New Delhi: The Congress is hypocritical in its opposition to the pro-farmer bills introduced by the Modi government as it also wanted barrier-free trade of agriculture produce when in power at the Centre, sources close to the government said.
Sources say that the actions of the Congress in the past demonstrate that when in power it was working in the same direction and while in opposition now, it is opposing these reforms.
“It is evident that Congress also wanted barrier-free trade of agriculture produce. Thus, Congress is hypocritical in its opposition to the pro-farmer bills introduced by the Modi government,” sources said.
Congress and other like-minded parties have been vehemently opposing the pro-farmer reforms inside and outside Parliament. Sources say the Congress’ actions now are totally opposite to their actions in the past regarding such reform.
Sources say that in different states, the arrangement of contract farming was encouraged according to the local requirement at different time periods. It was not limited to any particular party, different political parties adopted it during their tenure. “Why are the same parties which were in power in the respective states are now opposing the reforms brought by Central government?”, they asked.
Various states such as Andhra Pradesh, Assam, Chhattisgarh, Goa, Gujarat, Haryana (2007, INC), Himachal Pradesh, Jharkhand, Karnataka (2003, INC), Maharashtra (2006, INC-NCP), Madhya Pradesh (2003, INC), Mizoram, Nagaland, Odisha (2006, BJD), Rajasthan, Sikkim, Telangana, Tripura and Uttarakhand have made provisions for contract farming under the state APMC Act. Three states including Punjab (2013, SAD), Tamil Nadu (2019, AIADMK), Odisha (2020, BJD) have passed separate Contract Farming Acts.
While giving historic boost to Rural India, three ordinances were promulgated on 5 June 2020 for benefit of farmers and to transform the agriculture sector.
These ordinances were:
The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 to promote barrier-free inter-state and intra-state trade in agriculture produce;
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 to engage with processors, aggregators, wholesalers, large retailers, exporters; and
Amendment to the Essential Commodities Act to liberalize regulatory environment for farmers.
Three respective bills were introduced on September 14 in the Lok Sabha to replace these ordinances – The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020; The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020; The Essential Commodities (Amendment) Bill, 2020.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 seeks to provide for the creation of an ecosystem where the farmers and traders enjoy the freedom of choice relating to sale and purchase of farmers’ produce which facilitates remunerative prices through competitive alternative trading channels to promote efficient, transparent and barrier-free inter-State and intra-State trade and commerce of farmers’ produce outside physical premises of markets or deemed markets notified under various State agricultural produce market legislations; to provide a facilitative framework for electronic trading and for matters connected therewith or incidental thereto.
The contrast is now being drawn with the Congress actions in the past. Congress in its manifesto 2019 in sub para 11 of para 7 mentioned that “Congress will repeal the Agricultural Produce Market Committee’s Act and make trade in agriculture produce-including export and inter-state trade-free from all restrictions”.
As per reports, Congress just before 2014 Lok Sabha elections publicly announced that Congress ruled states should de-notify the fruits and vegetables from the APMC Act. In pursuance, Congress ruled states of Karnataka, Assam, Himachal Pradesh, Meghalya and Haryana de-notified the Fruits & Vegetables.
The UPA government led by Congress after coming into power in 2004 started persuasion with the states to adopt the Model APMC Act 2003 to liberalize the state agricultural marketing laws.
The UPA government also formulated the Model APMC Rules 2007 for implementation of Model APMC Act.
UPA constituted ‘Committee of State Ministers, In-charge of Agriculture Marketing to Promote Reforms’ under chairmanship of Harshvardhan Patil, then Minister for Cooperation and Parliamentary Affairs, Govt. of Maharashtra.
In its report in 2013 the committee proposed Agricultural Produce Inter-State Trade and Commerce (Development & Regulation), Bill for barrier free markets.
The Planning Commission in its report of 2011 also mulled policy option of enacting a “Inter-State Agriculture Produce Trade and Commerce Regulation Act” under entry 42 (Inter-State Trade and Commerce) of the Union list.
The then Cabinet Secretary while considering the Note for COS suggested in April, 2011 that to promote Inter-State Trade and Commerce of agriculture produce across States/UTs through the instrument of Central Legislation. This time also there was the rule of UPA led by Congress.
In pursuance, DAC in consultation with Ministry of Law, Govt of India prepared the draft Bill titled as “Agricultural Produce Inter State Trade and Commerce (Development and Regulation) Bill 2012”. However, it was not pursued further.
Sources say that this shows that the Congress also wanted these reforms but is now opposing the Modi government.
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 seeks to provide for a national framework on farming agreements that protects and empowers farmers to engage with agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce at a mutually agreed remunerative price framework in a fair and transparent manner.
The context of the bill is that contract farming has been in practice for many decades in India in various States.
It provides a host of benefits for farmers including better marketing linkage, access to new technology, protection from market volatility as well as private investment in the supply chain and the overall agricultural sector including better quality products.
