Controversy, protests, MSP hike: The passage of farm bills

Amid protests over the farm bills, the government on Monday hiked the minimum support price (MSP) for key rabi crops for 2020–21 marketing season. The announcement of the hiked MSP for rabi crops including wheat, chana and others came after Prime Minister Narendra Modi said that MSP for farm products will continue under the farm bills passed by Parliament on Sunday.

*MSP is the price set by the government of India at which it purchases crops from the farmers. The idea of MSP is to protect them from price fluctuations.

Agriculture Minister Narendra Singh Tomar said that the central government has disbursed ₹1.13 trillion as MSP to farmers for rabi crops this year which is 30% higher than the previous crop year.

The controversial bills

The farm bills passed in the parliament have triggered controversies, protests and ruckus. What are these bills

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

The bill proposes a system which lets farmers sell and market their products outside notified Agricultural Produce Market Committee (APMC) mandis. It will create an ecosystem where the farmers and traders will have the freedom to sell, market and purchase agri-produce directly.

This will eliminate the middleman and the commission agent system. The state governments are opposing the bill as this will impact their share from the mandis.

*APMC is a marketing board established to govern the sale of agricultural produce by farmers in mandis.

Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020:

This legislation lets farmers engage in entering into contracts with wholesalers, corporate/private entities for sale and purchase of farm produce. The government claims it will transfer the risk of market unpredictability from the farmer to the sponsor under contract farming.

Essential Commodities (Amendment) Bill, 2020:

The bill removes cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. It provides for deregulation of production, storage of these food commodities. The government said the move will boost investment in the agriculture sector and will also create more storage capacities to reduce the post-harvest loss of crops.

The Clarification

The government said that these bills will help create ‘one nation one market’ and provide barrier-free trade to farmers while the opposition feared that this will remove MSP as well as let private players have the upper hand in the industry.

Therefore, the cabinet committee on economic affairs (CCEA) announced the increase in MSP to give the message that MSP and APMC mandis will continue. The PM said in a tweet that higher MSP will empower farmers and contribute to doubling their income. This along with the series of agriculture reforms passed by Parliament will ensure dignity and prosperity of farmers.

Agriculture Minister Narendra Singh Tomar said that the announcement of the hike before the onset of the rabi season (October-March) will help farmers make decisions on their crop structure, boost production and reduce import of these items. Farmers will be free to sell their produce outside these systems anywhere throughout the country to get remunerative prices, he added.

The implementation of these bills will be important to watch to see if these proposals will work in favour of the farmers and increase their income, as well as boost the farming industry of the country or, will it advantage the big companies more than the farmers?

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