Farm Bill 2020 and Its Pros and Cons- All You Need to Know about

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Updated November 10, 2022

The farm bill is a package of enacted laws regarding the farm systems passed roughly once every five years with an objective to resolve problems of farmers and the farming systems or to reform the existing farm bill. It tremendously creates an impact on farming livelihoods. It is basically about how crops should be grown, what kinds of crops should be grown, where crops should be sold, and what price should be sold on, etc.

The farm bill is like a program that includes things like, crop insurance for farmers to provide security to farmers in case their crops get destroyed due to adverse weather, healthy food access for low-income families, provide training to farmers to increase the efficiency of farmland, support sustainable farming practices for sustainable development. In short, the farm bill sets the stage for our food and farm systems. So, it is very crucial to ensure that the bill going to be passed should be beneficial enough for farmers and consumers and an environment supportive. Because farm bill 2020 has come into effect on the 27th of September and it is important to know it’s both aspects.

The period of validity for the farm bill is 5 years after that it expires, therefore it is updated after every five years.  The last time it was updated in 2018 and its date of expiry was in 2023 but farm bill 2020 (farm reforms 2020) came into effect after two years only because it was an ordinance by the president of India. To be a Bill an Act, it needs to cover a long passage. First, it is proposed, then debated in both the houses to see if it requires any changes, then it needs to be passed by senates with the majority, and then it is signed into law by the President. Each farm bill has a unique title, and the current farm bill is called Farm reforms 2020.

The Indian farm reforms of 2020 (Farm bill 2020)

The Indian farm reforms of 2020 (farm bill 2020) refer to three agricultural bills passed by the Parliament of India on 27 September 2020 under the governance of the Bhartiya Janata Party (BJP). The bill is passed with a collective objective of providing farmers with multiple marketing channels and providing a legal framework for farmers to enter into pre-arranged contracts among other things. The bill includes three laws and those are the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act’, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, and the Essential Commodities (Amendment) Act, which came into effect following the approval of President Ram Nath Kovind.

The only development which took place after coming into effect of the bill is the protest against the act by farmers.  The protest picked up in September 2020, particularly in Punjab and Haryana, where farmers have been at the forefront. So, it very important to know in details about all the Acts under the farm bill 2020

What are the different laws under Farm reform 2020 and their purpose?

Farm bill 2020 includes three acts these are listed below with illustration.

Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020

It aims to expand the scope of trade areas of farmers’ produce from select areas to “any place of production, collection, aggregation”.

It allows electronic trading and e-commerce of scheduled farmers’ produce.

It prevents state governments from levying any market fee, cess, or levy on farmers, traders, and electronic trading platforms for the trade of farmers’ produce conducted in an ‘outside trade area’.

Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020

It provides a legal framework for farmers to enter into pre-arranged contracts with buyers including mention of pricing.

It defines a dispute resolution mechanism.

Essential Commodities (Amendment) Act, 2020

It removes foodstuff such as cereals, pulses, potato, onions, edible oilseeds, and oils, from the list of essential commodities, removing stockholding limits on such items except under “extraordinary circumstances”

It requires that imposition of any stock limit on agricultural produce be based on price rise.

Pros and Cons of Farm bill 2020.

Everyone has their own perspective and a different parameter to judge anything. Nothing in this world can full fill everyone’s expectations. Similarly, a bill or Act has its own pros and cons when it tested on different parameters. So, today we will talk about the pros and cons of farm reform 2020.

Pros of the Bill  

It has created a freer and more compatible system for the farmers.

It has created an additional marketing channel for the farmers as it allows them to sell the farmer’s produce in both mandis and outside the physical territory of the mandis.

It facilitates farmers with one more option that the farmers can sell their products anywhere in the world but via the e- NAM system, there is not any territory fixed for them to trade.

Earlier, there were stock holding limits which cause losses for farmers as the traders were scared of being punished, so they bought the crops in a certain quantity. But with the amendment to the Essential Commodities Act which is one of the three bills under protest removes the scare or fear of the farmers that traders who buy from farmers would be punished for holding stocks.

The bills ensure that the farmer or the producer should be given equal attention as production is and the farmer would get a demarcated price for crops so that farming can be sustained.

It allows farmers to practice contract farming. It is a legal framework of framing where pre-arranged contracts are signed between farmers and traders including mention of pricing.

Cons of the Bill

The bill has been passed without taking into consideration the concern of farmers whom the bills are made for.

Removing stock holding limits can’t be beneficial for farmers because no farmers want to stock their produce. It can only be beneficial for big traders because it may lead to more imports at a cheaper price and that will cause losses for domestic farmers.

One of the three Acts of the farm reform 2020, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) bill does not give any legal support to MSP. And everybody knows that the farmers have nothing to do with the legal system but everything to do with the MSP (Minimum support price).

The government is trying to assure the farmers that there is still a provision of MSP in the new bill but there is no such low mentioned which mandates the implementation of MSP.

The new bills are placing farmers and traders at the mercy of government officials, rather than of the courts. Which is bad for farmers to some extent, let’s see how, if the officials are corrupt, they may be bribed by traders and decision would be taken in the favor of traders.

Contract farming may turn the farmers into slaves.

Way Forward

India is an agricultural prominent country. A sizeable part of our GDP country is contributed by the agricultural sector. So, it very crucial for the government to improve the condition of farmers.  If any government thinks of the welfare of farmers then it should work on improving the framework of farm system. It means the government should make a law that mandates the implementation of MSP. It should increase its stock holding capacity so that no farmers would have to sell theirs produces below MSP. It should work on providing better irrigation facilities to the farmers. The government should work on creating a framework to propagate weather information to the farmers so that the farmers could yield the crops accordingly. There are more such things the government should work on but for now, these are the basic requirement of farmers to keep farming alive.

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