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

Examining pendency of cases in the Judiciary

Roshni Sinha - August 8, 2019

Yesterday, Parliament passed a Bill to increase the number of judges in the Supreme Court from 30 to 33 (excluding the Chief Justice of India). The Bill was introduced in view of increasing pendency of cases in the Supreme Court. In 2012, the Supreme Court approved the Scheme of National Court Management System to provide a framework for case management. The scheme estimated that with an increase in literacy, per capita income, and population, the number of new cases filed each year may go up to 15 crore over the next three decades, which will require at least 75,000 judges. In this blog, we analyse the pendency of cases at all three levels of courts, i.e. the Supreme Court, the Highs Courts, and the subordinate courts, and discuss the capacity of these courts to dispose of cases.

Pendency in courts has increased over the years; 87% of all pending cases are in subordinate courts

Sources: Court News, 2006, Supreme Court of India; National Data Judicial Grid accessed on August 7, 2019; PRS.

Overall, the pendency of cases has increased significantly at every level of the judicial hierarchy in the last decade. Between 2006 and now, there has been an overall increase of 22% (64 lakh cases) in the pendency of cases across all courts. As of August 2019, there are over 3.5 crore cases pending across the Supreme Court, the High Courts, and the subordinate courts. Of these, subordinate courts account for over 87.3% pendency of cases, followed by 12.5% pendency before the 24 High Courts. The remaining 0.2% of cases are pending with the Supreme Court. The primary reason for growing pendency of cases is that the number of new cases filed every year has outpaced the number of disposed of cases. This has resulted in a growing backlog of cases.

In High Courts and subordinate courts, over 32 lakh cases pending for over 10 years

Sources: National Data Judicial Grid accessed on August 7, 2019; Court News, 2006-17, Supreme Court of India; PRS.

In the High Courts, over 8.3 lakh cases have been pending for over 10 years. This constitutes 19% of all pending High Court cases. Similarly, in the subordinate courts, over 24 lakh cases (8%) have been pending for over 10 years. Overall, Allahabad High Court had the highest pendency, with over seven lakh cases pending as of 2017.

Despite high pendency, some High Courts have managed to reduce their backlog. Between 2006 and 2017, pendency of cases reduced the most in Madras High Court at a rate of 26%, followed by Bombay High Court at 24%. Conversely, during the same period, the pendency of cases doubled in the Andhra Pradesh High Court, and increased by 2.5 times in Karnataka High Court.

As a result of pendency, number of under-trials in prison is more than double that of convicts

Sources: Prison Statistics in India, 2015, National Crime Record Bureau; PRS.

Over the years, as a result of growing pendency of cases for long periods, the number of undertrials (accused awaiting trial) in prisons has increased. Prisons are running at an over-capacity of 114%. As of 2015, there were over four lakh prisoners in jails. Of these, two-thirds were undertrials (2.8 lakh) and the remaining one-third were convicts.

The highest proportion of undertrials (where the number of inmates was at least over 1,000) were in J&K (85%), followed by Bihar (82%). A total of 3,599 undertrials were detained in jails for more than five years. Uttar Pradesh had the highest number of such undertrials (1,364) followed by West Bengal (294).

One interesting factor to note is that more criminal cases are filed in subordinate courts than in High Courts and Supreme Court. Of the cases pending in the subordinate courts (which constitute 87% of all pending cases), 70% of cases were related to criminal matters. This increase in the pendency of cases for long periods over the years may have directly resulted in an increase in the number of undertrials in prisons. In a statement last year, the Chief Justice of India commented that the accused in criminal cases are getting heard after serving out their sentence.

Vacancies in High Courts and Subordinate Courts affect the disposal of cases

Sources: Court News, 2006-17, Supreme Court of India; PRS.

Vacancy of judges across courts in India has affected the functioning of the judiciary, particularly in relation to the disposal of cases. Between 2006 and 2017, the number of vacancies in the High Courts has increased from 16% to 37%, and in the subordinate courts from 19% to 25%. As of 2017, High Courts have 403 vacancies against a sanctioned strength of 1,079 judges, and subordinate courts have 5,676 vacancies against a sanctioned strength of 22,704 judges. As of 2017, among the major High Courts (with sanctioned strength over 10 judges), the highest proportion of vacancies was in Karnataka High Court at 60% (37 vacancies), followed by Calcutta High Court at 54% (39 vacancies). Similarly, in major subordinate courts (with sanctioned strength over 100 judges), the highest proportion of vacancies was in Bihar High Court at 46% (835 vacancies), followed by Uttar Pradesh High Court at 42% (1,348 vacancies).

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

Examining pendency of cases in the Judiciary

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