Farmers Protest Against Corporatisation of Agriculture Through Three New Ordinances

The ruling party is facing political unrest over the introduction of three new agricultural ordinances, the following piece explores why the farmers are agitated.

A farmer is working in his agriculture field. Image Baliyans CC

Members of several farmers’ organisations like the Bharatiya Kisan Union and All India Kisan Sangharsh Coordination Committee (AIKSCC) thronged the streets in several parts of the country on Monday to protest against three agriculture related ordinances which they denounce as anti-farmer. The ordinances, promulgated by the central government on June 5 this year, are being tabled in the parliament’s ongoing monsoon session to be enacted into bills. Protesting farmers in Haryana’s Pipli and Kurukshetra were brutally lathi-charged, while many Haryana and Western UP farmers marching towards Delhi to join a protest were stopped at the borders. Whereas farmers in Punjab blocked three roads including the Delhi-Amritsar highway to stage their demonstration against the bills, in Hyderabad, farmers gathered for protest at the RTC Cross Roads had similar demands, as the unions urged Telangana State Assembly to pass resolutions opposing the bills. While the ruling government has passed the buck on to the opposition for instigating the protests, and claimed farmers’ resistance as being based on misapprehensions, farmers’ unions across the country have strongly articulated that the soon-to-be bills are detrimental to them and the farming sector of the country. 

A Brief Overview of the Ordinances 

The three ordinances are- The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020; The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020; and The Essential Commodities (Amendment) Ordinance, 2020. The unions opposing the ordinances have called the names misleading and renamed them as “APMC Bypass Bill”, “Contract Farming Promotion Bill” and “Food Hoarding by Corporates Bill” respectively. All three bills, they claim, are aimed not at empowering the farmers but at placing them under the dominance of the corporate players. Following is a dialogue script of the ongoing debates that seeks to briefly explain the objections of the farmers and the defences offered by the government on each of the three ordinances.

The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020

Objections by farmers: According to the farmer leaders, under this ordinance, the existing system of APMCs (Agricultural Produce Market Committee) and arhatiyas (commission regents, mostly influential in Punjab and Haryana) are set to be bypassed to make way for private companies and traders to monopolise the market. By defining a new “trade area” where the farmer can sell his produce independently outside the notified farm mandis i.e. the APMCs, the government is seeking to phase-out the regime of MSP (Minimum Support Price) that the farmers have come to be heavily dependent on. 

Government’s rebuttal: The centre makes the case that the ordinance merely seeks to provide more freedom to the farmers by giving them the choice of selling their produce anywhere in the country, outside the physical boundaries of the APMC mandis. These, noted the Union Agriculture Minister, will provide additional marketing channels to the farmers while the APMCs would continue to function. He added that this “will motivate APMCs to improve their efficiency of operations substantially to serve the farmers better”. The MSP, the centre has insisted, is here to stay.

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020

Objections by farmers: The major objection against this ordinance relates to the contractual farming nature of the agreement entered into by the farmers with the private players and big corporates. The framework created under this ordinance for trade agreements does not protect farmers against exploitation because in cases of dispute resolution, they will not have the resources for legal battle with private corporate entities.  Farmers also fear that the ordinance does not allow farmers to approach a civil court. Additionally, this ordinance gives free hand to corporate players to fix prices as no mechanism for price fixation has been provided in the said ordinance. 

Government’s rebuttal: The government’s defence for the ordinance is that the legislation allows the settlement of a mutually agreed remunerative price framework, which will be written in nature and hence formalised. The written agreement entered into prior to the production or rearing of farm produce will ensure supply, quality, grade, standards and price as these will be listed as part of the terms and conditions. Hence, the ordinance is there to protect and empower the farmers. 

The Essential Commodities (Amendment) Ordinance 2020

Objections by farmers: The amendment to the ordinance allows the removal of regulation of stock limits, purchases and supply of food commodities. This would give free rein to the corporates to hoard unlimited quantities of food commodities, control prices at will and hence dominate the agriculture markets. The amendment removes cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential items, thereby deregulating their distribution, production, storage and movement, except in times of war, famine, extraordinary price rise and natural disasters. And giving exemptions to exporters and processors even at such times.

Government’s rebuttal: The amendment, argues the government, will increase the income for farmers and improve the quality of the farm sector. By increasing private and foreign investment, especially in cold storage facilities and towards modernisation of the food supply chain, there will be adequate processing and storage facilities which will reduce wastage and bring up the incomes for farmers of perishable commodities. 

The ongoing farmers’ protests is a case of trust deficit in the central government’s policies. Farmers are questioning why the ordinances had to be tabled in such a hurry. For them, the bills  are clearly aimed to give entry to the private sector while they only scream losses for them. The state governments are concerned as the bills are being seen as an encroachment upon their functioning. They are also concerned because one of the provisions of the Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance states that  “no market fee or cess or levy, by whatever name called, under any State APMC Act or any other State law, shall be levied on any farmer or trader or electronic trading and transaction platform for trade and commerce in scheduled farmers’ produces in a trade area”. This affects the state governments revenue by a large extent. Farm leaders accuse the government of incentivising big corporates and not providing a level playing field to the APMC mandis that may continue to levy market fee as before. The relaxation in the market fee will be used by the corporations to initially offer better prices to the farmers and with the gradual collapse of the APMC system, the private entities will monopolise the trade, says Balbir Singh Rajewal, the president of Bhartiya Kisan Union. In the meanwhile, farmers’ organisations have issued an ultimatum to the central government till September 19th, after which they have warned of a nationwide protest if the ordinances are not repealed. 



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