The past few years have witnessed a litany of contentious legislations introduced by the BJP government that not only fomented discord in the Parliament but also made the aggrieved citizenry take to the streets. Lately, the three farm Acts passed by the Parliament in the Monsoon Session of 2020 caused widespread disagreement, both inside and outside the Parliament. In this article, we discuss and analyse the contents of the three Acts, the urgency behind enacting them, their controversial loopholes and unnoticed and unaddressed merits through two contrasting approaches of interpretation, the Idealistic and the Realistic Approach, along with the political logic of their sudden repeal.
The Three Acts and the Need to Enact Them
The Parliament had passed three Acts namely The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020; and The Essential Commodities (Amendment) Act, 2020. The three Acts collectively aimed to incentivise inter-state and intra-state transactions for the farmers, ensure a particular quantity of produce for both buyers and sellers, and subsequently give certain powers to the Central Government to regulate the overall supply of certain food items under extraordinary circumstances (war, flood, etc.). The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 was the most controversial Act, as it enabled farmers to trade outside the territories of the Mandis regulated by the APMC Act. It also provided for electronic trading in the specified area and subsequently made a provision for corporate firms and registered societies (having a PAN number) to trade with the farmers. Moreover, it also proscribed the levy of any market fee or cess in such trade that is undertaken outside the ambit of the APMC. Section 14 of the Act gave an overriding effect to the provisions of the Central Act over any State APMC Act or any other legal provision of any Act for the time being in force. Additionally, it vested the Central Government with the power to frame and regulate the rules for carrying out the provisions.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, aimed to provide for contract farming where the farmers can sign an agreement with a contractor prior to the rearing of the produce. It also provided for a guarantee price to be given to farmers when the market prices are subjected to fluctuations. The conciliation and dispute resolution mechanisms that can be resorted to in case of any conflict between the farmers and contractors were also defined under this Act. However, Civil Courts were barred jurisdiction, and all disputes were perforce to be resolved under the dispute resolution mechanism ascertained under the provisions. The Essential Commodities (Amendment) Act, 2020, aimed to constrain the restrictions on which the Government can impose stock limits on agricultural produce. It commissioned price rise to be the sole determining factor of any stock limit that is to be imposed on the agricultural produce. It also authorised the Central Government to regulate the supply of certain food materials on account of extraordinary circumstances.
Before analysing the literature of the three Acts, it is imperative to understand the need and legislative intent behind the introduction of the same. The Agricultural Produce Market Committee (APMC) was established by the government in 2003 to ensure that farmers are safeguarded from any form of exploitation from the large and oppressive retailers. The government regulated APMC was thus authorised to conduct auctioning and scanning of products and conclusively ascertain the prices of the produce that would further be quoted to the customers. Moreover, it would also provide the farmers with a Minimum Support Price (MSP) irrespective of whether the produce has been sold or not.
With time, however, there started to appear some evident loopholes of the APMC mechanism that were tainting the legislative intent with which it was enacted. The rise of the middlemen under the APMC soon led to the creation of the agricultural mafia and the APMC became a hotbed of corruption, politics, and monopoly of traders and middlemen. There was an unrivaled and unsurmountable monopoly formed under the APMC, and the traditional intermediaries (Arhatiyas) had become extremely rent-seeking. The APMC traders were also notorious for setting high prices, unnecessary hoarding, cartelisation, bid ridding, causing unnecessary inflation, and grossly and maliciously misleading the farmers. To add salt to the wound, a substantial number of farmers, have, till today, found it difficult to access the government and APMC facilities due to lack of awareness, long distances, and high transportation costs. So much so, many farmers are still unaware of the concept of MSPs.
With a view to supposedly countering the above-mentioned defects of the APMC system, the government felt that there was a pressing need to revamp the agricultural trading and transaction regime to make it more transparent, easily accessible, and subsequently establish a system that is designed for increased efficiency and broader marketing. Accordingly, the government introduced the three Acts that aimed to fill the gaps created by the APMC system.
The Realistic View
Even though the three Acts were introduced with the intent to make up for the shortcomings of the existing APMC model and redress the agricultural trading mechanism, the numerous drawbacks of the new mechanism to be adopted under the three Acts raised serious doubts on its broad implementation. While the Idealistic view perceived the outcome of the enactment as favourable, the Realistic view maintains that the advantages were shorttermed.
