Modi says MSP system will continue as LS passes two farm Bills
Narendra Modi File photo

Modi says MSP system will continue as LS passes two farm Bills

New Delhi, September 17, 2020

Prime Minister Narendra Modi today assured farmers that the system of minimum support price (MSP) for agricultural produce and government procurement would continue even as there was widespead criticism of three agriculture reform Bills and a Minister quit his Cabinet on the issue.

Reacting to the opposition to the Bills, two of which were passed by the Lok Sabha today, Modi said on Twitter this evening that many forces were engaged in creating confusion among farmers. One bill had been passed in the House earlier this week.

He said the passage of the Bills in the Lok Sabha was an important moment for farmers and the agriculture sector. He said the Bills would truly free farmers from middlemen and all obstacles.

"This agrarian reform will provide new opportunities for farmers to sell their produce, which will increase their profits. This will give our agriculture sector the benefit of modern technology, while empowering the farmers.

"There are many power trying to confuse the farmers. I assure my farmer brothers and sisters that the system of MSP and government procurement will continue. These bills will actually provide many more options to the farmers. They are truly empowering," he said.

The Prime Minister's remarks came after two of the Bills were passed in the Lok Sabha today. Shiromani Akali Dal (SAD) leader Harsimrat Kaur Badal, who held the portfolio of Food Processing Industries, resigned from the Cabinet in protest against the Bills. She was the lone representative of the Akali Dal in the Modi government. The SAD is one of the founding members of the BJP-led National Democratic Alliance (NDA).

In a tweet, she said: "I have resigned from the Union Cabinet in protest against anti-farmer ordinances and legislation. Proud to stand with farmers as their daughter and sister."

She called the agriculture-related Bills introduced in the Monsoon Session of Parliament "anti-farmer".

Earlier, replying to the discussion on the Bills, before they were passed by the Lok Sabha, Union Agriculture Minister Narendra Singh Tomar said the Modi government was fully committed to the welfare of the villages, the poor and the farmers.

He reassured the House emphatically that while farmers will now be freed from the restrictions of having to sell their produce at designated places only, the procurement at Minimum Support Price will continue and mandis established under State laws will also continue to operate.

The Union Agriculture Minister said that these legislations will bring about revolutionary transformation and transparency in the agriculture sector, electronic trading will increase, there will be accelerated agricultural growth as private investment will be attracted in building supply chains and agricultural infrastructure, new employment opportunities will be created and rural economy will get a boost, which will in turn help to strengthen the national economy.

The two Bills passed today are The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020, which were introduced in Lok Sabha on September 14 by Tomar to replace ordinances promulgated on June 5, 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.

According to the government, farmers in India suffered from various restrictions in marketing their produce. There were restrictions for farmers in selling agri-produce outside the notified APMC market yards. The farmers were also restricted to sell the produce only to registered licensees of the State Governments. Further, barriers existed in free flow of agriculture produce between various States owing to the prevalence of various APMC legislations enacted by the State Governments.

The government said the Bill would open more choices for the farmer, reduce marketing costs and help them in getting better prices. It will also help farmers of regions with surplus produce to get better prices and consumers of regions with shortages, lower prices. The Bill also proposes an electronic trading and transaction platform for ensuring a seamless trade electronically.

The farmers will not be charged any cess or levy for sale of their produce under this Act. Further there will be a separate dispute resolution mechanism for the farmers.

The Bill basically aims at creating additional trading opportunities outside the APMC market yards to help farmers get remunerative prices due to additional competition. This will supplement the existing MSP procurement system which is providing stable income to farmers.

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 and for matters connected therewith or incidental thereto.

According to the government, Indian agriculture is characterized by fragmentation due to small holding sizes and has certain weaknesses such as weather dependence, production uncertainties and market unpredictability. This makes agriculture risky and inefficient in respect of both input & output management.

The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field without any fear of exploitation. It will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs. It will reduce cost of marketing and improve income of farmers.

"This legislation will act as a catalyst to attract private sector investment for building supply chains for supply of Indian farm produce to national and global markets, and in agricultural infrastructure. Farmers will get access to technology and advice for high value agriculture and get ready market for such produce.

"Farmers will engage in direct marketing thereby eliminating intermediaries resulting in full realization of price. Farmers have been provided adequate protection. Sale, lease or mortgage of farmers’ land is totally prohibited and farmers’ land is also protected against any recovery. Effective dispute resolution mechanism has been provided for with clear time lines for redressal," an official press release said.


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