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Centre should repeal ordinances farmers

Topics Covered: Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing.

Centre should repeal ordinances: farmers:


All India Kisan Sangharsh Coordination Committee (AIKSCC) has announced a “Corporates Leave Farming” campaign across the country on August 9 against the Centre’s recent ordinances on agriculture and farmer issues.

What’s the issue?

In June 2020, the Central government introduced three ordinances to bring in far-reaching agricultural ‘reforms’ in the country. They are:

  1. The Essential Commodities (Amendment) Ordinance, 2020.
  2. The Farmers’ Produce Trade And Commerce (Promotion And Facilitation) Ordinance, 2020.
  3. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020.

But, activists have expressed disappointment saying that the reforms package will not solve the problems of farmers, instead will exacerbate them.

General concerns:

  1. These are anti-farmer and will only result in reduced crop prices for farmers and undermine seed security even further.
  2. Food security will be eroded as government intervention is eliminated.
  3. These ordinances promote corporate control of the Indian food and farming systems.
  4. They will also encourage hoarding and black marketing, in addition to exploitation of farmers.

Let us now take up one by one;

  1. The Essential Commodities (Amendment) Ordinance, 2020:

Key provision: It allows for regulating the supply and stock limit of certain specified agricultural produce under extraordinary circumstances such as an extraordinary price rise and natural calamity of grave nature, etc.


  • The price range fluctuation allowed in this ordinance is narrow (100% increase in the retail price of horticultural produce and 50% increase in the retail price of non-perishable agricultural foodstuffs).
  • This stock limit regulation will not be applicable for value chain participants of any agricultural produce if their stock limit remains within their installed capacity.
  • It will also not apply to exporters if they can show demand for export.
  1. The Farmers’ Produce Trade And Commerce (Promotion And Facilitation) Ordinance, 2020:

Key provision: It seeks to effectively bypass the Agricultural Produce Market Committee (APMC) markets by providing for the freedom to trade in any area outside of private and APMC designated market yards.


  • This leads to a situation where local farmers do not find adequate demand for their produce at MSP in the local market.
  • Since most farmers are small or marginal landowners, they do not have wherewithal to transport their produce to large distances.
  • Hence, they are forced to sell them at a lower price than the MSP in the local market itself.
  1. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020:

Key provision: It seeks to create a legal framework for contract farming in India.

There are two broader concerns here:

  1. First, one principle concern with contract farming has been regarding the negotiating power of the two parties involved. It seems likely that individual farmers might not find themselves equipped or powerful enough to negotiate with corporates or big-pocket sponsors to ensure a fair price for their produce.
  2. Second, the ordinance says that the quality parameters can be mutually decided by the two parties in the agreement. But the quality aspect will become crucial when a few corporates will try to usher in uniformity which might end up adversely impacting the already skewed agro-ecological diversity in the country.


The three ordinances will have far-reaching and varying impacts depending on the social, political, economic and cultural contexts of the respective states.

  • But such bold and unilateral moves by the Centre fail to incorporate and give due consideration to the immense diversity in the country, not just between the states in terms of land ownership, cropping patterns, historical functioning of agricultural markets etc. but also within them.
  • Therefore, it is feared that the three ordinances rather than helping farmers, might end up being a source of distress for millions of small and marginal farmers in the country as have been observed in the past in cases of demonetization and COVID-19 related lock-downs.


Prelims Link:

  1. What are APMCs? How they are regulated?
  2. Overview of Model Contract farming act.
  3. What is an ordinance?
  4. The price range fluctuation allowed in the Essential Commodities (Amendment) Ordinance, 2020.
  5. Stock limit regulation under the Essential Commodities (Amendment) Ordinance, 2020 will not be applicable for?

Mains Link:

Do you think the reforms proposed for agricultural sector under the realm of Aatmanirbhar Bharat Abhiyaan ensure better price realization for farmers? Elucidate.

Sources: the Hindu.