The three farm bills had triggered protests by farmers, particularly in Punjab and Haryana. President Ram Nath Kovind  gave assent to three bills: The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020, and The Essential Commodities (Amendment) Bill 2020.

The bills were passed in parliament amid unprecedented protests by the opposition parties which also saw the suspension of eight Rajya Sabha MPs. The suspended MPs even spent a night outside Parliament in protest.

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The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 aims to permit the sale of agricultural produce outside the mandis regulated by the Agricultural Produce Marketing Committees (APMC) constituted by different state legislations.

The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020, provides for contract farming.

The Essential Commodities (Amendment) Bill 2020 deregulates the production, supply, distribution of food items like cereals, pulses, potatoes, onion and edible oilseeds.

Also Read | A look back at farm laws and farmers’ protest

The Shiromani Akali Dal (SAD), one of the oldest allies of the Bharatiya Janata Party at the Centre, walked out of the ruling National Democratic Alliance (NDA) in protest against the bills. SAD leader and Union Minister for Food Processing Industries Harsimrat Kaur Badal had also resigned
from the Prime Minister Narendra Modi-led cabinet.

Why the farmers are protesting

The
protests largely focus on changes made to “trade area”, “trader”,
“dispute resolution” and “market fee” by the ordinances, according to a report
in the Indian Express.

Under the first
ordinance, the existing mandis established under Agricultural Produce Market
Committee (APMC) Acts have essentially been excluded from the definition of
trade area.

While the
government argues that the creation of new trade spaces outside existing ones will
give farmers more freedom to conduct their trade, the protesters say the ordinance
will confine APMC mandis to their physical boundaries, giving a free hand to big
corporate buyers.

Also Read | We have decided to repeal all three farm laws: PM Modi

The first law also redefines the parameters to qualify as a trader. As per the changes
under the ordinance, processors, exporters, wholesalers, retailers and millers can
also be classified as traders.

While a
trader can operate in both APMC mandis and trade areas, they need a license as
per the State APMC Act to trade in the mandis. Currently, commission agents or ‘arhatiyas’
have to get a license to trade in a mandi.

The farm laws would also remove the pre-existing market fee charged by APMCs,
saying that the provision will reduce the cost of transaction, benefitting both
farmers and traders.

However,
protesters say that the new provisions do not provide a level playing field for
the APMC mandis and indirectly incentivises corporates.

They say
that the corporates can use the difference of prices outside mandis to offer
farmer better prices and with the eventual collapse of the mandi system,
monopolise the trade.

They are also concerned that the new ‘dispute resolution’ provisions in the ordinances
do not safeguard farmers’ interests when it comes to disputes between farmers
and traders.

They fear
that the proposed system, which provides for the two disputing parties to seek
a solution through an application to the Sub-Divisional Magistrate, can be misused
against them as it does not allow farmers to appeal in a civil court.