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Protest Against Three Ordinances

Protest Against Three Ordinances

Context:

Farmers in Punjab and Haryana and other parts of the country have been protesting against three ordinances promulgated by the Central government.

  • The government has introduced three Bills to replace these ordinances and recently Lok Sabha passed these bills.

Three ordinances:

  • The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020
  • The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020
  • The Essential Commodities (Amendment) Ordinance, 2020

Details:

  • Indian farmers are protesting against all three ordinances.
  • Their objections are mostly against the provisions of the first. And their concerns are mainly about sections relating to “trade area”, “trader”, “dispute resolution” and “market fee” in the first ordinance. 

Trade area:

  • Section 2(m) of The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 defines “trade area” as any area or location, place of production, collection and aggregation including:
    • farm gates; factory premises; warehouses; silos; cold storages; or any other structures or places, from where the trade of farmers’ produce may be undertaken in the territory of India.
  • The definition does not, however, include “the premises, enclosures and structures constituting:
    • Physical boundaries of principal market yards, sub-market yards and market sub-yards managed and run by the market committees formed under each state APMC (Agricultural Produce Market Committee) Act”.
    • It also excludes “private market yards, private market sub-yards, direct marketing collection centres, and private farmer-consumer market yards managed by persons holding licences or any warehouses, silos, cold storages or other structures notified as markets or deemed markets under each State APMC Act in force in India.

Concerns:

  • The existing mandis established under APMC Acts have been excluded from the definition of trade area under the new legislation.
  • As per the government, the creation of an additional trade area outside of mandis will provide farmers with the freedom of choice to conduct trade in their produce.
  • Farmers mentioned that this provision will confine APMC mandis to their physical boundaries and give a free hand to big corporate buyers.

Trader:

  • Section 2(n) of the first ordinance defines a “trader” as “a person who buys farmers’ produce by way of inter-State trade or intra-State trade or a combination thereof, either for self or on behalf of one or more persons for the purpose of wholesale trade, retail, end-use, value addition, processing, manufacturing, export, consumption or for such other purpose”.
    • Thus, it includes processor, exporter, wholesaler, miller, and retailer.
  • According to the Ministry of the Agriculture and Farmers’ Welfare, “Any trader with a PAN card can buy the farmers’ produce in the trade area.”
    • A trader can operate in both an APMC mandi and a trade area.
      • However, for trading in the mandi, the trader would require a licence/registration as provided for in the State APMC Act. In the present mandi system, arhatiyas (commission agents) have to get a licence to trade in a mandi.

Concern:

  • Arhatiyas have credibility as their financial status is verified during the licence approval process. “But how can a farmer trust a trader under the new law?

The provision on ‘market fee’ :

  • Section 6 states that “no market fee or cess or levy, under any State APMC Act or any other State law, shall be levied on any farmer or trader or electronic trading and transaction platform for trade and commerce in scheduled farmers’ produces in a trade area.
  • As per the government, this provision will reduce the cost of the transaction and will benefit both the farmers and the traders.
  • Under the existing system, such charges in states like Punjab come to around 8.5% — a market fee of 3%, a rural development charge of 3% and the arhatiya’s commission of about 2.5%.

Concern:

  • This provision does not provide a level playing field to APMC mandis. 
  • The provision of dispute resolution under Section 8 does not sufficiently safeguard farmers’ interests.
  • In case of a dispute arising out of a transaction between the farmer and a trader, the parties may seek a mutually acceptable solution through conciliation by filing an application to the Sub-Divisional Magistrate. 
    • The Sub-Divisional Magistrate shall refer such dispute to a Conciliation Board to be appointed by him for facilitating the binding settlement of the dispute.
  • Farmers fear the proposed system of conciliation can be misused against them. They say the ordinance does not allow farmers to approach a civil court.

Source: Indian Express