The bill replacing the Essential Commodities (Amendment) Ordinance, 2020, promulgated in June was passed in the Lok Sabha on Tuesday through a voice vote. The fresh amendment includes the introduction of three ordinances namely, 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.
While the government has stated that these ordinances aim to achieve a freer and more flexible system for both farmers and consumers, the amendment has received severe backlash. It was opposed by various parties led by the Congress, the Trinamool Congress, NCP, BSP, the CPI, and even BJP’s long time ally, Shiromani Akali Dal (SAD) in the Lok Sabha on Tuesday. The recent resignation of Union minister, Harsimrat Badal from the Cabinet is notably the most significant development against the Centre’s decision.
Additionally, thousands of farmers from Punjab, Haryana, and other states have taken to the streets to protest against the three ordinances. The farmer unions have claimed that the names of the bills are ‘highly misleading’, and have referred to them as “APMC Bypass Bill”, “Contract Farming Promotion Bill” and “Food Hoarding by Corporates Bill”.
Here’s why the ordinances are being opposed:
A stop to MSP
One of the primary concerns expressed by the opposition and farmers is that bill might put an end to MSP (minimum support price, offered by the government to ensure farmers against any sharp fall in farm prices) Farmers have repeatedly informed that farming is not profitable without MSP. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance will allow the sale of products outside the Agricultural Produce Market Committee (APMC) mandis while removing the barriers of inter-state trade. It will further prevent the state governments from collecting a market fee or levy for trade outside the APMC.
According to critics discarding the monopoly of APMCs will end the practice of procuring produce at MSP. “The Union government wants to crush the commission agents and the farmers by enacting the three new laws. The government’s assurance that the MSP will not be withdrawn and they will be free to sell their produce to private companies is dubious and cannot be trusted,” Preet Singh, the district president of Akhil Bhartiya Kisan Sabha told India Today.
An attack on cooperative federalism
While the Centre has argued that the ordinances will have constitutional propriety, the opposition has referred to them as a violation of the spirit of federalism. They have argued that agriculture and markets are State subjects. Trinamool Congress’ MP, Saugata Roy has moved a statutory resolution against the ordinance. Roy emphasized that the ordinances retract the states’ authority to regulate stocks and control “hoarding”. “The proposed amendments are an example of coercive federalism,” Roy said in a statement.
The threat of exploitation by private enterprises
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Ordinance lays the groundwork for contract farming. Even though contract farming is not a novel development, the concerns regarding formal contractual obligations have been mounting apprehensions. The complementary Price Assurance Bill promises to offer protection to farmers but fails to prescribe a system for price fixation.
Allowing complete liberty to private enterprises and MNCs is expected to lead to the exploitation of farmers. The agriculture sector is highly unorganized and people depending on the occupation will lack the resources required to battle such corporate industries.
Sukhbir Singh Badal, SAD chief, and BJP ally compared the amendment to the introduction of the telecommunication giant, Reliance Jio in the industry. “The farmer told me it’s like Reliance Jio. When they introduced the phone, the low cost offered by the company killed competition and when the monopoly of Reliance was established, it increased the prices. Similarly,
multinational companies will come to invest in the agriculture sector and offer facilities at low cost initially, only to hike it later,” he said in a statement.
Skewed regulation of farm produce
The Essential Commodities (Amendment) Ordinance allows the government to list certain items including food grains, fertilizers, petroleum products, etc as essential items while removing cereals, pulses, oilseeds, vegetables like onions, potatoes from the list. This will enable the government to regulate the production, supply, distribution, and trade and commerce of such items under extraordinary circumstances such as a war or natural calamities.
However, there must be a 100% increase in the retail price of horticulture produce as well as a 50% increase in the retail of non-perishable goods for the imposition of the stock limit under the ordinance.
“Any regulation on stock limits, purchases, and supply of food commodities will be removed, allowing the corporates to hoard unlimited quantities of food commodities and dominate the agriculture markets. Farmers and farmer producer organizations never had any such limits under ECA, so it is wrong to say that farmers will get any new freedom under the act. It is the corporates, who get the freedom to hoard food supplies,” a protester told India Today.
Demands of protesters and opposition
Countrywide protests have been witnessed in Punjab, Haryana, Telangana, Uttar Pradesh, and Odisha.
According to sources the farmers have put forward the following demands:
- Complete rollback of the three ordinances.
- Continuity of the mandi system.
- Abjuration of farmer loans
- A new law mandating the MSP to be 50% more than the weighted average cost of production. A failure in the payment of which shall be punishable by law.
- A law guaranteeing the payment from the buyers through middlemen to ensure that banks don’t deduct money in the name of loan recovery.
“The protest will be indefinite if the ordinances are not withdrawn. We will go to New Delhi and will be compelled to take extreme steps. The farmers are already stressed and are committing suicides every day. If these ordinances became law, they will destroy agriculture,” Sahab Singh, leader Bhartiya Kisan Union (BKU) had said.