Authored by Ayush Sharma and Devashish Tiwari, 4th year students of JEMTEC School of law.
Introduction
The Farmers Produce Trade & Commerce (Promotion and Facilitation) Bill, The Farmers Empowerment and Protection Agreement & Farm Services Bill with the Essential Commodities Amendment Act, 2020 were placed before the parliament on 14th September 2020 to reform the agricultural sector. The said draconian laws have brought changes to the storage & marketing of farm produce outside the registered market, as well as the facilitation of contract farming.
The Acts are a step towards privatizing the farming industry across the country by permitting the entry of corporate with greater bargaining power than small farmers. The present Acts allow for trade outside the Agricultural Produce & Livestock Market & that could not be taxed therefore rendering APMC mandi redundant. In short, the Bills endeavors to do away with government interference in agricultural trade by creating trading areas free of government taxes & middlemen outside the APMCs, also removing restrictions pertaining to private stockholding of agricultural produce.
Lack of consultation – resulting in mistrust among stakeholders
Multifarious parliamentary procedures were violated by the deputy chairman of Rajya Sabha by circumventing all the demands for voting in order to pass crucial bills, despite persistent demands from the opposition, which can be termed as sheer brazenness. The rules of procedure regarding voting are unequivocal that if a voice vote is challenged, the division of votes has to be conducted. Even if a single member protests, division of vote has to be conducted, irrespective of the discretion of the chairman. The explanation that members were not in their seats at the time of the demand of division of votes, denying the same on this very ground is absurd in its absolute sense. In any case, regardless of which side has the majority in parliament, voting is sacrosanct in establishing parliamentary authority & at any cost, it can’t be reduced to a mere tool of benevolence by the chairman. The immediate repudiation against the request for division of votes was a new low for parliamentary history.
Secondly, when the opposition was keen on sending the bill to the select committee, which was a very genuine & valid request, which ought to have been addressed. While passing these Bills, the government did not deem it pertinent to listen even to the dissenting voices. The procedure adopted by the deputy chairman to pass the Bills didn’t adhere to the democratic norms & is a plot on our democracy. The government is elected to look after the interest of the people & to safeguard their interest, which should be of paramount importance; including farmer’s community contributing towards the foundation of the country should have acted with more humility.
In this particular case, the issue is not just limited to bills; it’s also about the procedure through which they have been forcefully passed. The government has failed miserably to hold any sort of discussion or dialogue with various stakeholders, including middlemen & farmers. This also holds true when it comes to due consultation with the various state governments despite the fact that the subject of agriculture & trade is enumerated subjects of state list, resulting in mistrust among various stakeholders, including various state governments. The farmer community views this bill as a craptastic attempt at the corporatization of agriculture & and a consequential withdrawal of the Minimum Support Price. Although the government has clarified numerous times that the Bills doesn’t intend to end the regime of Minimum Support Price, there is a genuine fear behind the true intention of the government. Fear of farmer’s community is not groundless & unfounded, given the track record of this very government with regard to matters of great importance like demonetization, the introduction of Goods & Service Tax & so on.
Legislative competence & federal challenges
Federalism means that state & center has to work in their allotted spheres in unison. It is the very essence of the constitution of our country. The impugned Acts are an insidious attempt to invade the law-making power of state government. Such Acts encroach upon the basic structure of our constitution. Agriculture comes under Entry 14 of List II of the constitution, giving states exclusive authority to legislate on the state, curtsey of Article 246(3). Besides, Entry 18, 28, 30, 45, 46, 47 & 48 further elucidate the scope of legislation on matters related to agriculture. The attempt of the centre to invade into the law-making power of the state offsets the cooperative federalism, being the fundamental principle of the constitution. In S. R. Bommai Vs. Union of India[1], held that both state & center equally enjoy the sovereign power bestowed by the constitution. It was observed by the apex court that the Indian Constitution is ostensibly federal and is characterized by the intuitive features of the federal system, which includes the separation of powers between the Union and the States.[2] [3] In the Kesavananda Bharati vs. State of Kerala[4] case, it was observed that the Basic Structure of the constitution cannot be altered, such as democracy, secularism, federalism, division of powers between the union and states.
