In the past few days, as we have been witnessing protests agitating through states against the three ordinances released by the government and opposition parties, have gone as far as violently opposing the bill in the parliament, accusing the teardown of democracy and asks for revision or a rollback of the ordinances.

All this has spiraled down currently to a fundamental and existential validity of the ordinances which has raised some questions like; Is the government trying to sabotage APMC mandis and MSP? Is the government proposing privatization of agriculture and if yes will it benefit the farmers? Has the government rushed in passing this bill and is there revision needed? Does the bill hold the key to revolutionary advancement in the agriculture sector as the government claims and if yes, how?

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Will The MSP’s and Mandi’s Be Demolished?

When we come back to the first question which regards to the sabotage of APMC mandis and MSP’s the opposition has concocted a mechanism which emphasizes on the capitalization of corporates by offering competitive prices to the farmers in the first few years and when the mandis stand demolished they withdraw prices to a lower standard exploiting the farmers and forcing them to sell their produce at a lower rate.  

As far as the act regulates and is concerned with is that it allows inter and intrastate trade of farmers and denies state government from levying any market fee, cess, or levy outside the APMC area. (Refer to The Farmers Produce Trade and Commerce (promotion and facilitation)Ordinance 2020)

This means farmers are free to move their trades which they already do because statistics show only 6% of farmers sell their produce in state-regulated mandis at MSP, whereas 94% sell their produce independently to private firms and traders.

What Do These Ordinances Achieve (Scope)?

The farmers have a flexible basis of moving their produce and the ordinance provides a competitive ground of prices when MSP is set for a certain commodity. This even allows a pool of farmers to enjoy economies of scale when and if their produce is pooled and sold to a private entity.

Prime Minister Narendra Modi shared an instance of Bihar where farmers pooled their resources and struck a deal with a huge rice manufacturing corporation and directed them to buy 4000 quintals of their produce through FPO.

People in favor of the ordinances argue that farmers can easily access competitive and beneficial prices if not offered by a private institution the produce can be sold to the mandis.

The procurement of large produces by the government sometimes seems to backfire as large amounts of the ration is seen rotting in FMCG storages and it is more productive to sell the produce when the market is diversified.

It is also reported that 30 to 40% of their produce is destroyed between transits.

The current mandi system has almost 8-9 middlemen that charge commission from theses farmers as well.

Contract Farming allows these farmers to individually or they can form a pool and have a deal with organizations that need their produce. The ordinance has provided both the parties with a dispute settlement mechanism as well. 

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What Are the Concerns Regarding These Ordinances?

Concerns were also raised that in the long run, these ordinances favor the closure of mandis.

The state government is responsible for the APMC mandis and providing prices favorable to the farmers.

Even the previous government in their rule was prone to the idea of having a mandi system minimalized by promoting the idea of having a farmers market every 2 km as accessing the mandi is a tedious job for a farmer. MP’s of the same party are seen to be against the movement now.

As far as what the bigger picture holds that is being propagated by the government is the variety of selling options to the farmer and liberalizing the trade to global industries with control of their own produce without the interference of middlemen.

The ordinances have nothing to do with MSP in the first place. MSP is governed by administrative decision-making under the recommended prices of the CACP(Commission For Agricultural Costs & Prices) which itself is not a statutory body but is attached with the Ministry of Agriculture and Farmers Welfare.

Although PM Narendra Modi guaranteed that MSP will still run, people question the sanctity of his words.

The doubt has been able to keep afloat but, the MSP program initially itself was devoid of legal backing in previous government rule.

Was The Decision Rushed? What Is The Potential Of These Ordinances?

Although there are arguments which are being made for the discussion of this bill so as it could have been more rich and concise as compared to its current standing which is explicable as such rash decisions may have been a contributing factor to farmers outrage and the state of turmoil it has left this country in.

A clear and understandable stand with critical discussions and elaboration would have had made the bill more deliverable as compared to now, where its facing sheer neglection from the majority of farmers belonging to the states of Punjab and Haryana.

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This bill can serve as a revolutionary step to progress in the agricultural environment with gates open to various global industries and big corporations that provide technology and techniques which enhance the produce for the farmers.