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Farm Laws 2020: Beginning of a new era and controversy behind

Farm Laws 2020: Farmers, a community, which gives us food to keep us alive, but the same was always kept under poverty in a planned manner by our policy makers. During the 800 years of slavery, it was only this community who suffered the maximum and always
remained below poverty. They suffered atrocities at the hands of Zamindars, Mahajans
etc. Their generations remained under loan taken by their fathers or grandfathers. With
the fight for independence another fight for land reforms was also fought by our
freedom fighters. Therefore after Independence unlike Britain where land belongs to
the King, we adopted the principle that land belongs to the tiller of the soil. As a result
immediately after getting independence Zamindari Abolition and Land Reforms Acts
and Agriculture Reforms Acts were enacted in all the States, against which a very long
legal fight was also fought by Zamindars and other ruling class but ultimately all these
Acts were upheld by the Hon’ble Supreme Court.

Agriculture Produce Market Committees (APMCs) were also established in all
the States through legislation. The idea behind establishment of APMCs was to provide
better and consolidated market to farmers to sell agriculture produce, to provide
farmers better prices for their agriculture produce, to save them from unnecessary and
arbitrary fee and taxes and to maintain their proper representation in management of
these agriculture markets. But even after 73 years of independence every year we see
lakhs of suicides of farmers due to financial crisis, their education, nutrition at the
minimum level. Most of the villages are far away from basic facilities of life such as
drinking water, medical, roads, electricity, communication or connectivity.

There is a well known slogan of political leaders that “India lives in villages”
just to get their votes but after winning elections they all unite with one goal that is to
keep farmers below poverty in planned manner.

The phenomenon of APMC and MSP (Minimum Support Price) always
remained very useful tools in the hands of policy makers to keep farmers below poverty
line always. When there is concept of MRP (Minimum Retail Price) for all other goods
produced or manufactures in India, why the concept of MSP was evolved for
agriculture produce only is a mystery which we have to understand. Initially MSP was
kept even lower than the cost price of any agriculture produce and farmers were bound
to sell their produce at that price, it is only during last few years MSP is gradually
increased above cost price but the difference of cost price and MSP of any agriculture
produce never touched the level of difference of cost price and MRP of any other
product. Several lakh suicides of farmers every year even after 73 years of
Independence clearly shows that the system of APMC and MSP blatantly failed in
achieving its objects. Therefore a need was being felt from a long time to change this

Critical Analysis of Farm Laws 2020

farm laws 2020

In last few years several States decontrolled several agricultural products by
amending schedules of their APMC Acts. On 5th June 2020 three Ordinances were
passed by the Modi Government, which were later on substituted by Acts by the
Parliament in September 2020, by overriding State APMCs Acts, which in the wisdom
of the Parliament was a solution to do away with the system of both APMC and MSP
and to eradicate long time poverty of farmers. Salient features of these 3 Farmers Acts
are summarized as under:

  1. The Farmers (Empowerment and Production) Agreement on Price
    Assurance and Farm Services Act, 2020:
    This Act empowers farmers to enter into farming agreements including “Trade
    and Commerce Agreements” or “Production Agreements” with any sponsor to produce
    or to sell farmers produce at the price agreed in these agreements with the sponsor and
    to handover delivery of farmers produce to any sponsor at any place outside the mandis
    under control of APMCs notwithstanding anything contained in any State APMC Act.
    Section 5 of this Act mandates that every such agreement shall specifically provide for
    (a) a guaranteed price to be paid for such produce and (b) a clear price reference for
    any additional amount over and above the guaranteed price, including bonus or
    premium to ensure best value to the farmer and such price reference may be linked to
    the prevailing prices in specified APMC yard or electronic trading and transaction
    platform or any other suitable benchmark prices.However section 5 is placed in this Act by the Parliament with intention to
    provide minimum guaranteed price to the farmers for their agriculture produce, which
    shall be fixed in advance in the farming agreement which will be executed at the
    beginning of season and may be for one season to 5 years but according to section 4
    that price shall be subject to quality, grade and standard. However section 5 also
    provide for price reference over and above the guaranteed price and prevailing prices
    in APMC yards.By closely looking into section 4 and 5 of this Act, intention of Parliament
    doesn’t seem to be wrong and an effort was done to make a fair balance between
    farmers and sponsors or future purchasers but since these provisions are not very
    properly worded, it annoyed the entire farmers community of the country because there
    is no guarantee of any MSP in section 5 of this Act.Regarding APMCs intention of the Government is clearly visible to decontrol
    farming produce from clutches of APMCs but still Parliament didn’t do it directly but
    did the same indirectly by snatching area of jurisdiction of APMCs without actually
    destroying or abolishing all APMCs in one go, however they could do so, but the same
    indirect method was not adopted by Parliament in case of MSP and it removed the MSP
    word from the entire Act, which was to be done by the Government at appropriate time
    in phased manner. Thus in my opinion if only few words are added in section 5 (a) and
    section 5 (a) is substituted like below the entire controversy of farmers will be solved
    and the intention of the Government will be fully visible and the entire farmers
    community will again started showing faith in the Government otherwise this little
    mistake may become cancer or epidemic.Present section 5 (a) a guaranteed price to be paid for such produce,

