Agriculture Ordinance, 2020

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Agriculture Ordinance, 2020: Understanding the Implications and Analyzing the Key Issues, The pertaining research paper aims at providing clarity on novel agricultural laws, 2020. The paper elaborates and presents an unbiased view of the amendments, bought into action in future. The mere objective of this research is to impart the people with true explanation and significance of the laws. It will also discern and put light on few loopholes in the amended act that may be used to exploit the farmers, rather than helping them; which will altogether negate the sole purpose these amendments. The readers will be informed of the chronology of the complete picture, along with farmers demands and stipulations. Lastly, a few suggestions are also mentioned in this paper, including the analysis and conclusion.


The need of policy reforms in agriculture

The Union government enacted two novel laws for farming, and changed the Essential Commodities Act 1951 for agriculture farming stuff, in September 2020. This paper talks about the ramifications of the      multitude of three Acts, the farm sector area, APMCs, the MSP system, consumers, agriculturists and related aspects. The Indian economy had begun quickening, driven by the non-agriculture sector. Thus, India entered the league of modern, arising economies. This credited to advancement, lesser control of the public authority on economic activities. Be that as it may, agrarian development stayed stuck at the previous level– with negative development in agriculture income. The positive effects of the 1991 policy reforms on the non-agribusiness area and the developing dissimilarity among agriculture and non-farming incomes drew attention of certain specialists and they began talking about the requirement for changes in the agribusiness area. The requirement for policy changes in agriculture was additionally required by liberalization of agriculture trade because of WTO agreement and rising instances of farmers suicides.


  1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020[1]
  2. Trade of farmers’ Produce: The Ordinance allows intra-state and inter-state trade of farmers’ produce outside the physical premises of market yards under the state APMC Acts and other markets notified under the state APMC Acts. The trade exchange which may be carried out in an ‘outside area’, i.e., area of production, collection, and aggregation of farmers’ produce.
  3. Electronic Trading: It allows the e-trading of scheduled farmer’s produce. E-trading platform to be set up for smooth exchange of such produce through electronic devices and internet. The following body may surface and operate such platforms:
    • (i) companies, partnership firms, or registered societies, having permanent account number under the Income Tax Act, 1961 or any other paper stated by the government, and
    • (ii) a farmer producer organization or agricultural cooperative society.
  4. Market Fee Abolished: The bill forbids state governments from levying any quite market fee, cess on farmers, traders, and electronic trading platforms for trade of farmers’ produce conducted in an ‘outside trade area’.
  5. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020[2]
  6. Farming Agreement: The bill states that there must be an agreement between the farmer and the buyer before production of any farm produce. The minimum stated period of the agreement will be one crop season, a production cycle of livestock. The maximum period given is five years, unless production cycle is more than five years.
  7. Pricing of Farming Produce: The monetary return of the farming produce must be stated in the agreement. For prices open to variation, a guaranteed price for the produce and the reference for any   additional sum above the guaranteed price must be stated in the agreement. Also, the course of price determination should be stated in the agreement.
  8. Dispute Settlement: A farming agreement must state a conciliation board and the conciliation process for settling of conflicts. The Board should have an unbiased and stable representation of parties to the Initially, all conflicts must be referred to the board for solutions. If the conflict still is not resolved by the Board after thirty days, parties can address it to the Sub-divisional Magistrate for resolution. Parties do have a right to appeal to an Appellate Authority against decree of the Magistrate. Both the Magistrate and Appellate Authority must dispose of the conflict within thirty days from acceptance of application. The Magistrate or the Appellate Authority may enforce a fine on the party failing to comply with the agreement. Nevertheless, there can be no action against the agricultural land of farmer for recovering any dues.
  9. The Essential Commodities (Amendment) Ordinance, 2020[3]
  10. Regulation of food items: The Act designates a few goods (food items, fertilisers, and petroleum products) as essential products. The union government may regulate the production, supply, distribution, trade, and commerce of such essential products. The Act states that the government may control the supply of certain food items such as cereals, pulses, potatoes, onions, edible oilseeds, and oils, but only under extraordinary circumstances.
  11. Stock limit: The bill states that fixing of stock limit on agricultural products must be based on hike of price. A stock limit may be enforced only if there is: (i) a 100% rise in retail price of agriculture produce; and (ii) a 50% increase in the retail price of non-perishable agricultural food items.


How the loopholes in the ordinances might be used to exploit the farmers.

