Row Over New Farmer Bills: All You Need To Know

Lone union minister from Shiromani Akali Dal (SAD) Harsimrat Kaur Badal’s resignation from the cabinet over the new Farm Bills 2020 has put the the spotlight on the fine print of the three Bills which were passed by voice vote in the Lok Sabha on Thursday.

“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,” Harsimrat Kaur said in a tweet.

She was protesting against three ordinances — The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020; The Farmers (Empowerment and Protection) Agreement; and The Essential Commodities (Amendment) Ordinance, 2020 promulgated by the ruling NDA government, which tabled Bills in Lok Sabha to replace them.

Let’s deep dive into the Bills and understand the apprehensions and fears and what the government has to say.

ALSO READ: President Kovind accepts Harsimrat Badal’s resignation from Union Council of Ministers



The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance is  aimed at opening up agricultural sale and marketing outside the notified Agricultural Produce Market Committee (APMC) markets for farmers, removing barriers to inter-state trade while providing a framework for electronic trading of agricultural produce.

This move prohibits state governments from collecting market fee, cess or levy for trade outside the APMC markets. Many fear that this is a sign of ending assured procurement of food grains at minimum support prices (MSP).


The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Ordinance relates to contract farming, providing a framework on trade agreements for the sale and purchase of farm produce.

The mutually agreed remunerative price framework spelt out in the legislation is cited as one that would protect and empower farmers.

The written farming agreement, entered into prior to the production or rearing of any farm produce, lists terms and conditions for supply, quality, grade, standards and price of farm produce and services.

It is now mandatory to mention the price to be paid for the purchase in the agreement. In case of price variations, the agreement must include a guaranteed price to be paid for such a produce besides a specified reference for any additional amount over and above the guaranteed price, including bonus or premium.


The Price Assurance Bill, while offering protection to farmers against price exploitation, does not prescribe the mechanism for price fixation. There is apprehension that free hand given to private corporate houses could lead to exploitation of farmers.


Punjab Chief Minister Amarinder Singh feels it would lead to exporters, processors and traders hoarding farm produce during harvest season, when prices are generally lower, and releasing it later when prices increase.

He said it could undermine food security since the states would have no information about the availability of stocks within the state.


Farmers fear they will no longer get paid at MSP, while commission agents are concerned that they will lose their commission.

A large part of Punjab’s the state’s economy rests on funds infused by central agencies such as Food Corporation of India (FCI). The apprehension now is that FCI will no longer be able to procure from the state mandis, which will impact cut down the earnings of commission agents.

The state coffers will also take about a six per cent hit as per experts due to changed procurement rules.


“Farm bills clearing Lok Sabha is a historic moment for the farmers in the country and the agricultural sector. These bills, in true sense, will eliminate bottlenecks and middlemen,” PM Modi tweeted in Hindi.

“A lot of people are trying to mislead the farmers. I want to assure my brothers that MSP and government purchase will continue. These bills, in true sense, are meant to empower the farmers,” he added.


Farmers happen to be the largest chunk of SAD’s vote bank. Political pundits say the party cannot afford to alienate its core constituency by endorsing the Bills since it will boil down to a question of survival.


Opposition leaders have vehemently opposed the Bill with the Trinamool Congress calling it draconian. Congress said this is an ‘act’ which will give freedom to corporates to “brutally exploit” farmers and snatch protection given by MSP and other mandi acts.

AAP too has spelt out its support to protesting farmers who now plan to have a three-day rail roko agitation in Punjab from September 24.

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