This post is written by Vismitha S, studying BBA LL.B at SASTRA University.


The Parliament recently passed three ‘Farm’ Bills despite strong opposition which led to massive protests across the country. The bills make it easier for farmers to sell agricultural products directly to private buyers and enter into a contract with private companies. The government hopes that private sector investment will boost growth.

What are the Bills passed?

  • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 allows farmers to sell their produce outside the state-run Agricultural Produce Market Committee markets or Mandis. There will be no compulsion to sell in APMC mandi of their own specific area. The government is bringing this forward as part of “one nation, one market”.

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

Under this ordinance, the farmer usually enters into a contract to sell the crops on the basis of the conditions set out in his crop standards. It is suspected that this could reduce the risk to the farmer. Farmers may sign sales contracts with processors, aggregate wholesalers, large retailers, and exporters at mutually accepted crop prices. 

  • Amendment in Essential Commodities Act, 1955

Moneylenders and traders used to buy crops earlier at fair rates, store them in large numbers, and engage in black marketing. In 1955, the government enacted the Essential Commodities Act to regulate black marketing. However, as part of the new amendment, agricultural products such as cereals, pulses, oilseeds, edible oils, and potatoes have now been removed.

Why are the farmers protesting against it?

Farmers fear that corporations would have the upper hand in setting costs and settling conflicts in the courts. They’re not going to want to work with small farmers. They claim that the new legislation would ultimately end MSP funding, although the government says MSP-based procurement would continue. These farmers are worried about the loss of their guaranteed income.  According to them law control, free marketing, storage, import-export, is not in their interest.

Critics argue that the freedom to store food crops would mean that corporations will beat down crop prices, harming farmers. Farmers worry that the new conciliation scheme will be misused against them. 

They argue that the ordinance does not enable farmers to appear before a civil court. There is also a great deal of concern about the possibility of weakened APMCs, considering that, if mainstream traders are displaced, farmers would have to deal with large companies – a circumstance that would reduce the bargaining power of the farmer. 

How do these Bills benefit the farmers?

The Government enacted these Amendments and Bills with a vision of having an ‘open market’ as in the United States of America. As per the new laws, farmers can choose their market to sell. They need not pay any agent and can sell it in any place and in any state they prefer. Don’t have to pay any levy on the sale of produce, nor bear any transportation costs. The new law deals with inter-state sale of agricultural produce which helps deal withthe supply chain in states.

The farmers will have an equal say in the selling price. They can withdraw from the contract without any charges but the corporate buyer will have to pay damages for any breach of the terms of the contract. The payment to the farmers will be made within 3 days of such a contract, thereby ensuring payment security. 

Union Agriculture Minister Narendra Singh Tomar wrote a letter to Sukhbir Singh Badal about the Farmer Produce Trade and Commerce (Promotion and Facilitation) Ordinance, saying that it will only allow buying and selling of crops outside the area of the APMC mandi. Now, the farmers will have the option to sell their crops wherever they want, stated Tomar. This will also mean that APMC will also get the competition to improve its efficiency, according to Tomar. 


The open market policy in the agricultural sector has failed miserably in the US. As of today, the open market in the US has been going on for the last six to seven decades. Western countries are now facing a food crisis. But the need for change in the agricultural sector is long due. The attempt to change will involve corporates who will have ensure good amenities and storage. With the involvement and investment of the corporates in the agricultural sector, the problems of individual farmers can be focused and solved. 

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