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Explained: What are the three farm laws and what made them controversial?

Experts said the laws will free farmers from monopolistic APMCs and free them from the clutches of middlemen. Farmers feared the new laws would encourage corporatisation of agriculture and lead to inadequate demand for their produce

November 19, 2021 / 10:58 AM IST
Farmers protest against new agri laws. Representative image (Image: Reuters)

Farmers protest against new agri laws. Representative image (Image: Reuters)

Prime Minister Narendra Modi in his televised address to the nation on November 19 announced that the government has decided to repeal the three controversial farm laws passed in the Monsoon Session of Parliament last September.

Farmers, mostly from Punjab, Haryana and western Uttar Pradesh, have been protesting against the three laws for close to a year now. Punjab and Uttar Pradesh are heading to assembly polls early next year.

READ: 3 farm laws will also be withdrawn soon: Rahul Gandhi after cops start removing barricades at protest site

Thousands of farmers have been camping at Delhi border points since November last demanding a repeal of three farm 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 also demanded a legal guarantee on Minimum Support Prices (MSP) for their crops.

The contentious bills which received the President’s assent on September 27, 2020, were passed amid an uproar by opposition party leaders and farmers' unions. Several rounds of talks between the government and the farmers' union leaders were inconclusive.

The issue reached the courts and the Supreme Court on January 12 suspended the implementation of the three farm laws until further orders.

Bharatiya Kisan Union (BKU) leader Rakesh Tikait had recently said the Centre has time till November 26, a year since the protests started, to repeal the contentious farm laws, after which farmer protests around Delhi would be intensified.

Here is a primer on the three laws and why were they controversial:

The Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 or the FPTC Act

This law allowed farmers to trade their produce outside the physical markets notified under various state Agricultural Produce Marketing Committee laws (APMC acts). It overrode all the state-level APMC acts.

Also, read:In-Depth | One year later, where are the farmers’ protests headed? 

Though the farmers expressed objection to all the three farm laws, there key problem was this Act, also known as ‘APMC Bypass Bill’. Cultivators feared that its provisions would weaken the APMC mandis.

Clauses in sections 3 and 4 of the Act allowed the farmers to sell their produce to buyers from within or outside the state in areas outside the APMC mandis. Section 6 prohibited the collection of any market fee or cess under any state APMC Act or any other state law with respect to trade outside the APMC market. Section 14 gave an overriding effect over the inconsistent provisions of the State APMC laws and section 17 empowered the Centre to frame rules for carrying out the provisions of the law.

Farmers feared the new rules would lead to inadequate demand for their produce in local markets. They said transporting the produce outside mandis would not be possible because of lack of resources. This is precisely why they sell their produce at lesser than MSP prices in local markets.

Also, read: Farmers have right to protest but can't block roads "indefinitely": SC on protests at Delhi borders

Farmers were also angry with the clauses in Section 8 of the law that said that a farmer and trader could approach the Sub-Divisional Magistrate (SDM) to arrive at a solution through conciliation proceedings. While farmers said they are not powerful enough to access the SDM offices for dispute redressals, critics said this was akin to usurpation of judicial powers.

Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020

The law sought to create a legal framework for contract farming in its Sections 3-12. The farmers could enter into a direct agreement with a buyer before sowing season to sell their produce at pre-determined prices. It allowed setting up of farming agreements between farmers and sponsors. The law, however, did not mention the MSP that buyers need to offer to farmers.

Though the Centre said the law was an attempt to liberate farmers by giving them choice to sell anywhere, the farmers feared that it would lead to corporatisation of agriculture. They also feared this would mean the MSP will be removed. Critics also said that contract system would make small and marginal farmers vulnerable to exploitation from big companies unless the sale prices continue to be regulated as was being done before the new law came in.

Essential Commodities (Amendment) Act, 2020

Through an amendment, to the Essential Commodities Act, 1955, this law did away with the Centre’s powers to impose stockholding limit on food items, except under extraordinary circumstances.

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It also removed commodities such as edible oil, onion, and potato from the list of essential commodities. It enabled the government to regulate their supply or include these items back into the list only under “extraordinary circumstances” as per Section 1 (A) of the new law. This would not impact farmers much, experts had said.

As per this law, the stock limits on farming produce would be based on price rise in the market. They could have been imposed only if there was a 100 percent increase in retail price of horticultural products and a 50 percent increase in the retail price of non-perishable agricultural food items.

Gulam Jeelani
Gulam Jeelani is a journalist with over 12 years of reporting experience. Based in New Delhi, he covers politics and governance for Moneycontrol.