prelims level: Recent Agricultural bills, MSP

Mains level: Concerns of farmers over this bill

Farmers all across the Punjab and Haryana have marched to New Delhi over the new legislations.

 Major cause of Farmers’ protest

  • Much of the opposition really is just to one of the three laws. It is the Farmers’ Produce Trade and Commerce (Promotion and Facilitation)  Act and its provisions that are seen as weakening the APMC mandis.
  • Even in that one — the act — there are only some contentious provisions, which, although key, can still leave doors open for negotiation.

A fight for privilege

  • Farmers, if anything, would gain from removal of stocking restrictions on the trade, as it potentially translates into unlimited buying and demand for their produce.

The contentious one: FPTC Act

  • The FPTC Act is a bone of contention. It permits sale and purchase of farm produce outside the premises of APMC mandis.
  • Such trades (including on electronic platforms) shall attract no market fee, cess or levy “under any State APMC Act or any other State law”.
  • An issue here is the very right of the Centre to enact legislation on agricultural marketing.
  • Article 246 of the Constitution places “agriculture” and “markets and fairs” in the State List.
  • But entry 42 of the Union List empowers the Centre to regulate “inter-State trade and commerce”.

An example of Central hegemony

  • While trade and commerce “within the State” is under entry 26 of the State List, it is subject to the provisions of entry 33 of the Concurrent List.
  • Under this, the Centre can make laws that would prevail over those enacted by the states.
  • Entry 33 of the Concurrent List covers trade and commerce in “foodstuffs, including edible oilseeds and oils”, fodder, cotton and jute.
  • The Centre, in other words, can very pass any law that removes all impediments to both inter- and intra-state trade in farm produce, while also overriding the existing state APMC Acts. The FPTC Act does precisely that.

Farmers question

  • Some experts make a distinction between agricultural “marketing” and “trade”.
  • Agriculture per se would deal with everything that a farmer does — right from field preparation and cultivation to also sale of his/her own produce.
  • The act of primary sale at a mandi by the farmer is as much “agriculture” as production in the field.
  • “Trade” begins only after the produce has been “marketed” by the farmer.

The centre’s overriding logic behind

  • Going by this interpretation, the Centre is within its rights to frame laws that promote barrier-free trade of farm produce (inter- as well as intra-state) and do not allow stockholding or export restrictions.
  • But these can be only after the farmer has sold.
  • Regulation of first sale of agricultural produce is a “marketing” responsibility of the states, not the Centre.

What do farmers’ want?

  • Farmers would want no restrictions on the movement, stocking and export of their produce.
  • For example, Maharashtra’s onion growers have vehemently opposed the Centre’s resort to ban on exports and imposition of stock limits whenever retail prices have tended to go up.
  • But these restrictions relate to “trade”.
  • When it comes to “marketing” — especially dismantling of the monopoly of APMCs — farmers, especially in Punjab and Haryana, aren’t very convinced about the “freedom of choice to sell to anyone and anywhere” argument.

Where lies the major issue?

  • Much of government procurement at minimum support prices (MSP) — of paddy, wheat and increasingly pulses, cotton, groundnut and mustard — happens in APMC mandis
  •  In a scenario where more and more trading moves out of the APMCs, these regulated market yards will lose revenues.
  • They may not formally shut, but it would become like BSNL versus Jio.
  • And if the government stops buying, farmers will be left with only the big corporates to sell to.

What could be negotiated?

  • If the protesting farmer union leaders were to sit down at the negotiating table, the government can possibly get them to agree to drop the demand on repealing all the three laws.
  • Their problem is essentially about the FPTC Act and its provisions that they see as weakening the APMC mandis.
  • These may be just fears, but they aren’t small.
  • From the government’s standpoint, the elephant in the room would be if the farmers insist on an additional demand: Making MSP a legal right.
  • This  would be still impossible to meet, even if the three farm laws were to be put on hold.


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