The APMC model forms the most controversial bone of contention. As discus-sed above, The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, incentivised the trading of the produce outside the bounds of the long-standing Mandis. This specifically meant that the farmers would have had an additional marketing channel to sell their products if they could get a higher price for it. However, the Mandi system under the APMC, and the Mandi system in general, has been flourishing for years, especially in the states of Punjab and Haryana (which formed the epicentre of the muscular protests against the Acts). The passing of the Acts gave a green light to private corporates who could quote such prices that would have, tentatively, attracted the awe of the farmers who would shift to trading with the private corporates. This would have subsequently led to a slow yet tragic collapse of the Mandis. In the long run, after the APMC succumbed, the private corporates would have increased their stranglehold on the agricultural sector and caused widespread exploitation by quoting prices according to their whims and fancies.
The farmers also contended that the Acts pay nothing but mere lip service to the MSPs. The Acts would give a free pass to private companies to regulate the MSP and operate solely on the premise of profit maximisation.
Another cause for concern was the lack of trust that the farmers had in their new traders. Under the current APMC model, every trader or Arhatiya has to obtain a license to trade in a Mandi. However, Section 2(n) of The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, authorised any person with a PAN Card to trade with the farmers. Evidently, with nothing more than just a PAN Card as a source of identity, the new traders would have lacked authenticity and credibility. Another obstacle to the smooth implementation of the Farm Acts was the scepticism towards the legal dispute system prescribed under Section 8 of the Act. Farmers contended that they faced a disadvantage on the legal front too. First and foremost, it is an indisputable fact that legal proceedings are extremely expensive and time-consuming. Not only would the arbitration proceedings financially drain the farmers but would also have a detrimental effect on their overall produce, as a substantial amount of money, time, and effort would be consumed by transportation and regular proceedings. Even if the farmers mustered the courage and resources to resort to arbitration, it would be difficult for them to stand against the manipulative and corrupt private giants. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, creates a framework for contract farming between the buyers and sellers prior to the rearing of the farm produce. Even though modern farmers are far more educated and vigilant than they were a decade ago, expecting them to always understand and acknowledge the subtle intricacies and nuances of the technically and shrewdly written contracts would still be unlikely. Unequivocally, the fear of an unfavourable legal battle, along with the financial and mental drain alone, would be enough to discourage the farmers from resorting to legal dispute resolution. The legal experts have also expressed their discontent as they conceive that the Central Government has little or no power to frame or regulate laws concerning the agricultural sector.
The Constitution gives exclusive power to the State Legislatures to frame or amend laws for the agricultural sector, and in no capacity does it empower the Central Government to interfere. Even the Concurrent List, on which the Centre has decisive superiority, includes all contracts, including partnership, agency, contracts of carriage, and other special forms of contracts, except those relating to agricultural land. Thus, the interference of the Centre with respect to matters of agriculture, which is solely a State subject, was erroneous and ultra vires.
The Idealistic View
The Idealistic view propounds an opposite yet nevertheless pragmatic interpretation of the three Acts. Notwithstanding the conspicuous loopholes of the Acts (as outlined in the Realistic view), the faint possibility of the Acts serving the legislative intent cannot be completely disregarded.
First and foremost, it liberated the farmers from the unyielding clutches of the APMC model. Consequently, this gave the farmers an incentive to exercise their freedom of choice – interacting and trading with the private players (big and small) outside the territorial boundaries of the APMC. This could have also opened new avenues for price discovery and bargain for them.
Moreover, a close reading of the provisions of the three Acts would demonstrate that the idea that the MSP was recommended to be choked off was a misinterpretation. The literature of the three Acts did not suggest the complete riddance of the MSP.
Technically, the Acts place the APMC on the same stature as its other counterparts, thereby incentivising competition. The possibility of the APMC flourishing under the new Acts by taking advantage of an already well-established customer base may be far-fetched but should not be discarded. The threat of business coming to a halt existed only for those middlemen who have for so long deceived the farmers due to their lack of awareness with respect to price discovery.
