2020 Farm Bills: How Do They Empower Indian Farmers?

The farm bills announced by the Loksabha have become a hot topic recently. Though there are some protests running against these bills, hopefully we believe it should come in favour of the farmers.

Let’s dive into details.

What are Farm Bills-2020?

Loksabha has announced three farm bills on 14th September 2020. They are:

  • The Essential Commodities (Amendment) Bill

This bill regulates the food supply even at the times of calamities such as famines. Also, there will be an imposition on the stock limit (agriculture produce) based on the rise in prices.

  • Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill

It is also referred to as the APMC ByPass Bill. Farmers and traders will have full freedom of choice for sale and purchase of their produce. No barriers for trading as this bill allows both intra and inter-state trading.

  • Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill

This bill allows fair and transparent prices for farmers. It allows creating a framework on farming contracts between farmers and buyers before production and farmers can sell their produce on pre-agreed prices.  

How do the bills empower Indian farmers?

It is farmer-centric!

Farmers will have full freedom to trade their produce anywhere (intrastate and inter-state trade) beyond the premises of APMC (Agricultural Produce Marketing Committee) markets and to anyone. They can contact well-known exporters and traders globally. They are the traders of their own produce.

It doesn’t affect MSP and Mandis!

It is not against agricultural Mandis (markets) as farmers still can choose to sell their produce at mandis. The minimum support price (MSP) that guarantees a minimum price for the crops will be continued as it was. It will be the same when farmers sell their produce through Mandis. Moreover, the MSPs were increased for some produces because of these bills. 

It improves the revenue of farmers!

As farmers can directly contact exporters and traders, they can get accurate and transparent prices for their produce. In India, 86 % are small farmers. With these new bills, they can get high revenues as there will be no squeezing of money through middle players.

No middle players!

According to the previous APMC system, farmers need to sell their produce through Mandis (markets) alone. This rise many middle players and they started to control the market prices. Thus, it leads farmers to get less revenue. Courtesy of these farm bills, farmers will have full authority over trading their produce.

It opens the door for electronic trading:

As these farm bills allow agriculture export, farmers avail alternative channels for trading to promote their produce and crops. Thus, farmers  can increase their revenue.

Farmers can engage in direct marketing & trade:

Farmers can contact and engage with wholesalers, traders, agri-business firms,  exporters, or large retailers. They will be able to understand the supply and demand, know the prices in advance and accordingly they can plan for profitable farming.