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All about the 3 Modi govt ordinances Haryana farmers are protesting against

While govt stated the ordinances will help move towards a more flexible system, the farmers argued that in the garb of the ordinances, govt is trying to do away with the MSP regime.

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New Delhi: Bharatiya Kisan Union (BKU) and other farmers’ organisations took to the streets Thursday near Haryana’s Kurukshetra, protesting against three ordinances notified as a follow-up to the reforms announced in the ‘Atmanirbhar Bharat’ package by the Modi government in June.

The protests turned violent after police allegedly lathi-charged the agitating farmers when they tried to move to the rally venue — Pipli Mandi — by breaking down barricades. 

While the Superintendent of Police Astha Modi denied the allegations of lathi-charge, the BKU said that members of their union have suffered injuries. 

“They used the coronavirus outbreak as an excuse to stop the rally. It’s a murder of democracy,” BKU state unit chief Gurnam Singh told ThePrint. 

The farmers organisations were protesting against three ordinances announced on 5 June — the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020, and an amendment in the Essential Commodities Act, 1955 — which they believe are “anti-farmers”. 

While the government stated that these ordinances will help move towards a freer and more flexible system for both parties involved (farmers and sponsors that can be individuals, partnership firms, companies, limited liability groups and societies), the farmers argued that in the garb of these ordinances the government is trying to do away with the Minimum Support Price (MSP) regime. 

Their demands include — firstly, a roll back of all three ordinances, secondly the mandi system to remain in place, thirdly, their loans be cleared, and fourthly — in line with the 2006 Swaminathan report by The National Commission on Farmers — a law should be made for MSP to be at least 50 per cent more than the weighted average cost of production and if the MSP is not paid, it should be a punishable crime. 

And, finally, a law should be put in place that guarantees payment from the buyers through arhtiyas (middlemen) that has always been the norm to ensure that banks don’t deduct the money in the name of loan recovery.

ThePrint takes a look at the three ordinances, which have emerged as the primary bone of contention.


Also read: Modi govt’s three rushed ordinances can help agriculture, but not farmers


The first ordinance

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, does not do away with the APMC (Agricultural Produce Market Committee) system, but restricts it to “physical space of the market”, with transactions made outside of this area exempted from any taxes or fees associated with the APMC.

Through a “barrier-free trade of farmers’ produce” outside the markets notified under the various state agricultural produce market laws (state APMC Acts)”, this ordinance is “another milestone in the path of freeing up Indian farmers from the licence-permit raj”.

With its three-pronged governing technique, which limits APMC laws to market yards, allows private parties to set up online trading platforms and a “dispute-resolution mechanism for buyers and farmers to be operated by a sub-divisional magistrate” — this ordinance may go a long way in reducing the farm-to-fork mark-up. 

The mark-up is essentially the “difference between the price that farmers get for their produce and what consumers pay” and stands at 65 per cent for India, according to a Times of India report

The second

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance essentially talks about contract farming that allows farmers to sell their produce outside of the APMC via a “framework for farmers to enter into direct contracts with those who wish to buy farm produce”.

Overriding all state APMC laws, the ordinance gives way to a “farming agreement prior to the production or rearing of any farm produce” with a sponsor. 

The ordinance notes that there must be a duration for the agreement between the farmer and the sponsor, for example “one crop season, or one production cycle of livestock” with the maximum period being five years. In this agreement, price for the purchase must also be mentioned. 

In the existing APMC system, it is compulsory for farmers to go through a trader in order to sell their produce to consumers and companies. And it is this very system that has given rise to a cartel led by traders and uncompetitive markets.


Also read: Why Indian farmers have stayed poor & how Modi govt’s latest initiatives can change that


The third

The amendment to the Essential Commodities Act (ECA), 1955 — which originally “empowers the central government to control the production, supply, distribution, trade, and commerce in certain commodities” — aims to protect the farmers’ income as well as the consumers’ interest. 

