Misleading: The new farm bills give farmers the freedom to sell anywhere in India or abroad, to private or government entities, or to big or small buyers.

By: Ranjini K
February 19 2021

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Farmers could always sell their crops outside APMC mandis. Under the new laws, even if they can sell anywhere, they are not protected by MSP. The Indian parliament passed three farm bills on September 27, 2020. These bills are the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, and the Essential Commodities (Amendment) Bill. The Farmers Produce Trade and Commerce (Promotion and Facilitation) law permits intra-state and inter-state trade of farmers’ produce beyond the physical premises of Agricultural Produce Market Committee (APMC) market yards and other markets notified under state APMC Acts. In simpler words, the law will allow farmers to sell their produce outside APMC mandis. According to Down To Earth, this freedom of open market could help reduce the monopoly of APMC and result in improved price discovery. However, the same article states that, "Loosening the grip of APMCs, the government risks the possibility of farmers receiving prices below the minimum support price (MSP)." The article cited the example of Bihar, where the mandis were repealed in 2006, after which the agriculture growth declined. The law creates a sudden vacuum in the market by reducing the role of APMC, responsible for setting up prices of the crops. Moreover, the new laws do not speak about the alternate price-setting mechanism of agricultural products. Therefore, such laws can lead to greater exploitation of farmers' and harm them financially. Furthermore, economist Jean Dreze told the Economic Times that most of the agricultural trading at the moment takes place outside the mandis. Drèze also said that the new farm laws would not liberate farmers but leave them at the government's mercy. Since Nov. 26, 2020, farmers in India have been protesting against three bills passed in the parliament. So far, around eleven rounds of talks have taken place between the government and the farmer unions; however, they were inconclusive.