The muscle of resistance shown by the Realists, especially the Opposition, was vigorously countered by the Idealists who were advocating the merits of the Acts. However, the dubious, controversial, and unaddressed provisions of the Acts, accompanied by their ramming through the Parliament, had taken a toll on the BJP – despite having a (potentially) philanthropic intent behind introducing the Acts. It lost its long-standing ally, Shiromani Akali Dal, which was aligned to the Realistic View and formed the fulcrum of the parties opposing the Acts. The passing of the Acts in the Rajya Sabha caused havoc and led to most of the Rajya Sabha leaders walking out of the Sabha and protesting in dissent. On the contrary, the Prime Minister, who was a preacher of the Idealistic interpretation, came on record and said that contentions against the Act were misleading and smooth implementation of the Acts would have been, in most probability, beneficial for the farmers. However, the putative benefits can, in no capacity, override the underlying and unaddressed defects of the Act.
By introducing the Acts during the ongoing pandemic, the government was under a flawed assumption that it would witness minimal retaliation from the farmers. However, amidst the tug-o-war between the Idealists and Realists, the world witnessed one of its largest protests in history, a retaliation so powerful and consistent that it forced the drafters to repeal the Acts they were guarding for over a year. Acts of democratic retaliation and confrontation, both large and small, ranging from mass protests to underground literature to writ petitions filed before the Courts, fed into the narrative of the illegitimacy of these Acts and eventually contributed to their relegation. It is needless to say that the muscle of the protests against the farm laws faced by the BJP-led government finds shreds of commonality, in terms of obduracy and solidarity, with the protests many of its current leaders were a part of back in the Emergency. While the relegation of the Acts may seem like a glorious victory to the farmers, as it should rightly be, the behaviour of the government throughout the protesting period does not even remotely, far less definitely and unerringly, manifest the victory of the democratic and constitutional principles the country stands for. This can be justified on multiple grounds. Firstly, the Acts were repealed with the same haste with which they were rammed through Parliament, without deliberation or discusson. This signifies not only a mockery of the legislative process but also of the judiciary which was actively studying the application of the Acts. To add to the bargain, the special committee formulated by the Apex Court to study the application of the farm laws had already submitted its report on the same to the Court in a sealed cover. At this juncture, one cannot help but wonder how the report would have actually assessed the merit of the farm laws, which, unfortunately, is a chapter closed and forgotten now.
Secondly, there was a blatant and remorseless subjugation and compromise of the Constitutional norms, more precisely the freedom of speech and expression, freedom to form unions and assemble peacefully without arms as enshrined under Article 19(1)(a), Article 19(1)(b) and Article 19(1) (c) of the Indian Constitution respectively. With multiple instances of police-initiated repression, violence, and battering unleashed on the protestors, there was an evident transgression of fundamental rights and otherisation of the Sikh community. There was also an indiscriminate use of the Unlawful Activities (Prevention) Act, 1967, which was used as a tool to target, suppress and arrest democratic voices raised agains the Acts. Thirdly, and most importantly, despite the government’s effort to present the repeal as a bona fide apology and its innocent failure to bring a segment of farmers on board, it would be a flaw to see it in a standalone manner and disassociate the political logic of the repealing of the Acts and the genius of its timing from the upcoming elections in Uttar Pradesh. A cocktail of skyrocketing fuel prices, shoddy management of the Covid crisis, and the unresolved farmer disputes had the potential of having a detrimental impact on the election outcome, most prominently in western Uttar Pradesh.
The protests against the Farm Acts, which will go down in the annals of history as one of the most systematic and consistent protests of the world, demonstrated that demagogy can be subjugated by democratic means and adherence to the Constitution. Setting a global example, the protests convinced the people that totalitarianism has no place in India and subsequently reaffirmed the power of civil disobedience and the legitimacy of peaceful protests. While the government’s tilt towards unchecked power and totalitarianism seems to snowball with every passing day, the protests against the Farm Acts will always be considered to play a pivotal role in postponing, if not saving, Indian democracy’s slow and tragic death at the hands of the current government.
Saahas Arora is a law student at ILS Law College. He is founder and editor of The Constitutional Corridors. This article was featured in Issue 29.