Analysis of farm bill

This article is written by Purva Tambe currently pursuing BA. LLB from IILS Law College (Pune).

Credits: Srihari Jaddu


The foundation of our society is farmers and they are the ones who provide us with all the food we consume. As a result, the country's entire population relies on farmers. Be it the smallest nation or the biggest, we are only able to survive on the planet because of them. Farmers are, thus, the world's most valuable citizens. While farmers are so important, they still do not have a proper life.

Farmers in India have been protesting vehemently ever since three controversial farm bills were passed without much debate in the Parliament. President Ram Nath Kovind gave his assent for the three contentious bills despite the intense protests across the country by farmers and opposition political parties.

What is a bill?

A bill is proposed legislation under consideration by the legislature. A bill does not become law until it is passed by the legislature and, in most cases, approved by the executive. Once a bill has been enacted into law, it is called an act of the legislature, or a statute. Bills are introduced in the legislature and are discussed, debated, and voted upon.

What are the three farm bills passed?

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020:

It aims to permit the sale of agricultural produce outside the mandis regulated by the Agricultural Produce Marketing Committees (APMC) constituted by different state legislations.

The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020:

It provides for contract farming.

Essential Commodities (Amendment) Bill, 2020:

It deregulates the production, supply, and distribution of food items like cereals, pulses, potatoes, onion, and edible oilseeds.

History of Indian system of agriculture

When India got independence, the moneylenders and the traders were the ones who dominated the distribution system of the agricultural sector. The farmers could not sell their produce directly in the markets, they had no means available to do so, and as a result, they were completely dependent on the moneylenders and the traders.

The moneylenders and the farmers exploited the farmers, and as a result, all the farmers had huge debts on their backs to repay. This agricultural system was not an efficient one and was exploitative towards the farmers. Thus the government came with a way to solve the problem through APMC-Agriculture Produce Market Committee.

The government set up special areas in the state and declared them as market areas. These market areas would be subject to the jurisdiction of the market committees. No farmers or traders would be able to freely buy or sell products in the market areas. If a trader wishes to buy any of the produce from the farmers they will have to use the license, this license system helps to bring a little control over the traders.

The government also assured that the MSP (minimum support price) will be granted to the farmers in these markets, that means a minimum price based on which, farmers will be able to sell their produce. APMC was a huge reason behind the success of the GREEN REVOLUTION. Later these areas were regulated under the state APMC act.

But over the years some defaults were seen in this APMC act:

  1. The market committee had extraordinary powers to grant a license to the traders

  2. The licensed commission agents that procured produce from the farmers started forming cartels and formulating deals with each other to collectively not buy produce from the farmers at a specified rate.

Why was the bill passed?

The newly adopted farm bills would grant farmers the right to trade through states and enable them to turn themselves into merchants with their goods and regulate the process. The goal of these three bills is that the new legislation will create an environment where farmers and traders will enjoy the freedom to choose agro-based-product sales and purchases and encourage barrier-free trade and trade within the state and outside the physical premises of markets notified under State Agricultural Produce Marketing legislations.

The drawback of the new method was that in the late 1800s, farmers faced many problems. Overproduction, low crop prices, high transportation costs, high-interest rates, and rising debt were among these concerns.

To mitigate these concerns, the farmers worked relentlessly. The working reliance on intermediaries, commission employees, and red-tapism of the APMC (Agriculture Produce Marketing Committee) officials is another big problem with the new MSP-based procurement method. An average farmer finds it difficult to get access to these mandis and usually depends on the market to sell farm produce.

Over 90% of farmers are beyond the control of the MSP-based procurement method. For farmer-based policies also, MSP has remained a highly emotional issue. The latest figures indicate that only 6% of farmers have access to the procurement system ba