THE FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION) BILL, 2020

THE FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION) BILL, 2020 

WHY IN NEWS: 

• It seeks to allow barrier-free trade of farmers’ produce outside the physical premises of the markets notified under the various state Agricultural Produce Marketing Committee laws (APMC Acts). The Bill will prevail over the APMC Acts in the area outside such markets.

KEY FEATURES OF BILL:

• Barrier-free trade: The Bill allows barrier-free intra-state and inter-state trade of farmers produce outside:
  1. The physical premises of market yards run by the state APMCs and
  2. Other markets notified under the state APMC acts, such as private market yards and sub-yards, collection centers, and farmer-consumer markets.
• Under the Bill, the trade of farmers’ produce can be undertaken anywhere outside such markets, such as in places of production, collection, and aggregation, including:

1. 1. farm gates,
   2. factory premises,
   3. warehouses,
   4. silos, and
   5. cold storages.
2. Farmer: The Bill defines farmer as an individual who is engaged in the production of farmers’ produce, by self or by hired labor, and includes an FPO (farmer producer organization). An FPO means an association or group of farmers:
   1. registered under any law, or
   2. promoted under a central or state government scheme

• Payment to farmers: Traders transacting with farmers must make payments for scheduled farmers’ produce on the same day, or within maximum three working days provided a receipt is given to farmers on the same day.
• Electronic trading platforms: The Bill provides for setting up of electronic trading platforms to facilitate direct and online buying and selling of farmers’ produce, resulting in physical delivery of the produce
• The central government may prescribe modalities for such platforms
• No fees to be levied by states: The Bill prohibits the state governments and APMCs from levying any market fee, cess, or any other charge on the trade of scheduled farmers’ produce outside the APMC notified markets. 

POSITIVE IMPACT OF BILL 

• Single national market – Barrier free intra and interstate trade will form single national agricultural market. 
• Better discovery of price – Farmers will get better prices for their produce and will not be forced to sell their produce at prices decided by few traders at APMC mandis. 
• Investment in agriculture- Better return for farm produce will in turn result in investment in agriculture and increase in productivity. 
• Doubling the farmers’ income – increased income of farmers may fulfill the aim of doubling the farmers’ income by 2022-23. 
• Food processing industries – Free access to farms produce to buyers outside APMC may increase inputs to food processing industries thus developing it and increase their export potential. 
• Decrease cost to consumers – Taxes, charges currently levied in APMC will no longer be required. This will decrease cost of farm products to consumers and reduce food inflation and increase nutrition levels. 
• Elimination of intermediaries – Intermediaries in APMC results in exploitation of farmers. 
• Empowering farmers – It gives control over their produce and equal playing field with respect to buyers, aggregators, wholesalers etc. 

POSSIBLE NEGATIVE IMPACT OF BILL

• Direct encroachment of states’ rights – Since agriculture and markets are State subjects entry 14 and 28 respectively in List II, the Acts are seen as a direct encroachment upon the functions of the states and against the spirit of cooperative federalism enshrined in the Constitution.
• Loss of states revenue – Market fee, rural development fee, and Arhatiya’s commission are large source of revenue for states. With states not permitted to levy market fee/ cess outside APMC states like Punjab and Haryana may lose Rs.3500crores and Rs.1600crore each year.
• Dismantling of MSPs – Farmers are apprehensive that these Acts would pave the way for dismantling of the minimum support price (MSP) system and leave the farming community at the mercy of big corporates.
• Impact on electronic trading – Electronic trading like in e-NAM uses physical mandis structure. In case of dismantling of mandis, future of electronic transaction is questionable.
• Loss of employment – Commission agents and other people connected with mandis may lose employment if farm trade move out of mandis. 

WAY FORWARD: 

• Government should consult stakeholders and state governments. Their concerns should be addressed. Farmers should assured regarding continuation of MSP and if possible should be included in the Act.