Contract farming has been recognized as a chief enabler in various reports of the Planning Commission and has been implemented by many states under the State APMC Acts. The 11th Five Year Plan, 2007–12, which was released during the tenure of the UPA government, mentions “Several States have amended the Agricultural Produce Marketing Committee Acts to allow private markets to be set up in competition with the existing mandis.”
“Contract farming, which is being encouraged by many States, also provides a mechanism for improving linkages between farmers and markets through the active involvement of the private sector, which can also serve as a supplier of key inputs and extension advice.”
The Planning Commission in its report of 2011 mentions that “There is a need to promote both private investment and alternative marketing channels to improving the marketing system of agricultural produce by way of direct marketing contract farming and setting up of markets in private and co-operative sectors, e-trading, etc”.
The Model APMC Act 2003 stipulates institutional arrangement for registration of sponsoring companies, recording of Contract Farming Agreement, indemnity for securing farmers’ land and lays down a time bound dispute resolution mechanism. Contract farming has been prevalent in various parts of the country for commercial crops like sugarcane, cotton, tea and coffee, etc. There is a need to promote Contract Farming in high value crops with single registration at state-level.
While discussing ‘Issues in Expanding Agricultural Marketing and Processing’, the 12th Five Year Plan (2012-17) prepared by Planning Commission during UPA years states “The introduction of the Model Act in 2003 was directed towards allowing private market yards, direct buying and selling, and also to promote and regulate contract farming in high-value agriculture with a view to boost private sector investment in developing new regularised markets, logistics and warehouse receipt systems, and in infrastructure (such as cold storage facilities).”
“This is particularly relevant for the high-value segment that is currently hostage to high post-harvest losses and weak farm-firm linkages. While many States have moved towards adoption of the Model Act, actual progress has been limited. Often the permissions given are subject to unacceptable restrictions which make them ineffective. Vested interests in maintaining the existing mandi system intact are very strong.”
It is pointed out that PepsiCo started working with farmers in Punjab in 1980s for pulping tomatoes and with orange farmers for making Tropicana juice. Incidentally, from 1987-92, Punjab was under President’s Rule i.e. it was run by Central government. It was mostly either Congress party in power in Central government or there were Governments led by V. P. Singh and Chandra Shekhar. From 1992 till 1997, again the Congress party was in power in Punjab.
PepsiCo tied up with the farmers for getting potatoes for their Frito Lay potato crisps in 2001 in collaboration with the State government.
Subsequently, they initiated Contract Farming in several states including West Bengal and Maharashtra.
Many successful contract farming projects have been supported by State governments across the country for more than the last 2 decades.
The Haryana State Government had started the contract farming scheme in 2007 under the leadership of INC Chief Minister Bhupendra Singh Hooda. The CM handed over the first registration certificate to SAB Miller India, which had launched the scheme in three districts of Haryana for barley.
Similarly, in 2003 PepsiCo initiated procurement of potatoes through contract farming in West Bengal over 600 ha. land. By 2011 there was almost four fold increase in the area.
There are similar examples of onions in Maharashtra, cucumber in Karnataka, Barley in Rajasthan etc.
The Essential Commodities (Amendment) Bill, 2020 Bill seeks to remove commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities.
This will remove fears of private investors of excessive regulatory interference in their business operations.
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.
As the bill replaces the ordinance to amend the Essential Commodities Act, it is important to note that ordinance provided for safeguarding of interests of consumers. It has been provided in the Amendment, that in situations such as war, famine, extraordinary price rise and natural calamity, such agricultural foodstuff can be regulated.
Similarly, the actions of Congress in the past show that in 2019 Lok Sabha Elections Manifesto, Congress promised to replace the Essential Commodities Act, 1955 by an enabling law that can be invoked only in case of emergencies.
The Mid Term Appraisal of Eleventh Five Year Plan during UPA years states – “Improving marketing conditions and encouraging private sector participation require reforming the APMC Act and abolishing the Essential Commodities Act (ECA).
“Cleaning up these archaic provisions can trigger private sector investment in developing regularized markets, logistics and warehouse receipt systems, futures markets, and in infrastructure (such as cold storage, grades and standards, and quality certification) for large domestic markets as well as imports and exports.”
UPA constituted ‘Committee of State Ministers, In-charge of Agriculture Marketing to Promote Reforms’ under chairmanship of Harshvardhan Patil, then Minister for Cooperation and Parliamentary Affairs, Govt. of Maharashtra. In its report in 2013 stated – “…Essential Commodities Act and plethora of Orders promulgated under this Act by the Centre and States prevented development of free and competitive marketing system in the country.”
The Planning Commission in its report of 2011 also mentioned about reduction of list of commodities from the purview of Essential Commodities Act and recommended for imposition of trade and marketing restrictions only during the emergency.