    section 5 (a) a guaranteed price to be paid for such produce,

    which shall not be less than Minimum Support Price fixed by the concerned
    State Governments for such produce irrespective of quality, grade or standard
    of such produce at the time of purchase.Apart from this dispute resolution mechanism is given in this Act, for
    which Central Government also notified Farmers Agreement on Price
    Assurance & Farm Services (Dispute Resolution) Rules 2020 on 21.10.2020
    and also issued Model Farming Agreement, which are available on the website
    of Ministry of Agriculture, Government of India.
  2. The Farmers Produce Trade and Commerce (Promotion and Facilitation)
    Act, 2020:This Act was enacted by the Parliament with the following purposes:

    1. To eradicate monopoly of APMCs from farmers produce,
    2. To open market of free trade and commerce in the field of farming
    3. To allow inter State and intra State trade of farming produce without any
      control of State Governments of APMCs
    4. To allow farmers to sell their farmers produce outside the area of APMCs as
      such by making entire country agriculture mandi or trade area
    5. To establish a system of trading of agricultural produce through electronic
      trading and transaction platform like Grofers, Big Bazar etc. and by providing
      mechanism for electronic registration for such trader and penalty for breach of
      any condition of registration by such trader,
    6. To develop a price information and market intelligence system for farmers’
      produce and a framework for dissemination of information relating thereto such
      as share market, gold market etc.

The Essential Commodity (Amendment) Act, 2020:

By this Amendment Act the Parliament inserted sub section (1A) in
section 3 of the Essential Commodities Act, 1955 and no provision of Essential
Commodities Act, 1955 was deleted. Before understanding true nature of this
Amendment Act, first we have to look into section 3(1) of the original Act
which runs as under:

“3. Powers to control production, supply, distribution, etc., of essential
commodities.―(1) If the Central Government is of opinion that it is
necessary or expedient so to do for maintaining or increasing supplies of
any essential commodity or for securing their equitable distribution and
availability at fair prices, 1[or for securing any essential commodity for
the defence of India or the efficient conduct of military operations], it may,
by order, provide for regulating or prohibiting the production, supply and
distribution thereof and trade and commerce therein.”

And newly inserted section 3 (1A) runs as under:
‘(1A) Notwithstanding anything contained in sub-section (1),—
(a) the supply of such foodstuffs, including cereals, pulses, potato, onions, edible
oilseeds and oils, as the Central Government may, by notification in the Official
Gazette, specify, may be regulated only under extraordinary circumstances which may
include war, famine, extraordinary price rise and natural calamity of grave nature;

By comparing both these provisions it is apparent that earlier Central
Government had powers under section 2A, to declare, add or remove any commodity
as essential commodity by notification in consultation with State Governments and
under section 3 Central Government may provide for regulating or prohibiting the
production, supply and distribution of any essential commodity and trade and
commerce therein for maintaining or increasing supplies of such commodity or for
securing their equitable distribution and availability at fair prices, or for securing any
essential commodity for the defence of India or the efficient conduct of military

However after coming into force newly inserted sub section 1A of section
3 now Central Government itself controlled its own powers by declaring that the supply
of such foodstuffs, including cereals, pulses, potato, onions, edible oilseeds and oils,
as the Central Government may, by notification in the Official Gazette, specify, may
be regulated only under extraordinary circumstances which may include war, famine,
extraordinary price rise and natural calamity of grave nature. The effect of this sub
section will be that supply and distribution of these food stuffs, notified by Central
Government, can be regulated only under extraordinary circumstances.

By Sub section (b) Central Government gave some relaxation to value chain
participants in stock limit of agricultural products, but such relaxation does not apply
in case any order is passed by Government in relation to Public Distribution System or
Targeted Public Distribution System.

Therefore it is clear that in fact this amendment also does not change the powers
of scenario. Earlier also Central Government had powers to add or remove any
commodity from the schedule of essential commodity and now also powers are same.
However certain relaxations are given to corporates involved in trade of farming
products for price hike and stock limit which are essential to give them if we are going
to enter in entirely a new era of contract farming. But these relaxations can again be
taken of by the Government in cases of emergency or for the purpose of Public
Distribution System.

