By Anjali Rajora


Several decades after independence, Indian agriculture has been exploited just like the colonial British – held captive for producing cheap food grains while living by cheap standards. This work is hereby an effort to look upon the challenges faced by farmers in 2020. This study focuses upon farmers bills passed recently and its impact on farmers and their family. The reason for protest by farmers in 2020 and how they are getting benefit with this bill is also explained in brief.

The Indian farmer finally had his 1947 moment in a real sense. Now he can sell his products wherever he wants, to whomever he wants, at any price. If he receives a higher price in the market, he is free to take it. The harsh scenery of the Agricultural Produce Market Committee i.e. APMC Act and Essential Commodities Act is minimized. Contract farming has now been launched nationally and will allow private venture to come in, with advanced equipment, technology,   better crop knowledge, better seeds, better logistics, better yields and a generous entry into national and international markets. . The Indian agricultural sector is now beginning to see the benefits of the economy. 

In just a few weeks, Prime Minister Narendra Modi has done what five prime ministers in 25 years failed to do. The reasons for this can fear due to political setbacks. Most importantly, all these reforms came in the first months of Prime Minister Modi’s second five-year term. This will give us plenty of time to utilize our well-established execution skills and see the results of these reforms reach the final milestone by 2024.


The Parliament of India has recently passed the popular Agriculture Bill 2020, which seeks to bring reforms in the farming sector. This sector contributes 18% to the country’s Gross domestic product (GDP). These bills are currently facing fierce opposition in both houses. Despite the existence of COVID-19, these bills have led to farmers’ protests in states like Haryana, Punjab and Madhya Pradesh.

  • Bills which were introduced in Agriculture Bill 2020

These are the three bills passed by the Parliament of India with the objective of reforming the agricultural sector by 2020: 

  • Promotion and Facilitation Bill, 2020
  • Essential Commodities Amendment Bill (ECA), 2020 
  • Empowerment and Protection Agreement of Price Assurance and Agriculture Services Bill‘, 2020
  • Promotion and Facilitation Bill under Farmers Bill, 2020

This law allows farmers to sell crops within the country under the notion of ‘one country – one market’. The ECA initially prevented farmers from selling anywhere other than markets approved by governments. These markets mandated by the government are called APMC. APMC is a government-run market that allows farmers to sell their products to traders or intermediaries. Then these intermediaries sell their products to consumers across the country.

APMC also provides price information to farmers. This is done via MSP (Minimum Support Price) is the lowest price that farmers can sell. MSPs are set up by the government. Farmers will not be able to get such prices at a very low rate. Unfortunately for farmers, the APMC price is higher than the MSP and is regulated by intermediary cartels. These cartels come to an agreement on a pre-determined price .

The new bill was also passed for following reasons

(i) States restrict the operation of APMC regulations to market yards;

(ii) Allow private parties to set up online trading platforms to trade in agricultural products.

(iii) Buyers and farmers have set up a dispute resolution mechanism which is regulated by Sub-Divisional Magistrate.

However, the new bill does not eliminate the APMC. If farmers are still interested, they can go ahead and sell their products at APMC and get MSP support. But while they are free to sell elsewhere and get a higher price, they are at risk of not having MSP.

  • The Essential Commodities (Amendment) Ordinance, 2020

Food Control: The Essential Commodities Act 1955 empowers the Central Government to allocate certain items (foodstuffs, petroleum products and fertilizers) as essential items. The formation, supplies, distribution, supply, delivery, trade and exchange of such important commodities may be regulated or prohibited by the Central Government. The ordinance stipulates that the Central Government may restrict the supply of certain food items, including pulses, cereals, onions, potatoes and edible oil only in exceptional circumstances. These include: (i) conflict, (ii) food crisis, (iii) unusual price rise and (iv) natural disaster of critical character.

Stock limit: The Ordinance stipulates that any stock limit on agricultural products should be based on inflation. A stock limit may be imposed if: (i) a 100% increase in the retail price of horticultural products; (ii) 50% increase in the retail price of perishable agricultural food items. This is higher than the previous twelve-month price or the average retail price of the last five years.

  • Empowerment and Protection Agreement of Price Declaration and Farm Services Bill, 2020

The bill guarantees farmers to enter into agreements with buyers. Cultivation is done on the basis of an agreement between the buyer and the producer. The biggest advantage that the farmer gets from this bill is the price guarantee before sowing his crops. 

The scope of contract farming is very large as Multinational Companies (MNC) regularly enters into agreements with farmers to ensure that certain types of produce are available. For example, McDonald’s uses only a certain type of potato for their fries and raises them accordingly. Similarly, other networks also require specific products and has to contact farmers directly rather than traders to make sure they are organic and innovative.


The disadvantage of this rule is that the person in question is a bargaining farmer. The bill will lead to the entry of private corporate who will further exploit farmers. It is also naive to think that farmers in Punjab who are acquainted with markets will go ahead and sell their crops to buyers in Karnataka. India still suffers from major connectivity issues, and transportation costs may be much higher than what APMC pays. Since the APMC has already been established, there are roads connecting most of the villages. This will make it easier for farmers to reach markets.

Punjab, Haryana and MP faced protests despite differing views across the country. This is because farmers in these states rely on MSP, a strong market system based on APMC. In fact, Bihar, Kerala and Manipur do not follow the APMC method at all. In India, state governments have the power to regulate agricultural markets and festivals. So, different states have different policies.

 In Haryana, the government buys 75% of wheat and rice at MSP rates, while in Punjab it is 85% higher. The Punjab government levies a 2.5 per cent fee and a 6 per cent market tax on the annual income of the APMC. This income from the farmers is returned to them in the form of electricity as subsidies. It plays a very important role in the voting dynamics, hence the unrest in these states.

While the entire economy is benefiting from these reforms, the “summer of 2020” certainly belongs to the Indian farmer, who ultimately knows what to live for and how to breathe freely. Some states have in the past convicted farmers of selling their productions anywhere other than these markets. It is an offense under this Act for farmers to sell their crops anywhere other than these markets. These APMCs were initially set up to protect farmers from big retailers and to keep prices low. Thus, farmer’s bill was actually imposed for benefit of farmers. Even though, diverse views led to certain conflicts.

By Anjali Rajora, Noida


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