Explained: Where the Union govt stands on making changes to the Farm Acts

The government said it was open to strengthening mandis, create a level-playing field with proposed private markets, and more.
Farmers shout slogans against farm laws at Singhu border, New Delhi
Farmers shout slogans against farm laws at Singhu border, New Delhi
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After marathon talks — the fourth round between the farmers and the government — failed, the Union government seems to be giving an inch by expressing its willingness to cede some ground. The standoff between the two parties continued with talks failing on Thursday as well,  with protestors refusing to budge on their demands. The next round of discussions will be on Saturday in a bid to forge a resolution.

If Agriculture Minister Narendra Singh Tomar’s statement is any indication, the government is open to making some key changes to the Farm Acts, and would consider ways to strengthen mandis, create a level-playing field with proposed private markets, and freedom to approach higher courts for dispute resolutions in a bid to address the concern raised by protesting farmers' groups. He also asserted that procurement at Minimum Support Price (MSP) will continue. 

  1. Non-APMC mandis and tax parity

Tomar’s statement could be an indication that the government may be open to amending provisions of the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act. Commonly known as the Marketplace law, it says that instead of selling their produce at an Agricultural Produce Market Committee (APMC) market or mandi where an MSP is set, farmers can sell their produce anywhere. Transactions done in APMC mandis usually have a levy that is imposed by the government, and now, transactions done outside are exempt. 

Most farmers are small and marginal farmers. While the law may seem that it is opening up access to farmers to be able to sell anywhere, it will hit small and marginal farmers only harder and potentially create an alternative system of sale. This system could expose them to larger players who they may not be able to take on. Freedom of choice doesn’t guarantee much when the interests of the farmers cannot be protected. 

This new system, Tomar said, the government is open to regulating. "Farmers and their unions are worried that the new laws will end the APMC system. The government will consider ways to strengthen the APMC framework so it becomes of greater use. As far as the new Acts are concerned, there are provisions for private mandis outside the purview of the APMC. Those private mandis would be set up and we will discuss how there could be a tax parity between these private ones and those set up under the APMC Act," he said.

Among the proposals being discussed, according to the Indian Express, is that new trade areas would be exempted from a market fee but not the rural development cess. The cess is imposed by the state government.

  1. Dispute resolution

The second point of contention on the farm laws is dispute resolution. As things stand in the new laws, disputes that arise out of these alternative markets cannot be raised in civil courts. Instead, they will have to approach an authority or board appointed by the Sub-Divisional Magistrate (SDM) by way of a conciliation process. Their orders would have the “force of the decree of a civil court” the section reads. 

If the parties don’t resolve their differences by way of the board, then they can approach the SDM to settle the dispute, and if needed, this can be appealed before the Collector or the Additional Collector. This has been raised as an issue as well as it is being viewed as a denial of justice as they would not be able to approach a higher court in cases of disputes, which the government has said that it is open to considering. There is also fear that this kind of dispute resolution mechanism will favour big corporates.

"The new Acts also have a provision that any dispute will go to SDM court, but the unions want freedom for going to higher courts. The government has also agreed to discuss and consider this point with an open mind, as unions stressed a lot on this issue," Tomar said.

  1. Level playing field

The government has signalled its willingness to create a level playing field for trading inside and outside mandis. As per the new law, anyone with a PAN card or any document that may be notified by the Union government, can trade in an alternative market. This is opposed to traders in an APMC mandi, who are licensed, and whose licences can even be cancelled if they default on payments, and their bank guarantees encashed — which is not something that would exist for a trader who only requires an ID card.

The second change Tomar said the government will also ensure that all traders are registered for operating outside the APMC mandi system. “We wanted to make law simple. But if farmers feel that anyone can easily procure a PAN card today and there should be additional protection through registration of traders, the government can consider that as well,” the Minister added.

What farm unions have to say

Union leaders, however, said they want nothing but repealing of the contentious laws.

"The government wants amendments, but we do not want that. We told them that we want the laws to be repealed," a union leader said after attending the meeting.

A statement issued on behalf of the unions said the government offered to consider some amendments to the three Central Farm Acts, but the offer was rejected. "Farmers told the government that it had only two options — either repeal or use force on the protesting farmers to remove them."

Tomar said that the government will also be open to looking into farmers' concerns related to an ordinance on stubble burning and an electricity-related law. He said the Narendra Modi government is committed to continuing, improving and expanding the procurement process at MSP (Minimum Support Price. "There should not be any doubt in anyone's mind. Still, if farmers have any worries on that front, we would want to assure them that the new laws do not present any threat to the MSP system," he said.

With inputs from PTI

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