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.

Policy

Central government’s response to the COVID-19 pandemic (May 11 – May 22, 2020)

Aditya Kumar - May 22, 2020

As of May 22, 2020, there are 1,18,447 confirmed cases of COVID-19 in India, which is 76% higher than the cases on May 11, 2020 (67,152). Out of total confirmed cases, there are 66,330 active cases, 48,354 patients have been cured/discharged and 3,583 have died (Figure 1). As the spread of COVID-19 has increased across India, the central government has continued to announce several policy decisions to contain the spread, and support citizens and businesses who are being affected by the pandemic. In this blog post, we summarise some of the key measures taken by the central government in this regard between May 11 and May 22, 2020.

Figure 1: Number of day wise COVID 19 cases as on May 22, 2020

Aatma Nirbhar Bharat Abhiyaan

On May 12, the Prime Minister, Mr. Narendra Modi, announced a special economic package of Rs 20 lakh crore (equivalent to 10% of India’s GDP) aimed towards making the country ready for the tough competition in the global supply chain and empowering the poor, labourers, migrants who have been adversely affected by COVID-19. Following this announcement, the Finance Minister, Ms. Nirmala Sitharaman, in five press conferences, announced the detailed measures under the economic package. The economic package includes earlier measures taken by the government to support the citizens and businesses of India. A break-up of the package is presented in Table 1.

Table 1: Break-up of stimulus from Aatma Nirbhar Bharat Abhiyaan package

Item	Key Topics covered	Amount (in Rs crore)
Stimulus from earlier measures	Pradhan Mantri Garib Kalyan Yojana, Tax Concessions, and the Prime Minister's announcement for health sector	1,92,800
Part 1	Business including Micro, Small and Medium Enterprises (MSMEs)	5,94,550
Part 2	Poor people including migrants and farmers.	3,10,000
Part 3	Agriculture and allied sectors.	1,50,000
Part 4 and Part 5	Part 4: Coal and mineral sectors, defence sector, civil Aviation, airports and aircraft Maintenance, Repair and Overhaul (MRO), power sector, social infrastructures, space, atomic energy. Part 5: Government reforms and other provisions including public health and education, additional allocation to MGNREGS	48,100
Sub Total		1,295,400
RBI Measures (Actual)	Reduction in Cash Reserve Ratio (CRR), Special Liquidity Facility (SLF) for mutual funds, Special refinance facilities for NABARD, SIDBI and NHB at policy repo rate	8,01,603
Grand Total		20,97,053

Note: Part 1, 2, 3, 4, 5 in the table above represents the five press conferences conducted by the Finance Minister to announce the details of the economic package.

Source: Presentation made by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman under Aatmanirbhar Bharat Abhiyaan to support Indian economy in fight against COVID-19, Ministry of Finance, May 13, 2020, PRS.

For more information on the details of the announcements made under Aatma Nirbhar Bharat Abhiyaan, please see here.

Finance

Following the Prime Minister’s and Finance Minister’s announcements, further announcements were also made.

Cabinet approved the additional funding of Rs three lakh crore to eligible MSMEs and interested MUDRA borrowers under the Emergency Credit Line Guarantee Scheme. The funding will be covered under 100% guarantee coverage by the National Credit Guarantee Trustee Company Limited in the form of a Guaranteed Emergency Credit Line facility.
Cabinet also approved the special liquidity scheme for Non-Banking Finance Companies (NBFCs)/Housing Finance Companies (HFCs). The details of the scheme were shared by the Finance Minister in May 2020 under the Aatma Nirbhar Bharat Abhiyaan.
Securities and Exchange Board of India (SEBI) revised the post-default curing period for credit rating agencies (CRAs) in their circular dated May 21, 2020. Now, once the default is cured and payments are regularised, CRAs will upgrade the rating from default to non-investment grade after a period of 90 days based on the satisfactory performance by the company during the period. As of now, after the entity corrects the default, the CRAs upgrade the rating from default to speculative grade in 90 days and from default to investment grade in 365 days.
On May 22, the Monetary Policy Committee of Reserve Bank of India (RBI), reduced the policy repo rate under the liquidity adjustment facility (LAF) by 40 bps to 4% from 4.4%. The marginal standing facility (MSF) and the bank rate have been reduced to 4.25% from 4.65%. The reverse repo rate has been also reduced from 3.75% to 3.35%.
The Reserve bank of India (RBI) issued a statement with various development and regulatory policies. The policies specify details on measures (i) to improve the functioning of market; (ii) to support exports and imports; (iii) to ease financial stress; (iv) for debt management. The cash reserve ratio (CRR) of all banks will be reduced by 100 basis points to 3%, which will provide a liquidity support of Rs 1,37,000 crore across the banking system. The policy extends the moratorium on payment of instalments of all type of loans as on March 1, 2020 by another three months (up to August 2020). This is applicable to loans from all commercial banks including Non-Banking Finance Companies (NBFCs) and co-operative banks.

Lockdown 4.0

The Ministry of Home Affairs (MHA) passed an order extending the lockdown till May 31, 2020. This lockdown will have more relaxations compared to earlier lockdowns.

Zoning of areas

The new guidelines have authorised states/union territories (UTs) to define the red, green and orange zones based on the parameters prescribed by the Health Ministry. The states/UTs can define a district, or a municipal corporation/ municipality or even smaller administrative units such as sub-divisions, etc. as a red or green or orange zone.

Red and Orange Zones: Within red and orange zones, the local authorities will identify containment and buffer zones based on the guidelines from the Health Ministry. Buffer zones are areas adjacent to containment zones which have a high probability of cases.
Containment Zones: Movement of individuals will not be allowed in containment zones to ensure strict perimeter control except for medical emergencies and supply of essential goods and services.

