Comparison of the 2020 central farm laws with the amendments proposed by states

Prachi Kaur , Suyash Tiwari - December 7, 2020

A few weeks ago, in response to the initial protests by farmers against the new central farm laws, three state assemblies – Chhattisgarh, Punjab, and Rajasthan – passed Bills to address farmers’ concerns. While these Bills await the respective Governors’ assent, protests against the central farm laws have gained momentum. In this blog, we discuss the key amendments proposed by these states in response to the central farm laws.

What are the central farm laws and what do they seek to do?

In September 2020, Parliament enacted three laws: (i) the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, (ii) the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, and (iii) the Essential Commodities (Amendment) Act, 2020. The laws collectively seek to: (i) facilitate barrier-free trade of farmers’ produce outside the markets notified under the various state Agriculture Produce Marketing Committee (APMC) laws, (ii) define a framework for contract farming, and (iii) regulate the supply of certain food items, including cereals, pulses, potatoes, and onions, only under extraordinary circumstances such as war, famine, and extraordinary price rise.

How do the central farm laws change the agricultural regulatory framework?

Agricultural marketing in most states is regulated by the Agricultural Produce Marketing Committees (APMCs), set up under the state APMC Act. The central farm laws seek to facilitate multiple channels of marketing outside the existing APMC markets. Many of these existing markets face issues such as limited number of buyers restricting the entry of new players and undue deductions in the form of commission charges and market fees. The central laws introduced a liberalised agricultural marketing system with the aim of increasing the availability of buyers for farmers’ produce. More buyers would lead to competition in the agriculture market resulting in better prices for farmers.

Why have states proposed amendments to the central farm laws?

The central farm laws allow anyone with a PAN card to buy farmers’ produce in the ‘trade area’ outside the markets notified or run by the APMCs. Buyers do not need to get a license from the state government or APMC, or pay any tax to them for such purchase in the ‘trade area’. These changes in regulations raised concerns regarding the kind of protections available to farmers in the ‘trade area’ outside APMC markets, particularly in terms of the price discovery and payment. To address such concerns, the states of Chhattisgarh, Punjab, and Rajasthan, in varying forms, proposed amendments to the existing agricultural marketing laws.

The Punjab and Rajasthan assemblies passed Bills to amend the central Acts, in their application to these states. The Chhattisgarh Assembly passed a Bill to amend its APMC Act in response to the central Acts. These state Bills aim to prevent exploitation of farmers and ensure an optimum guarantee of fair market price for the agriculture produce. Among other things, these state Bills enable state governments to levy market fee outside the physical premises of the state APMC markets, mandate MSP for certain types of agricultural trade, and enable state governments to regulate the production, supply, and distribution of essential commodities and impose stock limits under extraordinary circumstances.

Chhattisgarh

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 allows anyone with a PAN card to buy farmers’ produce in the trade area outside the markets notified or run by the APMCs. Buyers do not need to get a license from the state government or APMC, or pay any tax to them for such purchase in the trade area. The Chhattisgarh Assembly passed a Bill to amend its APMC Act to allow the state government to notify structures outside APMC markets, such as godowns, cold storages, and e-trading platforms, as deemed markets. This implies that such deemed markets will be under the jurisdiction of the APMCs as per the central Act. Thus, APMCs in Chhattisgarh can levy market fee on sale of farmers’ produce in such deemed markets (outside the APMC markets) and require the buyer to have a license.

Punjab and Rajasthan

The Punjab and Rajasthan Bills empower the respective state governments to levy a market fee (on private traders, and electronic trading platforms) for trade outside the state APMC markets. Further, they mandate that in certain cases, agricultural produce should not be sold or purchased at a price below the Minimum Support Price (MSP). For instance, in Punjab sale and purchase of wheat and paddy should not be below MSP. The Bills also provide that they will override any other law currently in force. Table 1 gives a comparison of the amendments proposed by states with the related provisions of the central farm laws.

Table 1: Comparison of the central farm laws with amendments proposed by Punjab and Rajasthan

