Being a farmer myself and selling produce in APMCs and to govt at MSP for years, I am scratching my head to find the cause behind these boycotts and protests against APMC Reforms Bill 2020. Here is my understanding of the Bill. PS : I don't know the future intentions of Govts
Right now, if you are a agro processing business, you can't buy farmer's produce directly from him. So the farmer has to go to APMCs and either sell it to govt at Minimum Selling Price or sell it to a dealer registered with APMC at market rate. APMC means Mandi in simple term.
So if I have 10bags of pulses and want to sell, Govt will be buying it to around 7000rs per bag. You need to get a token for that, they will give a date on which you need to get your produce to APMC, get it quality checked and leave it after weighing.
You gotta wait for a week or two for the payment to arrive directly into the bank. Now there is enough corruption in this process. Dealers registered with APMCs and some with power and money, buy the produce at rate lower than MSP from the farmer by paying him in cash instantly
Now they sell it to govt at MSP after doing every sort of corruption like mixing sand, low quality produce and what not. Since MSP money goes directly to farmer's bank account, they take a cheque signed by farmer in advance.
This process effectively renders the MSP irrelevant. Only benefit MSP is giving right now is the price stability at large. So what is this bill? Congress had it in their Manifesto. BJP is doing it. Opposition always preach moral high ground about how their intentions were good
But lets be real. People have different morals when in opposition and when in power, all they want is how to make money. I can not vouch for govt's intentions here but I can't say that it would be any different with congress or any other govt either. Now on to the bill
This bill plans to remove the barrier of selling farmer's produce only to APMC registered dealers. Now anybody can buy or sell the agricultural produce anywhere without any restriction. No need to pay Mandi Tax. No need of middle man. Buyer and Seller doing direct trades.
This is the ideal scenario. There is nothing wrong in it. APMCs didn't uplift any farmer in these 70years of freedom. Only middlemen are getting richer on the back of hardworking farmers. Now this is a welcome change. But MSP has to be continued to provide a price security cover
If MSP is not there, there gonna be exploitation. Govt has said even yesterday that MSP will continue and protects are valid to demand a written provision regarding the same in the bill. Now moving to the second part which seems wrong.
The Essential Commodities(Amendment) Act removes cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. This means that it will deregulate the production, storage, movement and distribution of these commodities. This should be protested
This provision will enable the big players to create artificial scarcity and higher inflation. BJP seems to have too much faith on their governance but this is a disaster move. It will directly affect everyday life. Congress should let bjp commit this blunder. Suicidal
Corruption is so rampant at every level that it renders every policy almost ineffective at ground level. I will explain it in some other thread some other day. One can never vouch the intentions of people in power as they only care about themselves.
Lifting APMCs restriction = Good (if MSP is retained)
Removing items from Essential Commodities list = Bad (infact can turn out to be very bad if there is no provision to regulate it)
I was done with this thread but then I read this
Well, man doesn't know how MSP works on ground clearly. Its done in Mandi premise but not via mandi. Mandi got no control over it. MSP purchases are done through Food Corporation of India and state agencies
since this thread got some attention, I did some more digging. Few Provisions are really good. THE FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION
AND FACILITATION) BILL, 2020 makes it mandatory for trader to pay farmer on same day or within 3 working days
Any entity with a PAN can build an electronic platform to facilitate the trade of agricultural produces.
No trade fees or cess or levy to be collected by govt from such trader or electronic platform provider.
SDM (sub divisional magistrate) to oversee the disputes. Penalty of min 25000 to max 500000 in case of payments not made within 3 days can be imposed
Another good thing is civil courts wont interfere in matters decided by SDM or other authorities described in the act. Now coming to other act i.e THE FARMERS (EMPOWERMENT AND PROTECTION)
This bill deals with the agreements that farmer can enter with traders or sponsors (mediators). The act aim to provide a safety net with a set of rules and regulations. First, It has to be written. It should have a defined period from min 1 crop season to 5 years.
