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Three Farm Bills Receive Presidential Assent [Read Notification]

Sparsh Upadhyay
27 Sep 2020 2:26 PM GMT
Three Farm Bills Receive Presidential Assent [Read Notification]
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On Sunday (27th September 2020) the Ministry of Law and Justice (Legislative Department) notified the presidential assent to the following 4 Acts:-1. The Farmers' Produce Trade And Commerce (Promotion And Facilitation) Act, 2020; (Presidential assent received on 24th September)2. The Farmers (Empowerment And Protection) Agreement On Price Assurance And Farm Services Act,...

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On Sunday (27th September 2020) the Ministry of Law and Justice (Legislative Department) notified the presidential assent to the following 4 Acts:-

1. The Farmers' Produce Trade And Commerce (Promotion And Facilitation) Act, 2020; (Presidential assent received on 24th September)

2. The Farmers (Empowerment And Protection) Agreement On Price Assurance And Farm Services Act, 2020; (Presidential assent received on 24th September)

3. The Essential Commodities (Amendment) Act, 2020; and (Presidential assent received on 26th September)

4. The Jammu And Kashmir Official Languages Act, 2020 (Presidential assent received on 26th September)

Let's understand all these 4 Acts in brief.

1. The Farmers' Produce Trade And Commerce (Promotion And Facilitation) Act, 2020

Preamble An Act to provide for the creation of an ecosystem where the farmers and traders enjoy the freedom of choice relating to sale and purchase of farmers' produce which facilitates remunerative prices through competitive alternative trading channels; to promote efficient, transparent and barrier-free inter-State and intra-State trade and commerce of farmers' produce outside the physical premises of markets or deemed markets notified under various State agricultural produce market legislations; to provide a facilitative framework for electronic trading and for matters connected therewith or incidental thereto

The Act in Brief - This Act seeks to permit the sale of agricultural produces outside the markets (mandis) regulated by the Agricultural Produce Marketing Committees (APMCs) constituted by different state legislations.

As per the Statement of Objects and Reasons of the Bill (now Act), the regulatory framework of APMC laws "hindered the freedom of choice-based marketing and also the inflow of investment in the development of alternative markets and marketing infrastructure".

The definition of 'trade area' as per Section 2 (m) of the Act specifically excludes "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" and "private market yards, private market sub-yards, direct marketing collection centres, and private farmer-consumer market yards managed by persons holding licenses or any warehouses, silos, cold storages or other structures notified as markets or deemed markets under each State APMC Act in force in India".

"Trade area" means any area or location, place of production, collection and aggregation including (a) farm gates; (b) factory premises; (c) warehouses; (d) silos; (e) cold storages; or (f) any other structures or places, from where trade of farmers' produce may be undertaken in the territory of India.

The Act also permits electronic trading of scheduled farmers' produce in the specified trade area.

To give effect to the same, the following entities may establish and operate an electronic trading and transaction platform:

  • companies
  • partnership firms
  • registered societies (having PAN)
  • farmer producer organisation
  • agricultural cooperative society

The Act, through Sections 3 & 4, gives freedom to the farmer to indulge in intra-state or inter-state trade in areas outside the APMC mandis.

The Act also prohibits the collection of any market fee or cess under the state APMC Acts with respect to such trade outside the APMC market yards (Section 6).

A key provision of the Act is Section 14, which gives it an overriding effect over the inconsistent provisions of the State APMC Acts. Also, the Central Government has been given powers to frame rules and regulations under the Act.

Thus, an intention to centralize and homogenize the regulations relating to agricultural trade is evident.

The Lok Sabha on Thursday (17th September) passed the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 by voice vote.

To Read more about the Act and the Parliamentary Debate which took place related to this Act, please click here.

2. The Farmers (Empowerment And Protection) Agreement On Price Assurance And Farm Services Act, 2020

Preamble - An Act to provide for a national framework on farming agreements that protects and empowers farmers to engage with agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce at a mutually agreed remunerative price framework in a fair and transparent manner and for matters connected therewith or incidental thereto

The Act in Brief - This Act intends to provide for contract-farming. Section 3 of the Act states that a farmer may enter into a written farming agreement in respect of any farming produce. The Act seeks to fix some terms of such an agreement as follows:

Minimum period of agreement: one crop season/ one production cycle of livestock

Maximum period of agreement: five years (unless the production cycle is more than five years))

No farming agreement shall be entered into by a farmer in derogation of any rights of a sharecropper.