Provision	Central laws	State amendments
Market fee	The central Acts prohibit the state governments and APMCs from levying any market fee, cess, or any other charge on the trade of farmers’ produce outside the market yards notified or run by APMCs.	The state Bills empower the state government to levy a fee (on private traders and electronic trading platforms) for trade outside the markets established or notified under the respective state APMC Acts. Such fees collected will be utilised for the welfare of small and marginal farmers in case of Punjab, and for running of the APMCs and welfare of farmers in case of Rajasthan.
Minimum Support Price (MSP) - fixed by the central government, based on the recommendations of the Commission for Agricultural Costs and Prices	The central Acts do not provide for the MSP. They do provide for a contractual agreement for buyers and farmers to enter into prior to the production or rearing of any farm produce. This agreement must specify a minimum guaranteed price that the buyer will pay to the farmer for the sale.	The Punjab Bill provides that sale or purchase of wheat or paddy in state should be at prices equal to or above the MSP. The Rajasthan Bill provides that the pre-determined prices for all crop under farming agreements should be at prices equal to or above the MSP.
Penalties for compeling farmers to sell below MSP	Not prescribed.	In Punjab, if any buyer compels a farmer to sell wheat or paddy at a price below MSP, he will be penalised with an imprisonment term of at least three years and a fine. In Rajsthan, if a buyer compels a farmer to enter into a farming agreement below MSP, it will attract imprisonment between three and seven years, or a fine up to five lakh rupees, or both.
Delivery under farming agreements	The central Acts provide that the delivery of the produce can be: (i) taken by buyers at farm gate within the agreed time, or (ii) made by the farmer, in which case the buyer will be responsible for preparations for timely acceptance of the delivery. The buyer may inspect the quality of the produce as defined in the agreement.	In Rajasthan, if a buyer refuses to accept agricultural produce or take delivery of goods within a week from date of intimation by the farmer, he will attract imprisonment between three and seven years, or a fine of up to five lakh rupees, or both.
Regulation of essential commodities	The Essential Commodities Act, 1955 empowers the central government to regulate the production, supply, distribution, storage, and trade of essential commodities, such as medicines, fertilisers, and foodstuff. The Essential Commodities (Amendment) Act, 2020 empowers the central government to regulate the supply of certain food items, including cereals, pulses, potato, and onions, only under extraordinary circumstances such as war, famine, extraordinary price rise, and natural calamity of grave nature.	The state Bills provide that the respective state government will also have the powers to: (i) regulate the production, supply, and distribution of essential commodities, and (ii) impose stock limits under extraordinary circumstances. Such circumstances may include: (i) famine, (ii) price rise, (iii) natural calamity, or (iv) any other situation.
Imposition of stock limit	The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 provides that any stock limit will not apply to the farming produce sold under a farming agreement.	The Rajasthan Bill amending the central Act empowers the state government to impose stock limits, under certain conditions, on any farm produce sold under a farming agreement. These conditions are: (i) if there is a shortage of such farm produce in the state, or (ii) if there is a 25% increase in prices of such produce beyond the maximum price which was prevailing in the market (within two years before passing of such an order by the state government).
Dispute Resolution Mechanism for Farmers	The central Acts provide that at first, all disputes must be referred to a Conciliation Board for resolution. If the dispute remains unresolved by the Board after 30 days, the Sub-Divisional Magistrate (SDM) may be approached for resolution. Further, parties can appeal to an Appellate Authority (presided by collector or additional collector) against decisions of the SDM. Both SDM and Appellate Authority will be required to dispose a dispute within 30 days from the receipt of application.	Instead of the dispute resolution mechanism specified under the central Acts, the Rajasthan Bill provides that disputes will be resolved by APMCs, as per the provisions of the state APMC Act.
Power of civil courts	The central Acts prohibit civil courts from adjudicating over disputes under the Acts.	The Punjab Bill allows farmers to approach civil courts or avail other remedies under existing laws, in addition to those available under the central Acts. The Rajasthan Bill provides that the jurisdiction of civil courts over disputes will be as per the state APMC Act and rules under it. Currently, the state APMC Act prohibits civil courts from adjudicating over disputes related to trade allowance and contract farming agreements under the Act.
Special provisions	-	The Bills provide that the state APMC Act will continue to apply in the respective states, as they did prior to enactment of the central Acts (i.e. June 4, 2020). Further, all notices issued by the central government or any authority under the central Acts will be suspended. No punitive action will be taken for any violation of the provisions of the central Acts.

Note: A market committee provides facilities for and regulates the marketing of agricultural produce in a designated market area.

Have the state amendments come into force?

The amendments proposed by states aim to address the concerns of farmers, but to a varying extent. The Bills have not come into force yet as they await the Governors’ assent. In addition, the Punjab and Rajasthan Bills also need the assent of the President, as they are inconsistent with the central Acts and seek to amend them. Meanwhile, amidst the ongoing protests, many farmers’ organisations are in talks with the central government to seek redressal of their grievances and appropriate changes in the central farm laws. It remains to be seen to what extent will such changes address the concerns of farmers.

A version of this article first appeared on Firstpost on December 5, 2020.

