The recent repeal of the three controversial farm laws — The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020, and The Essential Commodities (Amendment) Act, 2020 — by the Central government may not have completely derailed the government’s plans for reforms in agricultural production, procurement and sales ecosystem.
While the reforms proposed through two of the repealed laws — the establishment of private agriculture produce markets that are not under the control of Agriculture Produce Marketing Committees (APMCs) and contract farming framework — were already work in progress before the enactment of these laws, the move to decontrol agriculture stocking and movement was a non-starter irrespective of the amendment made to the Essential Commodities Act.
According to the agriculture ministry, 21 states and Union Territories had tweaked their existing farm laws or adopted the salient features of the Centre’s model law, ‘The State/ UT Agricultural Produce and Livestock Marketing ( Promotion & Facilitation) Act, 2017’, much before the enactment of the now repealed laws. Similarly, the model contract farming law readied by the Centre, ‘The State/UT Agricultural Produce &Livestock Contract Farming and Services (Promotion & Facilitation) Act, 2018, had seen 19 states incorporating “contract farming” in their APMC Acts itself. The third law, which tried to do away with stock limits and restrict movement of agricultural produce considered as ‘essential commodities’, had made no difference as government decisions continued to depend upon demand and supply dynamics even after The Essential Commodities (Amendment) Act, 2020, was passed by Parliament.
In a presentation made by the agriculture ministry at the conference of state agricultural ministers on July 8, 2019, the government had said that the objective of the APLM Act 2017 was to develop State/UT level unified market, declare warehouses and cold storages as “deemed markets”, provide a level-playing field for public and private sector agriculture produce markets, integrate farm gate to bulk purchasers, processors, exporters, organised retailers, consumers, etc., and rationalise market fee. The other objectives were promotion of specialised markets, e-trade, unified licences for inter-state trade, provision for deregulation of fruits & vegetables, etc. In a broad sense, The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, was an improvement upon the APLM Act 2017. Similarly, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020, was a simplified and improved version of the Contract Farming Act. The 2019 presentation of the agriculture ministry had stated that Tamil Nadu had passed a separate Contract Farming and Services Act on the lines of the Model Act in 2019 itself while Punjab had one since 2013. It also said that a total of 19 states have provisioned contract farming in APMC Acts itself.
The Central government’s national agriculture e-market (e-NAM) portal says that as on November 30, 2021 (by the time the three farm laws got repealed), 1,000 agriculture markets or mandis had registered on e-NAM with over two lakh registered traders and about 90,000 unified licences issued by states.
Meanwhile, the repealing of the model laws will result in some pressure on state governments that had amended their respective laws to accommodate the latest prescriptions of the Central government. For instance, governments of Gujarat, Himachal Pradesh, Karnataka and Madhya Pradesh had brought in ordinances that mirrored the central ordinances that enforced the three farm laws early last year. On the other hand, opposition-ruled States like Rajasthan, Chhattisgarh and Punjab had passed laws that were against the spirit of the Centre’s model farm laws.
While the repealing of the three farm laws must have impacted the medium- and long-term plans of potential investors in the agri-business sector, at an operational level, it has made little difference at the moment.