Pricing of farming produce

The price of farming produce and process of price determination should be mentioned in the agreement.

For prices subjected to variation, a guaranteed price for the produce and a clear reference for any additional amount above the guaranteed price, including bonus or premium, must be specified in the agreement.

The Act establishes a Registration Authority to provide for e-registry and for registration of farming agreements.

It also provides for conciliation and dispute settlement mechanism for settlement of disputes under the farming agreement. The jurisdiction of civil courts over such disputes have been barred, and they are to be resolved through the resolution mechanism provided by the Act.

At first, all disputes shall be referred to a Conciliation Board for resolution. If the dispute remains unresolved by the Board after thirty days, parties may approach the Sub-divisional Magistrate for resolution.

Parties will have a right to appeal to an Appellate Authority against decisions of the Magistrate. Both the Magistrate and Appellate Authority will be required to dispose of a dispute within thirty days from the receipt of the application.

The Act provides that a farming agreement may be linked with insurance or credit instrument under any scheme of the Central Government or the State Government or any financial service provider to ensure 'risk mitigation' and 'flow of credit' to farmer or Sponsor or both.

The Act further prohibits sponsors from acquiring ownership rights or making permanent modifications on farmer's land or premises.

Section 8 of the Act states that no farming agreement shall be entered into for the purpose of any transfer, including the sale, lease and mortgage of the land or premises of the farmer.

The Lok Sabha on Thursday (17th September) passed the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020, by voice vote.

To Read more about the Act and the Parliamentary Debate which took place related to this Act, please click here.

It may be noted that both the Bills (now Acts) [The Farmers' Produce Trade And Commerce (Promotion And Facilitation) Act, 2020 and The Farmers (Empowerment And Protection) Agreement On Price Assurance And Farm Services Act, 2020] have set off widespread farmers' protests who fear that shall not be paid the Minimum Support Price.

However, both the Agriculture Minister and the Prime Minister have assured that the Bills do not affect the mandate of MSP.

3. The Essential Commodities (Amendment) Act, 2020

Preamble - An Act further to amend the Essential Commodities Act, 1955.

The Act in Brief - The Act seeks to amend the Essential Commodities Act, 1955. When read with Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 and the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020, the Act aims to increase the availability of buyers for farmers' produce, by allowing them to trade freely without any license or stock limit.

The Act requires that the imposition of any stock limit on agricultural produce must be based on price rise alone.

A stock limit may be imposed only if there is:

  • 100% increase in the retail price of horticultural produce;
  • 50% increase in the retail price of non-perishable agricultural food items.

Also, the Act states that the powers of ECA to regulate the supply of food items like cereals, pulses, potatoes, onions, edible oilseeds, and oils can be exercised only under "extraordinary circumstances" like (i) war, (ii) famine, (iii) extraordinary price rise and (iv) natural calamity of grave nature.

Otherwise, the government has the power to regulate the production, supply, distribution etc of such food items even "for securing their equitable distribution and availability at fair prices".

Now the amendment has become law, this power over the said food items can now be exercised only under the specified "extraordinary circumstances".

The Lok Sabha on Tuesday (15th September) passed the Essential Commodities (Amendment) Bill, 2020 by voice vote, to replace its corresponding Ordinance, which was promulgated in June this year.

To Read more about the Act and the Parliamentary Debate which took place related to this Act, please click here.

Explained: The 3 Farmers Bills And The Controversies Surrounding Them

It may be noted that the Kerala government has decided to approach the Supreme Court against the Farm Bills (now Acts) passed by the Parliament.

A decision in this regard has been taken by the cabinet meeting held on Wednesday (23rd September), according to regional media reports.

The cabinet termed that the laws amounted to not just "gross violation of States' powers" but also "blatant and serious transgression of Constitutional norms", reported 'The Hindu Businessline'.

4. The Jammu And Kashmir Official Languages Act, 2020

Preamble - An Act to provide for the languages to be used for the official purposes of the Union territory of Jammu and Kashmir and for matters connected therewith or incidental thereto.

The Act in Brief - The Act declares the following languages as the official languages to be used for the official purposes of the union territory, from such date as the Administrator of the union territory may notify:

  • Kashmiri
  • Dogri
  • Urdu
  • Hindi
  • English

The Rajya Sabha on Wednesday (23rd September) passed the Jammu & Kashmir Official Languages Bill, 2020, to declare the abovementioned languages as official languages of the UT. It was passed by the Lok Sabha on Tuesday (22nd September).

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