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Panel submits report on farm laws to SC

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.

Panel submits report on farm laws to SC:


Context:

A Supreme Court-appointed panel has submitted its report on the three agricultural reform laws in a closed cover. The report will be revealed during the next hearing of the case.

Background:

The three laws which were passed by Parliament in September and are being opposed by farmers’ unions are:

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

On January 12, the Supreme Court suspended the implementation of the three laws and appointed a four-member committee of experts “to listen to the grievances of the farmers on the farm laws and the views of the government and make recommendations”.

What’s the issue?

The laws aim to deregulate India’s enormous agriculture sector.

  • The government says these laws will “liberate” farmers from the tyranny of middlemen.
  • But many farmers fear that they stand to lose more than they could gain from the new regulations and that the main beneficiaries will be agricultural corporations with gargantuan financial firepower.

So what do these new farm laws do?

  1. They make it easier for farmers to bypass government-regulated markets (known locally as mandis) and sell produce directly to private buyers.
  2. They can now enter into contracts with private companies, a practice known in India as contract farming, and sell across state borders.
  3. The new regulations also allow traders to stockpile food. This is a shift away from prohibitions against hoarding, which could make it easier for traders to take advantage of rising prices, such as during a pandemic. Such practices were criminal offences under the old rules.

Concerns of farmers:

More than 86 percent of India’s cultivated farmland is controlled by smallholder farmers who own less than two hectares (five acres) of land each.

  • The new rules remove many of their safeguards. Small farmers fear that they just do not have enough bargaining power to get the kinds of prices they need for a decent standard of living when they negotiate to sell their produce to larger companies.
  • The new laws also do not make written contracts mandatory. So in the case of any violation of their terms, it can be very hard for a farmer to prove that he or she has been aggrieved, giving them little recourse.
  • The new rules do not guarantee any minimum price for any product, and farmers worry that the existing MSP will be abolished at some point.

InstaLinks:

Prelims Link:

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

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.