A.     The Farmers (Empowerment & Protection) Agreement of Price Assurance and Farm Services Bill [4]

It draws a system for contract amongst farmers and buyer prior to planting of a yield and for question      settlement recommends three level instruments – the conciliation board, sub-divisional magistrate and      appellate authority. In any case, the purposes of conflict are:

  1. Under this law it’s not required for an organization to make a written agreement with the farmer. Along these lines, regardless of whether the organization abuses the conditions of the agreement, the farmers can’t demonstrate it.
  2. It does not carry any repercussions against the companies which do not register their contracts.
  3. Bill does not state that contract price of the crop must be same or over the MSP. It implies that the organizations can follow through on whatever cost they want to the farmer.
  4. The Essential Commodities Act (Amendment) Bill:[5]

It enables the Central government to regulate food things in exceptional conditions or enforce stock limit if there is an abrupt value rise. Be that as it may, the purposes of conflict are:

  1. Till now only farmers, farmer cooperatives and Farmer Producer Organizations didn’t have any limitation for loading, creating or selling their yield. Thus, they take cognisant choice of selling their yields just when the market or the purchaser is offering acceptable cost for the harvest. Thus, under this bill the farmers are not getting any new opportunity. On the opposite, the govt. is now eliminating all the foodstuffs from this category permitting firms and traders to store large quantities of food which amounts to promoting hoarding.
  2. Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill[6]:

It permits intra-state and amongst state exchange of farmers produce beyond the actual premises of        Agricultural Produce and Livestock Market Committee (APMC) markets. State will be presently precluded from imposing any market fees or cess outside APMC zones.

  1. The public authority says that now the farmers will have opportunity to offer to anybody. Under the bill, the agri-business organizations, corporate and merchants are permitted to open their own business sectors to buy from farmers. Nonetheless, the greatest dread coming from this is that it will crush the level battleground between the APMC markets and different traders. Under the bill, the exchange outside the APMC Mandis is basically unregulated.
  2. Farmers were demanding that just in case the govt is allowing, new set of farm markets to return up; the state and native government should tend power to oversee their functioning and also regulate them. However, their demand is ignored.
  3. Presently if the farmers feel the dealers/corporate/specialists working inside the APMC Mandis are engaging in any unreasonable practice, they could protest to the APMC Officers situated in the actual yard. However, with the new Bill, just in case of any disputes, farmers would be required to go to a sub-divisional magistrate court – which is beyond the capacity of small farmers to pursue given their financial constraints.


These farm laws are categorized as Anti-Farm laws and has developed into a huge controversy. The farmers are in contention that the corporate firms will turn their words around to shackle them in an unflattering contract. They feel it would be extremely difficult for a farmer to consistently comprehend the consequences of the agreement that he is marking. The farmers are panicking as they fear that the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 may lead to corporatization of the entire agricultural market and the prices may be controlled by the corporates. The worrisome apprehension is that there will be lack of proper implementation of the laws and this will lead to misuse more than the use of the laws which will essentially exploit the farmers. The farmers presently sell at a Minimum Selling Price or MSP that the activists and farmers think will not be met with, despite the fact that it is a measly sum, if these changes take place.

To have their demands met, and their concern be heard, thousands of farmers from Punjab, Haryana and   Uttar Pradesh had gathered at Tikri, on the Delhi-Haryana border since November 25. They demand from the government to repeal the three new farm laws. They dread that the enactments will end the Minimum Selling Price they get from the public authority on key crops, leaving them helpless and vulnerable before large companies.

As the farmers advanced toward Delhi, they confronted water gun, poisonous gas shells and police mallet on the way. Witnessing the plight of numerous farmers, students, celebrities and even the people from across the border stood up in favour of farmers showing earnest solidarity.

Observing such an uproar in the country, the govt. propounded a proposal to suspend the farm laws for a year and a half and also suggested that a committee must be formed on MSP and the laws concerned, but the proposal was completely rejected on the grounds of whole revokement of the farm laws for once and all.


The farm law enacted by the parliament, is formulated with the good intentions of liberating the farmers of the many regulations, the Act has many good key points that might prove to be revolutionary for the Indian Economy in the future. But for the laws to be a revolutionary move, the govt must adhere to many loopholes and key issues hidden in the laws. As mentioned above in the report, there are numerous key issues that might be used easily to exploit the farmers rather than helping them, also the laws are not fully equipped right now as per se, they lack the actions and repercussions against the corporates, if they do not register their contracts. If the govt. rectifies the law as per the loopholes and manages to dissipate them, mutually with the farmers, heeding to their concerns, the ordinances passed will bring the huge change.

Given, the law is reviewed and key issues addressed, then the law will the revolutionary move of the Indian Govt, after 1991 policy reforms, that lead to huge development of other sectors. As we know that Farmers contribute to 18% of the total economy, if regulated by proper laws, it can boost our economy to a great extent that we desperately need right now due to this pandemic. To a certain extent the laws are upright, but it still needs a lot of improvisations and alterations prior to its enactment. 42% of Indians are employed under agriculture sector, and passing of laws that may regulate their composition utterly, is a challenging task, and it is imminent for the laws to come under scrutiny, given such huge uproar of whole nation on account of enactment of such laws.

[1]IBEF Blog, India’s promising new agricultural policy (Nov 20, 2020) (IBEF)

[2] Ibid at 1.

[3] LSBillTexts, Bill No. 113-C (Lok Sabha, 2020).

[4], “Farmers Bill 2020 (Empowerment & Protection)” PRS Legislative Research, Sep18, 2020.

 [5] Ibid at 4.

[6] Ministry of Law and Justice, Report on Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 (Legislative Department, September, 2020).

Written By

Vidushi Garg

Vivekananda Institute of Professional Studies

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