However, this isn’t the first time an amendment has been made to the law. With its roots in World War 2, “two constitutional amendments had to be passed to ensure that the government could continue with the powers”. 

The amendment constitutes a new sub-section (1), which overrides Section 3, by limiting the powers of both central and state governments in regulating and imposing stock limitations on commodities. 

Regulations can now be imposed only in extraordinary circumstances that include “war, famine, extraordinary price rise and natural calamity of grave nature”. 

The second change in the amendment notes that a rise in price can dictate regulations with a 100 per cent rise for vegetables and a 50 per cent rise for lentils and cereals. 

However, both of these decisions are left to the state governments’ discretion. 

While imposing stock limits is only a part of Section 3 that the ordinance deals with, there are other provisions in this Section such as “banning transportation, forcing sales at below-market price, making trading in a commodity illegal, demanding licences or bonds before trading, and many more” that remain unmentioned. 

While the protests at Pipli Mandi have now subsided, the BKU has given the government an ultimatum of 10 days to fulfil their demands. 

If the three ordinances are not withdrawn by 14 September, the farmers have threatened to start a sit-in protest at all the district headquarters in Haryana from 15 September. 

And if no action is taken in another five days after that, all the roads in Haryana will be blocked by farmers’ demonstrations on 20 September.


Also read: Modi govt walks the talk on agriculture reforms. Now, fix the loopholes


 

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4 COMMENTS

  1. If Harsha reads this, just want to tell you go educate yourself properly. I have not even cleared class 12 and still I know that to develop agricultural sector is quite important for a country and it’s possible in India with subsidies and minimum support price. A liberal market it good but it will exploit farmers. Large amount of Indian population is engaged in farming activities and it will be worse for small and landless farmers who would not be able to have a decent price for their crop. If we take example of developed and prosperous countries like USA, their government also provide subsides to farmers even when their agricultural sector is so technologically advanced and the farmers are also rich. Also during this pandemic, a change like this may adversely affect farmers.

  2. Farmers protest in Pipli-Kurukshetra on 11 September 2020.
    According to news reports , a large number of farmers protested at Kurukshetra-Pipli in Haryana on 11 September 2020 against three Ordinances of the Central Government about trade of their produce. Some of them were said to have been lathi-charged. In this context , it may be apt to refer to predictive alert in this Vedic astrology writer’s article “ India in the year 2021 – planetary impacts interpreted : kushal kumar” published on 7 September , 2020 at theindiapost.com. The said article is mainly about the coming year 2021 but some glimpses of last four months from September to December in the present year 2020 have also been covered. While covering September-December 2020 , the predictive alert for more care and appropriate strategy reads like this :-
    “ Hotel or restaurants and MUCH THAT IS CONNECTED WITH EATABLES ……………….could also be in focus for their worrisome concerns. Some controversial law can engage attention”. The prediction seems to be somewhere closer to the happening.
    https://www.theindiapost.com/articles/india-in-the-year-2021-planetary-impacts-interpreted-kushal-kumar/ .

  3. Not a single one of the demands should be accepted. This is goondagardi in the name of democracy. The idea that govt will do away with MSP itself is misinformation which the media conveniently decided not to dispell. And why on earth should i as a taxpayer be ok with this nonsensical system of agriculture that we have adopted? You are keeping both the farmers and the consumers hostages to the middlemen and then expect the taxpayer to just take this? How long? How will we give our farmers prosperity with so many shackles? That too at the expense of the taxpayer money. Those who argue otherwise are indirectly supporting the poverty our farmers are stuck in and don’t understand basics of economics. I just hope these ordinances aren’t rolled back and are turned into law.

    • U r out if ur mind …the way govt is imposing conditions in the form of ordinance is a harm to the farmers az well as common janta..okay…so it should be withdrawn otherwise , anything can happen to the society and the bullshit man MODI..its ashamed that MODI is a leader of our economy ….illetrate man

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