Explained: Why are 3 agri bills angering India’s farmers?

The withdrawal of Harsimrat Kaur Badal from the Modi cabinet by Shiromani Akali Dal, BJP’s oldest ally, over the passage of three agri bills in Lok Sabha, stems from the extreme discontentment of farmers in Punjab and Haryana.

Even the Centre’s assurance that the bills wouldn’t do away with Minimum Support Price (MSP), but rather free agricultural trade of restrictions, open the market beyond ‘mandis’ and help small and marginal farmers sell produce at competitive prices, has done little to appease agriculturalists, who have taken to the streets in protest against the legislations.

While Badal expressed her discontentment over the passage of the bills in Lok Sabha “without addressing the apprehensions of farmers,” her husband and party president Sukhbir Singh Badal said the party stands with the farmers, hinting that a reconsideration on the alliance is on the cards.

But to understand the extreme step taken by the party, we need to understand the concerns and fear of the farmers – its chief vote bank – and why they oppose the bills.

Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill:

It seeks to enable farmers to sell their produce at competitive prices anywhere in the country, and most importantly outside notified mandis or markets run by the state-owned Agricultural Produce Marketing Committees (APMC).

The bill will open farmers to inter-state and intra-state trade unlike before as under the current system they are allowed only to sell their produce to licensed middlemen in the mandis.

The government argues that the bill will create an ecosystem where both farmers and traders will have the freedom of choice in selling or purchasing farm produce.

Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill:

The bills seeks to equip farmers with an agreement which would help them sign deals with agri-business firms, processors, wholesalers, retailers and exporters among others for farm services and sale of future produce at a price agreed on by both sides.

It also provides for a three-level dispute settlement mechanism – the conciliation board, sub-divisional magistrate and appellate authority.

Essential Commodities (Amendment) Bill: 

The bill will allow the Centre to regulate the supply of certain food items under extraordinary circumstances like war or a natural calamity. The government under the legislation can also impose stock limits on agriculture produce if there is a steep price rise.

Why are farmers upset?

While the farmers are protesting against all the three bills, most of their concerns are with provisions of the first bill – Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill.

A majority of farmers fear the concept of trading outside mandis, will strip them off the MSP fixed by the government, putting them at the mercy of big corporates who in turn will dictate the prices.

They fear this will create two different markets outside mandis, with two separate rules, defeating the purpose of the bill.

With mandis excluded under the definition of ‘trade area’ in the bill (which in turn includes any area or location, place of production farm gates, factory premises, warehouses etc) farmers say the provision will give more power to big corporate buyers, while alienating mandis.
Agriculture-dependent states too fear revenue loss from ‘mandi cess’ which will go down if farmers sell outside it.

When it comes to resolution of dispute, the farmers say the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill does not protect their interests as it doesn’t have provision for them to approach a civil court.