Legislation

Standing Committee's recommendations on the Whistleblower's Bill

Kaushiki - June 17, 2011

The government is considering a number of measures to tackle corruption such as the formation of the office of the Lokpal or Ombudsman to investigate corruption cases, the Judicial Standards and Accountability Bill, 2010 that requires judges to declare their assets, lays down enforceable standards of conduct for judges, and establishes a process for removal of the Supreme Court and High Court judges (see PRS Analysis) and the Public Interest Disclosure and Protection of Persons Making the Disclosure Bill, 2010. In 2004, following the death of whistleblower Satyendra Dubey, the government issued a notification laying down certain guidelines for whistleblowing and protecting whistleblowers. It introduced the Public Interest Disclosure and Protection of Persons Making the Disclosure Bill, 2010 in August 2010 to give statutory backing to the 2004 government resolution. Commonly known as the Whistleblower’s Bill, it seeks to protect whistleblowers i.e. persons making a public interest disclosure related to an act of corruption, misuse of power or criminal offence by a public servant. It designates the Central and State Vigilance Commissions to receive disclosures from whistleblowers and lays down safeguards for protection of whistleblowers (see PRS Analysis). The Bill was referred to the Departmentally related Standing Committee on Personnel, Public Grievances, Law and Justice. The Committee presented its report on June 9, 2011. Key recommendations of the Standing Committee

§ The Bill seeks to establish a mechanism to register complaints on any allegation of corruption or wilful misuse of power by a public servant. The Committee broadly agreed with the provisions of the Bill but hoped that the government would consider the recommendations and adopt them wherever found appropriate.
§ The Bill covers any complaint under the Prevention of Corruption Act, 1988; wilful misuse of power, and a criminal offence by a public servant. The Committee suggested that the scope of the Bill may be widened to include offences such as maladministration and human rights violations. Specifically, the Bill should cover accrual of wrongful gain to a third party. Also, the definition of “public servant” in the Indian Penal Code and the Prevention of Corruption Act, 1988 could be adopted for this Bill.
§ The Committee proposed that the defence forces and intelligence organisations should be included within the ambit of the Bill. There could be reasonable exceptions based on operational needs of the forces. Alternately, a separate authority could be set up for these exempted agencies. It added that the Bill should cover members of the Council of Ministers, the judiciary (including higher judiciary) and regulatory authorities.
§ The Bill states that a public interest disclosure can be made only to the Central or State Vigilance Commissions (VCs). The Committee is of the opinion that this may restrict access especially to population in remote areas. It recommended that the Rules should provide for a smooth and convenient system. The Committee added that if there are multiple points at which complaints can be made, the identity of the complainant should be strictly protected.
§ The Bill does not allow anonymous complaints. The Committee however suggested that if the anonymous complaints have supporting documents that substantiates the claims, the VCs can investigate it. It also advised that an alternative mechanism could be set up within or outside the Bill for inquiring into anonymous complaints.
§ The Committee recommended that there should be a foolproof mechanism to ensure that the identity of the complainant is not compromised with at any cost. This is especially important because without such a mechanism it would deter prospective complainants due to fear of harassment and victimisation.
§ The Bill allows the VCs to reveal the identity of the complainant to the head of the organisation if it is necessary to do so. The Committee recommended that the identity of the complainant should not be revealed to the head of the organisation without the written consent of the complainant.
§ The Committee felt that undue burden should not be placed on the complainant to provide proof to substantiate his case. As long as he is able to make out a prima facie case, the VCs should follow up on the case.
§ The Committee is of the view that the VCs should inform the complainant about the outcome of the complaint. Also, the VCs should give reasons if it decides to dismiss a complaint and the complainant should be given a reasonable hearing if he is not satisfied with the dismissal.
§ The Committee proposed that there should be a time limit for conducting discreet inquiry by the VCs, for inquiry by the head of the organisation and for taking action on the recommendations of the VCs. The authority would have to give reasons in writing if it wants the time limit to be extended. There should also be some mechanism to ensure that the directions of the VC are not avoided to protect the wrongdoer.
§ The Bill states that the VCs shall not entertain any complaints made five years after the action. However, the Committee is not convinced that this restriction should be prescribed. If at all there has to be a time limit, exceptions should be made in case of complaints which prima facie reveal offences of a grave nature.
§ The Committee recommended that the term “victimisation” should be defined and the whistleblower should be provided with sufficient protection to protect him from violence. Also, witnesses and other persons who support the whistleblower should be accorded the same protection.
§ The Committee strongly recommended that there should be a mechanism to ensure that the orders of the VCs are complied with. Stringent action should be taken against any person who does not comply with the order.
§ The Committee felt that the penalty for frivolous or malafide complaints was too high and should be substantially reduced. Also, while deciding whether a disclosure is frivolous, the intention of the complainant should be examined rather than the outcome of the inquiry. The complainant should also have the right to appeal to the High Court.

Home

MPs & MLAs

Legislatures

Parliament

State

Bills & Acts

Budgets

Policy

LAMP

Careers

Comparison of the 2020 central farm laws with the amendments proposed by states

Standing Committee's recommendations on the Whistleblower's Bill

Recent Posts