While the government stated about the ordinances that they will help the farmers to move towards a more flexible system, the farmers argued that in the grab of the ordinances, the government is trying to do away with the MSP regime i.e., to do away with the minimum support price. Bharatiya Kisan Union (BKU) and other farmers’ organisations took to the streets Thursday near Haryana’s Kurukshetra, protesting against three ordinances notified as a follow-up to the reforms announced in the ‘Atmanirbhar Bharat’ package by the Modi government in June.

The protests turned violent after police allegedly lathi-charged the agitating farmers when they tried to move to the rally venue — Pipli Mandi — by breaking down barricades. 

While the Superintendent of Police Astha Modi denied the allegations of lathi-charge, the BKU said that members of their union have suffered injuries. 

“They used the coronavirus outbreak as an excuse to stop the rally. It’s a murder of democracy,” BKU state unit chief Gurnam Singh told ThePrint. 

The farmers organisations were protesting against three ordinances announced on 5 June — the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020, and an amendment in the Essential Commodities Act, 1955 — which they believe are “anti-farmers”. 

The following are the three ordinances

The first ordinance

Three ordinances approved at a cabinet meeting on June 3 were hailed as landmark decisions that would benefit Indian farmers and transform the agricultural sector.

The first ordinance, the Essential Commodities (Amendment) Ordinance, 2020, amends the existing act to remove all agricultural commodities from the list of essential commodities. The government assumes that “the freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and attract private sector/foreign direct investment into agriculture sector. It will help drive up investment in cold storages and modernization of food supply chain.” Even though the government claims that the Essential Services Ordinance will help achieve price stability and benefit consumers, it will primarily help traders.

The second ordinance

The second ordinance approved by the cabinet was the Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, to promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations. It basically aims to create trading opportunities outside Agricultural Produce Marketing Committee yards which are run by the state. The government said that “this is a historic-step [in] unlocking the vastly regulated agriculture markets in the country”. According to me, it will also supplement the existing minimum support price procurement.

The third ordinance

The last and the third ordinance which was approved by the cabinet was The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020, which provides for a national framework for agreements with the farmer by any third party. It enables legal framework for contract farming.

Who benefits from these Ordinances?

Irrespective of the claim of the government, as stated in the text of the ordinances, they especially help or benefit the traders, especially big corporations. But they don’t benefit the farmers in any way. There ordinances together target mainly at usurping the state powers, and overriding the state laws and market committees. While agriculture is a state subject, the central government is involved in many aspects like planning, fund allocation and implementations. Agri-input companies, especially seed companies and agrochemical companies, from a very long time have been developing the view that the “centralization” of agricultural decisions would benefit them. As per the Essential Services Maintenance Act amendments, the Central government retains the power to impose restrictions on identified agri-produce, in emergencies, or as per prescribed procedure. This also takes away the “state government control” obtained from the same Act. In a way, this is also trying to bypass state governments. Farmers did not benefit from the Act earlier and neither will they do so from the amendment either. The central government, over the past few years has been pushing for reforms in trade of agriculture through ‘model’ legislation, which is a part of the Centre’s attempt to dilute the local agricultural market committees and area monopolization. The state government has not been inclined to switch to the model system simply because it destroys their source of income. But the government wants to take action as they are energized by post lockdown conditions and are willing to reform and liberalize.

With the removal of the “essential” tag, traders could still have to face barriers from the state, due to Agricultural Produce Market Committee Acts. One of the ordinances assure forward contract and barrier free trade and the traders and agricultural corporations have been assured of non-interference from the state government.

State governments would lose incomes from Agricultural Produce Market Committee-controlled trading. These three ordinances on agricultural commerce cut through state government incomes. The suzerainty of states over agri-produce will get diluted. Three actions, together, have the objective of reaching the last mile, leaving no scope for any intervention from state governments. But the consumers may have to face increased prices of the goods. Anti- imports are likely to increase in a liberalized atmosphere even when there is no such reference in the amendment, and if this happens then the farmers will be shortchanged due to the competition from imports and an information asymmetry in the market. This is going to be a power game, with different parties in control of the State Government. The reaction of the state government which is not controlled by the BJP needs to be seen. Farmers never mattered for any power mongering parties. For now, the Central government has decided to throw its weight behind traders, investors, aggregators, corporations, sellers, wholesalers and processors.

This article has been written by Oorvi Agarwal,  4th year, BA-LLB student of Symbiosis Law School, Hyderabad.

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