Modi govt's farm sector reforms: Congress opposes now but had such plans when in power

The Modi government and the Opposition, led by Congress, are engaged in a bitter tug of war over three key bills that aim to reform the agricultural sector that is plagued with many inefficiencies in its marketing, pricing, and distribution system. The proposed laws have led to heated exchanges both in and outside Parliament and triggered protests in key farming states like Punjab, Haryana, and Uttar Pradesh.

Following the passage of two such bills in Lok Sabha on Thursday, Union Minister and Akali Dal leader Harsimrat Kaur Badal resigned in protest which the Congress called 'theatrics'.

Now, it is important to understand the politics behind the row. Let's begin:

This week, three bills were introduced in the Lok Sabha by Union Agriculture Minister Narendra Singh Tomar to replace ordinances passed in June. The bills are:

1. The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 to promote barrier-free inter-state and intra-state trade in agriculture produce;
2. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 to engage with processors, aggregators, wholesalers, large retailers, exporters;
3. The Essential Commodities (Amendment) Bill, 2020 to liberalize regulatory environment for farmers

Congress and other like-minded parties have been vehemently opposing long-pending reforms. However, Congress’ actions now are totally opposite of their actions in the past regarding such reform.

Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020

This bill seeks to provide for the creation of an ecosystem where farmers and traders enjoy the freedom of choice relating to the sale and purchase of farmers' produce which facilitates remunerative prices through competitive alternative trading channels. This will 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. It also aims to provide a facilitative framework for electronic trading and for matters connected therewith or incidental thereto.

Actions of Congress in the past

Congress in its manifesto 2019 in sub-para 11 of para 7 mentioned that “Congress will repeal the Agricultural Produce Market Committee’s Act and make the trade in agriculture produce-including export and inter-state trade-free from all restrictions”.

As per media reports, Congress just before the 2014 Lok Sabha elections publicly announced that Congress-ruled states should de-notify the fruits and vegetables from the APMC Act. In pursuance, Congress-ruled states of Karnataka, Assam, Himachal Pradesh, Meghalaya, and Haryana de-notified the fruits and vegetables.

The Congress-led UPA government after coming into power in 2004 started persuasion with the states to adopt the Model APMC Act 2003 to liberalize state agricultural marketing laws. The UPA also formulated the Model APMC Rules 2007 for the implementation of the Model APMC Act. The government constituted ‘Committee of State Ministers, In-charge of Agriculture Marketing to Promote Reforms’ under the chairmanship of Harshvardhan Patil, then Minister for Cooperation and Parliamentary Affairs, Govt. of Maharashtra. In its report in 2013, the committee proposed Agricultural Produce Inter-State Trade and Commerce (Development & Regulation), Bill for barrier-free markets.

READ | SAD Lambasts Punjab CM's 'double Standards' On Farm Bills, Cites Case Of Cong's Ally Sena

Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020

This bill 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.

Actions of Congress in the past

Contract farming has been in practice for many decades in India in various States. It provides a host of benefits for farmers including better marketing linkage, access to new technology, protection from market volatility as well as private investment in the supply chain and the overall agricultural sector including better quality products.

Contract farming has been recognized as a chief enabler in various reports of the Planning Commission and has been implemented by many states under the State APMC Acts. The 11th Five Year Plan, 2007–12, which was released during the tenure of the UPA government, mentions: 

“Several States have amended the Agricultural Produce Marketing Committee Acts to allow private markets to be set up in competition with the existing mandis... Contract farming, which is being encouraged by many States, also provides a mechanism for improving linkages between farmers and markets through the active involvement of the private sector, which can also serve as a supplier of key inputs and extension advice.”

Various states such as Andhra Pradesh, Assam, Chhattisgarh, Goa, Gujarat, Haryana (2007, INC), Himachal Pradesh, Jharkhand, Karnataka (2003, INC), Maharashtra (2006, INC-NCP), Madhya Pradesh (2003, INC), Mizoram, Nagaland, Odisha (2006, BJD), Rajasthan, Sikkim, Telangana, Tripura, and Uttarakhand have made provisions for contract farming under the state APMC Act. Three states including Punjab (2013, SAD), Tamil Nadu (2019, AIADMK), Odisha (2020, BJD) have passed separate Contract Farming Acts.

READ | Kejriwal Urges United Front Against Farm Bills In RS, Slams Opposition's 'walkout Drama'

Essential Commodities (Amendment) Bill, 2020

This bill seeks to remove commodities like cereals, pulses, oilseeds, edible oils, onion, and potatoes from the list of essential commodities. This will remove fears of private investors of excessive regulatory interference in their business operations. The freedom to produce, hold, move, distribute, and supply will lead to harnessing of economies of scale and attract private sector/foreign direct investment into the agriculture sector. It has been provided in the Amendment, that in situations such as war, famine, extraordinary price rise, and natural calamity, such agricultural foodstuff can be regulated.

Actions of Congress in the past

In the 2019 Manifesto, Congress promised to replace the Essential Commodities Act, 1955 by an enabling law that can be invoked only in case of emergencies.

In the above-cited 2013 report, the UPA era Committee said: “…Essential Commodities Act and plethora of Orders promulgated under this Act by the Centre and States prevented development of free and competitive marketing system in the country.”

The Planning Commission in a 2011 report also mentioned about the reduction of the list of commodities from the purview of Essential Commodities Act and recommended for the imposition of trade and marketing restrictions only during the emergency.