No farming agreement shall be entered into by a farmer in
derogation of any rights of a share cropper (a person 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)
Such agreement shall explicitly provide for—
(a) a guaranteed price to be paid for such produce;
(b) a clear price reference for any additional amount over and above the guaranteed price, including bonus or premium (can be linked to MSP as well)
Sponsor to take timely delivery at farm gate. He can check quality before taking delivery otherwise he shall be deemed to have inspected the produce and shall have no right to
retract from acceptance of such produce at the time of its delivery
Payment has to be made at the time of delivery in all cases except in case of seeds when 2/3rd of payment is to be made at time of delivery and rest after certification but not later than 30days of delivery
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
a very good provision : agreement can be linked to any credit instrument means farmer can get bank loan or advance by using it as a collateral. At any time after entering, parties to such agreement may alter or terminate such agreement for any reasonable cause with mutual consent
Both bills talk about having an registration authority for the traders and the agreements as well. in case of dispute, SDM to be the first authority to take the case. again, easier than the civil courts but might again corrupt bureaucracy can run rampage.
whatever I have written here is my understanding as a farmer and after reading the bare acts as available on the public domain. It is not based on any sort of bias and I am just stating what I have seen and what is written in the act. You are free to interpret it
now coming to THE ESSENTIAL COMMODITIES (AMENDMENT) BILL, 2020 which seems the most illogical one. There are certain provisions there to stop the hoarding and controlling the artificial scarcity situation and they seem reasonable.
stock limit can be regulated if there is 100%increase in retail price of horticultural produce or 50%increase in retail price of nonperishable agricultural foodstuffs over the price prevailing immediately preceding 12months or avg retail price of last 5yrs, whichever is lower
This is becoming a long thread. I am trying to put some background on this amendment in Essential Commodities Act which govt is stating as a reason. Lets hear them out. Govt is relying on Economic Survey 2019-20.
This survey says that govt's effort to curb inflation via ECAct, actually didnt help the farmers much as it forced traders to buy less than their capacity. hence downplaying the demand. Since hoarding is discouraged, no private investment in warehousing etc.
Survey also says that without proper storage facilities, the produce is either sold very cheap or just become waste. Also hoarding restrictions also leads to harassment of traders and corruption. Removal of stock limit will be easy of business with more investment in agri sector
Govt is hoping that investment in cold storages and modernization of the food supply chain will increase which will create a competitive market environment and also prevent wastage of agri-produce that happens due to lack of storage facilities
well as I said earlier, you cant vouch for govt's intentions. Like everything, even this have 2 sides of coin. Given the banana republic we are in, it is not far fetched when we fear a worst case scenario because that is very much possible. Lets see how this unfolds
I would like to plug here a separate thread I have made on MSP
Another reason might be overflow of foodgrains stock with govt which last year govt had to auction back and still couldn't find buyers. Only 1/5th was sold. With stock limit removal, private players can now buy and hoard it or export it since India have surplus production
Central pool had 73.85 million tonnes of food grains on 2nd April, 2020. This is not only the highest-ever stock available but also over 300% of the strategic & operation reserve norm of 21.04 million tonnes. This year’s kharif crop production is also estimated to be record high
There has been a 65% year-on-year jump in registration applications for new food businesses, indicating that private players are eager to invest in agri business. Look at these figures and anybody sitting high in hierarchy would do the same. Retain MSP and this is a good move
As every govt policy, Implementation gonna be the key. Since stock limit have provisions as stated above like 50% rise in prices will allow govt to regulate it, if implemented properly should be keep the balance. Also the scope of blackmarketing is huge and there is no denial.
Also CACP has recommended to directly transfer the fertilizer subsidy into bank account of farmers rather than POS Sale of subsidized fertilizers at govt centers which will allow farmers to buy fertilizers according to nature of their soil and of choice. 5000rs in 2 installments
and plugging in the punjab protests thread
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