Barring MSP, 3 key provisions of farm law

#GS2 #GOVERNANCE #POLITY

These sections represent the heart of the APMC bypass legislation. Their amendment tantamounts to rollback.

  • If the Union Agriculture Minister statements are any indication, the Narendra Modi government could amend three major provisions in the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act. 
  • These provisions actually represent the heart of the most contested legislation passed in Parliament session.
  • The first provision relates to Section 6, which exempts transactions done outside the physical premises of APMC (agricultural produce market committee) mandis from any "market fee or cess or levy" imposed by state governments. 
  • Farm unions claim it leads to an unlevel playing field between the APMC mandis and private collection centres or markets created under the new Act.
  • All purchases of paddy and wheat undertaken through government-regulated mandis in Punjab now attract a 3 per cent APMC market fee and a 3 per cent rural development cess. In Haryana, the same levies amount to 2 per cent each. 
  • Since there will be no taxes "under any State APMC Act or any other State law" in the alternative markets (“trade areas”), it can potentially lead to a diversion of trade from the existing mandis.
  • The government would examine ways to bring about “samyata” (level playing field) between the two markets. 
  • To exempt the new trade areas from the market fee (justifiable, as the transactions are outside the APMC mandi boundaries), but not the rural development cess. 
  • The latter, being imposed by the state government rather than the APMCs, can be imposed on the private collections centres and markets as well.
  • The second amendment to the Act could be to Section 15. Under it, disputes arising out of transactions in the alternative markets cannot be entertained in regular civil courts
  • Instead, these have to be compulsorily referred to conciliation boards and appellate authorities appointed by the local sub-divisional magistrates (SDM) and district collectors concerned. 
  • Their orders would have the “force of the decree of a civil court”. Section 15 states that "no civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter, the cognizance of which can be taken and disposed of" by these authorities. 
  • Farm unions have interpreted the bar of jurisdiction of civil courts as denial of justice. The SDMs and district collectors aren’t independent like regular courts. 
  • Being part of the government system, they are more likely to take the side of big corporate buyers, they allege.
  • Farm unions have interpreted the bar of jurisdiction of civil courts as denial of justice. 
  • The SDMs and district collectors aren’t independent like regular courts. Being part of the government system, they are more likely to take the side of big corporate buyers, they allege.
  • A third amendment could possibly be to Section 4, which requires any trader buying or selling in an alternative market to only have an income tax permanent account number (PAN) "or such other document as may be notified by the Central government". 
  • The unions say that this very limited requirement allows room for fly-by-night operators, who will not pay farmers. 
  • This is unlike the traders licensed by APMC mandis, who cannot afford to default. If farmers don't receive payment for their produce, they can now approach the APMC authorities, who may cancel the licences of such traders and even encash the bank guarantees submitted by them.
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