The prohibition of certain activities or restrictions in various zones within a state will be at the discretion of the state/union territory as deemed necessary.

Prohibited Activities

Some activities will continue to remain prohibited throughout the country. These include:

all international air travel of passengers, except for domestic medical services, domestic air ambulance and for security purposes or purposes as permitted by MHA;
metro rail services;
running of schools, colleges, educational and training/coaching institutions;
hotels, restaurants and other hospitality services, except for the running of canteens in bus depots, railway stations and airports;
places of large public gatherings such as cinemas, shopping malls, and gymnasiums entertainment parks;
social, political, cultural, and similar gatherings and other large congregations; and access to religious places/places of worship for the public.

Online/ distance learning is encouraged and permitted; and, restaurants will be allowed to operate kitchens for home delivery of food items.

National Directives for COVID Management

The Ministry of Home Affairs issued the National Directives for COVID Management, which apply to public places and work places. As per these guidelines:

wearing of face covers is compulsory;
spitting will be punishable with fine as may be prescribed in accordance with its laws, rules or regulations by the State/ UT local authority;
social distancing is to be followed by all persons in public places and in transport;
marriage related gathering has been limited to 50 guests;
for funerals/ last rites, the maximum number of persons allowed is 20;
consumption of liquor, paan, gutkha and tobacco etc., is not allowed in public places.

Guidelines for workplaces include:

employers will encourage practice of work from home to the extent possible;
staggering of work hours will be adopted in respect of all offices and other establishments.
there will be provision for thermal scanning, hand wash and sanitizers at all entry and exit points and common areas;
all work places and other sensitive locations are to be sanitized regularly.
social distancing will have to be ensured through adequate distance between workers, adequate gaps between shifts, staggering the lunch break of staff and so on.

Aarogya Setu

The District authorities will ensure installation of the Aarogya Setu application on compatible mobile phones of all individuals and will have to regularly update their health status on the app.

Aarogya Setu Data access and knowledge sharing protocol, 2020

The Ministry of Electronics and Information Technology, Government of India issued a notification on the data access and knowledge sharing protocol, 2020 in reference to the Aarogya Setu mobile application. The protocol will: (i) ensure secure collection of data by the mobile application, (ii) protect the personal data of individuals, and (iii) ensure efficient use and sharing of personal or non-personal data of the application users. The protocol provides principles for: (i) collection and processing of response data, (ii) sharing of response data, (iii) obligations of entities with whom the data will be shared, and (iv) sharing of data for research purpose. A sunset clause is applicable to the protocol subjecting it to a review after 6 months unless there is any extension of sunset clause in wake of the pandemic.

Travel and Movement

The Ministry of Railways announced to run Shramik special trains from all districts connected by railways in the country. The ministry is awaiting details on migrants from each district to operationalise the trains.
The Ministry of Home Affairs (MHA) has written to Chief Secretaries of all states allowing them to arrange special buses to carry people from railway stations to their home. This provision is applicable, with condition of maintaining proper social distancing norms, only at places where public or personal transport is not available.
On May 11, 2020, MHA passed an order permitting movement of individuals by trains. Following the order, 15 pair of trains are being run connecting New Delhi to Dibrugarh, Agartala, Howrah, Patna, Bilaspur, Ranchi, Bhubaneswar, Secunderabad, Bengaluru, Chennai, Thiruvananthapuram, Madgaon, Mumbai Central, Ahmedabad and Jammu Tawi.
The Ministry of Railways in consultation with the MHA and the Ministry of Health & Family Welfare, issued guidelines on partial restoration of train services (other than the Shramik trains) from June 1, 2020. 200 passenger trains with AC, Non-AC and general classes will be operationalised. Booking for these trains commenced on May 21, 2020. The guidelines contain detailed information on (i) booking of tickets and charting, (ii) quota permitted, (iii) catering, and (iv) linen and blankets. All passengers will have to download and use the Aarogya Setu mobile application.
On May 19, 2020, MHA issued a Standard operating Procedure (SOP) for movement of stranded workers by trains. As per the SOP, the Ministry of Railways will permit the movement of stranded workers by trains in consultation with MHA. The Ministry of Railways will finalise the schedules for trains including the stoppages and destinations and will communicated it to state/UTs. On arrival at the destination, the travelling passengers will have to adhere to the health protocols as prescribed by the destination state/UT. The inter-state movement of stranded persons by bus and vehicles will be allowed subject to mutual consent of the concerned States/UTs. The intra-state movement of vehicles will be at the discretion of the states/UTs.
The MHA amended the order on Lockdown 4.0 to facilitate domestic air travel for stranded persons. Following the amendment, the Ministry of Civil Aviation issued the order for commencement of domestic air travel of passengers from May 25, 2020. The passengers will have to show a self-declaration, using the Aarogya Setu mobile application, that they are free of COVID-19 symptoms and those with Red status will not be allowed to travel. The order contains three annexures with (i) general instructions for commencement of domestic air travel, (ii) the detailed guidelines to be followed by air passengers, and (iii) specific operating guidelines for major stakeholders.

Health

The Ministry of Health and Family Welfare issued: (i) updated containment plan on COVID-19, and (ii) updated containment plan for large outbreaks of COVID 19. These plans provide information on various scenarios of COVID-19 and strategies to control the spread of the disease including definitions, action plans and specific details on (i) identification of containment zones and buffer zones; (ii) perimeter control; (iii) support from various stakeholders such as testing laboratories and hospitals; (iv) pharamaceutical and non-pharmaceutical interventions; and (v) risk communication.

For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.

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

Central government’s response to the COVID-19 pandemic (May 11 – May 22, 2020)

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