IS THE ‘DELHI CHALO’ PROTEST JUSTIFIED?

On 26-11-2020, a movement was started by the farmers against the three contentious Farm Laws promulgated by the Centre. As part of the ‘#Delhi Chalo’ Protest or the ‘head towards Delhi’, thousands of #Farmers from Punjab, Haryana, Rajasthan and Uttar Pradesh marched towards the National Capital and claim that they will be protesting indefinitely against the #Farms Laws in the National Capital from 26-11-2020.

The question that arises is the movement ‘Delhi Chalo’ justified or is it the outcome of political agenda aimed at tarnishing the Government’s efforts to bring reforms. This Article gives a bird’s eye view of the three Farm Laws and explains the purpose of the Acts. The reader can decide whether the Farm Laws are fair or foul and whether the movement ‘Delhi Chalo’ is necessary and warranted.

On 27-09-2020, the President gave assent to the three Farm Acts i.e.

1. #The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020;
2. #The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; and
3. #The Essential Commodities (Amendment) Act, 2020.

The three Acts are focussed on improving the lot of the farmers and aims at increasing opportunities for farmers where they will be able to enter long term sale contracts, to increase the availability for buyers, and will enable the buyers to purchase farm produce directly and in bulk.

However, these Acts are being touted as “anti-farmer” Acts and the Farmers want the Central Government to scrap the three legislations as they are detrimental to their interest.

HIGHLIGHTS OF THE ACTS

• The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 will allow the Farmers to take their produce anywhere inter-state or intra-state i.e. beyond the physical premises of Agriculture Produce Marketing Committee (APMC) markets. Under the said Act, the State Governments are prohibited from levying any market fee, cess or levy outside APMC areas. This would mean that the farmer can sell his produce in an area where he could get the best price for his agricultural produce as compared to the current trend where he is often forced to sell beyond his expected price. He therefore gets victimised despite having worked so hard throughout the year.
• The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 creates a framework for contract farming i.e. the farmers and buyers will have an option to negotiate the price and reach an agreement prior to the production or rearing of any farm produce.  This gives the farmer a head start as he would be in a position to assess his costs and his profits assisting him in deciding what to produce and quantifying the same.
• Under extraordinary circumstances (such as war and famine), The Essential Commodities (Amendment) Act, 2020 will allow the Central Government to regulate the supply of certain food items. Further, if there is a steep rise, the Stock limits may be imposed on agricultural produce.

The Objectives of the Acts are as follows:

1. To ensure that there is no barrier and a farmer is able to freely trade the agricultural produce outside the markets as notified under the various State APMC laws.
2. To facilitate Contract Farming.
3. To impose stock limits on the agricultural produce in cases of a sharp increase in retail prices.

KEY FEATURES

I. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020

• The Act allows the Farmers to take their produce anywhere inter-state or intra-state i.e. beyond the physical premises of APMC markets and other markets that are notified under the State APMC Acts. The farmers will be able to conduct trade in an ‘outside trade area’ i.e., any place of production, collection, and aggregation of farmers’ produce including: (i) farm gates, (ii) factory premises, (iii) warehouses, (iv) silos, and (v) cold storages (vi) any other structures or places.

• The Act allows the electronic trading of agricultural produce in the specified trade area through an electronic trading and transaction platform. Such platforms will be established and operated by a farmer producer organisation or agricultural co-operative society which will be helpful in facilitating the direct and online buying and selling of such produce through electronic devices and internet.

• Lastly, the Act will  prohibit the  State Governments from levying any market fee, cess or levy on farmers, traders, and electronic trading platforms for trade of farmers’ produce conducted in an ‘outside trade area’.

II. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020

• The Act provides for a Farming Agreement i.e. a farmer and a buyer will be able to negotiate the price prior to the production or procuring the harvest/farm produce. The minimum period for such an agreement will be one crop season, or one production cycle of livestock. The maximum period will be five years, unless the production cycle is more than five years.

• The price of the produce/harvest has to be mentioned in the Agreement. If the prices are prone to variation, then a guaranteed price for the produce and any reference for additional amount above the guaranteed price has to be specified in the Agreement. Furthermore, the process of determining the price has to be mentioned in the Agreement.

• The Act provides for a Dispute Resolution Mechanism. The Farming Agreement must provide for a process of settlement of disputes via Conciliation Process. All the disputes must be referred to the Conciliation board for resolution. In case of no settlement, the parties may approach the Sub-divisional Magistrate within a period of thirty days for resolution. An Appeal shall lie to the Appellate Authority (presided by Collector or Additional Collector) against the decision of the Magistrate. The Magistrate and the Appellate Authority has to decide the matter within a period of thirty days from the date of the receipt of the Application for dispute. Additionally, the Magistrate or the Appellate Authority, as the case may be, has a right to impose penalties on any party who breaches the Farming Agreement. However, no action will lie against any farmer for recovery of dues.

III. The Essential Commodities (Amendment) Act, 2020

• Under The Essential Commodities Act, 1955, the Central government has the authority to designate certain commodities (such as food items, fertilizers, and petroleum products) as essential commodities.  The Act provides that under extraordinary circumstances (such as war and famine, extraordinary price rise and natural calamity of grave nature), the Central Government will be able to regulate the supply of certain food items including cereals, pulses, potatoes, onions, edible oilseeds, and oils.

• Under The Essential Commodities Act, 1955, the Central government has the authority to designate certain commodities (such as food items, fertilizers, and petroleum products) as essential commodities.  The Act provides that under extraordinary circumstances (such as war and famine, extraordinary price rise and natural calamity of grave nature), the Central Government will be able to regulate the supply of certain food items including cereals, pulses, potatoes, onions, edible oilseeds, and oils.

• Furthermore, stock limits may be imposed on the agricultural produce, in cases of steep rise in the price.

• However, a stock limit may be imposed only in the following circumstances:

i. A 100% increase in retail price of horticultural produce;

ii. A 50% increase in the retail price of non-perishable agricultural food items.  

The Act further provides that this increase will be calculated over the price prevailing immediately preceding twelve months, or the average retail price of the last five years, whichever is lower.

Having discussed the aforesaid salient points of the Farm Laws, the author leaves the readers to conclude whether the Farm Laws are in the interest of the #farmers or not.

Sushila Ram Varma

Chief Consultant and Co-Founder

The Indian Lawyer & Allied Services