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Pankaj Tyagi
| Updated: 02 Oct, 2020 | Category: Latest News, Producer Company

Farmer Bill, 2020 – Highlights, Benefits, and Limitations

Highlights of Farmer Bill, 2020

Farmer Bill, 2020 left most of the farmers in a perplexing situation. Although the bill seems to be quite remarkable on some fronts, it has some severe downsides as well. The provision related to trader, trade area, market fee, and dispute resolution is a key area of concern in this bill. Let’s dive into the fact and see what provisions are included in the Farmer Bill, 2020.

Farmer Bill, 2020 – Highlights, Benefits, and Limitations

Read our article:The Essential Commodities (Amendment) Bill, 2020: Explained

Highlights on Advantages of the Bill

  • Empowering the farmer to enter into a commercial or direct contract with the organization, retailers, wholesalers, and exporters, etc. This will ensure access to the global market and omit the fear of manipulation.  
  • Investment by the buyer in terms of technology & infrastructure to encourage or promote the production of food grains. This will degrade the cost and boost up their income due to access to the latest technology. 
  • The buyer will be deemed as the source for yielding a good crop as soon as the terms of the contract come into effect. 
  • The contract will be confined around the agriculture produce only, instead of the agricultural land. The farmer can obtain credit and loan facilities from the relevant whenever the necessity arises. 
  • Crops under the contract will be exempted from the provisions related to the sale of agricultural produce and rules of the Essential Commodities Act[1]

Downsides of the Bill

  • The traders and the corporate will reap more benefits from such a bill as most of the farmers are illiterate and have weak negotiation skills. 
  • The small and marginal farmers may lose access to sponsors.
  • In the event of a conflict, the farmers are the ones who will suffer the most. Meanwhile, corporate, exporters, and other sponsors will likely adhere to an advantageous situation. 
  • It renders more relaxations to corporate in comparison to the farmers due to the exclusion of MSP from the bill. 

The Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020

Benefits

  • Farmers would no longer require selling their product to the APMC market only as the bill allows them to access the wider market. This would give them exposure to a considerable number of buyers. 
  • Bill advocates interstate trading, therefore, allowing the farmers to sell their product to any state with legal obstacles. Bill excels on the notion of ‘One Nation, One Market’.
  • It will throttle the competition in the market thus; allows farmers to get the best bargain for their produce. 
  • Promotes cost-cutting regarding transportation and marketing due to the incorporation of electronic trading platforms. 
  • Incorporation of an autonomous conflict resolution mechanism that allows the farmer to avert pending court litigation. 

Downsides

  • State governments may suffer from the loss of revenue in the long run as the farmers may choose to sell their products beyond the APMC markets. The “Mandi” act as a prominent source of income for the state government which will be disrupted after the advent of the new bill.
  • The introduction of the new bill will give the hard times to the “Commission Agents” as they will become ineffective after the exclusion of a middle man from the bill, allowing farmers to sell their product directly to registered traders.
  • Ultimately, it will put the brakes on an MSP based system. 
  • This will result in the complete disruption of the mandi system. 

Conclusion

Liberalization of trade and expansion of the market could make the Farmer bill, 2020 vulnerable to exploitation and monopolization. Perhaps the government is required to look into the matter again, identifying the loopholes, and make the necessary amendments that ensure the well-being of every entity associated with this bill. 

Read our article:Producer Company Registration – Know the Documents Required and the Incorporation Procedure

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Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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