Case Study: Laxmi vs Union of India

Objections and apprehensions against three Farm Laws:

There is a huge countrywide agitation against these new farm laws. The agitators
are challenging these farms laws on roads and in courts on several grounds. I tried to
accumulate their grounds, which in my wisdom are summarized as under:

(i) These laws will bring food stuff beyond reach of poor people and middle class
and will leave the entire market of food stuff in the hands of corporates without
any regulation and control.
(ii) Food prices will be uncontrolled like petrol or diesel and there will remain no
control of Governments over them and food will become a luxury item, which
will bring mass level malnutrition in the country. Governments could not
provide safe drinkable water in the entire country till now and such
uncontrolled price hike of food stuff will result in genocide of poor persons in
systematic manner.
(iii) There will be no control or role of State or Central Government on fixation of
MSP for farmers produce and there is no obligation on corporates to purchase
farmers produce on any minimum price or below MSP.
(iv) The price guaranteed in the agreement is subject to quality and standard, the
corporates may reject the produce after its production in the name of poor
quality and standard.
(v) These laws will struck down all State APMC laws in one stroke.
(vi) In the absence of funds and infrastructure gradually all APMCs will come to an
end and after some time there will remain control of big corporates only over
farming, farmers, food and agriculture industry.
(vii) A parallel uncontrolled and unregulated market will come into force,
(viii) There is enough scope in these laws for exploitation of poor and illiterate
farmers and to flourish corporate greed of multinational companies because
these big companies will always be in unequal bargaining position.
(ix) Parliament has no legislative competence to enact these farm laws,
(x) These laws are violative of fundamental rights guaranteed under Article 14 and
23 of the Constitution
(xi) These laws are violative of Article 39 (C), 40 and 243 G of the Constitution,
(xii) These laws are encroachment of Parliament on State subjects given in List II of
7th Schedule and as such against Federal Structure, which is a basic structure of

मोहरी बीबी बनाम धर्मोदास घोष

Analysis of objections and apprehensions:

As far as objections from (i) to (viii) are concerned they are mere apprehensions
of agitators with the presumption that every farmer in the country is illiterate and below
poverty line and he doesn’t know whether he is going to enter in a beneficial contract
or not. Here I would like to say that today we are not in 1950s but it is 2021 and please
don’t underestimate knowledge of farmers of this country.

There is enough education and literacy among farmers, their children are getting higher education, they are controlling maximum numbers of political posts all over country, internet and communication brought knowledge of the world in the mobile of everyone and in every family, all farmers have their bank accounts and they all can very well understand pros and cons of farming agreements, therefore to say that they are in unequal bargaining
position is not correct in present days situation. It is only beginning of a new era which
will end long lasting monopoly of APMCs throughout the country and will allow
farmers to sell their products outside mandi also at higher prices. It will always be open
for the farmers to sell their product in mandis if they will get better prices there. We
should be positive towards better future and should not forget that the law is always
dynamic and can be changed according to circumstances.

Keshavananda Bharti vs State of Kerala 1973

As far as objections no. (ix) to (xii) are concerned, these are legal contentions
and we have to analyse these objections under Constitutional perspective and the law
settled by the Hon’ble Supreme Court through several judgments. It is vell settled law
that any legislation can be challenged only on two grounds (i) it lacks legislative
competence or (ii) it is in violation of any fundamental right guaranteed under Chapter
III of the Constitution.

To determine legislative competence of Parliament these farm laws we have to
read Article 243 G, 246, 248, 249 and 250 of the Constitution along with certain entries
of List I, II and III of the 7th Schedule of the Constitution. It is well established that
Parliament is competent to enact laws on any subject given in List I and III and States
have exclusive rights to enact laws on the subjects given in any entry in List II and also
on any subject given in List III subject to the extent of inconsistency with any law made
by Parliament.

However according to Article 249 and 250 Parliament can also enact
laws on subjects of State list in case of emergency or in case any resolution is passed
by Council of States to that extent by two third majority of members present and voting.
For the sake of knowledge certain entries of these three lists may be referred, from
where sources of these laws can be drawn:

List I—Union List – Entries 42, 82, 92A and 92B
List II—State List – Entries 5, 6, 14, 15, 16, 17, 18, 21, 26, 27, 28, 30, 45, 46, 47, 48
and 49
List III—Concurrent List – Entries 6, 7, 18, 33 and 34


Since the validity of these laws is under challenge in the Hon’ble Supreme Court
and different high Courts, therefore I am not going in any deep study on that issue, and
it is for the Hon’ble Supreme Court to decide as to whether Parliament was competent
to enact these laws or not and under which of these entries. However to sum up in my
opinion if only one amendment is done in section 5 (a) of the Farmers (Empowerment
and Production) Agreement on Price Assurance and Farm Services Act, 2020, as
mentioned above, the Government can settle down the present controversy and can
leave the constitutional validity to be decided by the Courts. Otherwise all these three
farms laws are cumulatively make a very good package to bring the farmers and
farming in this country in new era to compete with international standards.

By: Dr Abhishek Atrey, Advocate On Record, Supreme Court of India

Dr Abhishek Atrey
Dr Abhishek Atrey


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