There are two indispensable steps in the law-making process; firstly, it is essentials to scrutinize the subject & secondly there must be extensive & robust debate on the floor of parliament, both of which were absent. There is no doubt that the culture of the consultative & deliberative process has to be restored. The Supreme Court rightly observed in A.K. Roy Vs. Union of India[5] that executive should refrain from using its legislative power recklessly in a malafide manner & there should be free & open discussion on a Bill, which is the essence of the democratic process.
Agriculture is in the state list under the Constitution; hence it is beyond the competence of the Rajya Sabha to enact any law on agriculture, which is an exclusive domain of the state government, thus overstepping constitutional jurisdiction. The seventh schedule of our constitution gives exclusive jurisdiction to the state government to legislate on matters pertaining to agriculture. The principle of repugnancy was dealt with by the Supreme Court in I.T.C. Ltd. Vs. State of Karnataka & Ors.[6], where the court held that any legislation falling exclusively within the seventh schedule, would be the exclusive competence of the state legislature. Also, In Union of India Vs. Shri Harbhajan Singh Dhillon[7], Court stated that if a Central Act is being challenged as being beyond the parliament's competence to legislate, it could be struck down on this very ground as being constitutionally invalid. Hence, an unequivocal conclusion can be drawn that parliament can’t legislate on the state subject & state can’t legislate on the central subject, if either oversteps their constitutional mandate, the law would become ultra-virus.
Stumbling blocks associated with the acts
APMC do play an imperative role in price discovery of agricultural produce, the vilification of APMCs & various middlemen who facilitate such trade in these mandis reflects a poor understanding of the functioning of agricultural markets. The majority of farmers are acquainted with the functioning of the APMCs mandis & view it as an essential part of the trade despite all the shortcomings. While the Acts don’t do away with the APMCs mandis but the preference for corporate interest over farmer’s interest definitely requires reconsideration. Also, the absence of any sort of regulation with regard to Non-APMCs mandis is a cause of serious concern & needs to be reconsidered. The absence of any compliance & regulation with respect to Non-APMCs mandi is being viewed as a forerunner to the withdrawal of the guarantee of MSP-based procurement. Also, if we take into account the literacy rate of farmers, they become very prone to exploitation from corporate, the possibility of corporate monopolizing the sector can’t be ruled out & hence strict legal framework regulating contract farming is strictly called for.
Most of the trade is bound to happen outside the APMC market since it is exempted from mandi charges & tax. So in case, the APMC market collapses that Act has envisioned an alternative for a large market for price signals. So rather than unifying the market, people can end having different prices, which might undermine the interests of the farmers. There is no regulation outside APMC mandi & no transaction is accounted for. In APMC mandi there is a system of grievance redressal & recording of the transaction, ensuring just price to farmers for their produce. Meaning inserting a clause for Minimum Support Price for Non-APMC Market will not be an apt solution because private players can’t be instructed to a particular price to deal with, which will be self-defeating for the purpose of private participation & Minimum Support Price. Even, if we were to go for MSP Legislation, consultation is required, which was missing in our federal structure.
The Acts have lacunae; it has lack of regulation & regulatory oversight. Secondly, it is abstruse to have marketing bills that are devoid of state intervention in agricultural policy. The Acts assume that private players don’t exist, which is a flawed assumption. Private players look towards the reference price of APMC to conduct their own trade. It’s an attempt by the government to create an alternative that’s outside the APMC, where you don’t have to pay mandi taxes or fees, which could result in two outcomes. Firstly, APMC continues to set the reference point that will be ludicrous if stakeholders are still looking at APMC for a reference point, in that scenario the idea of eradicating the inefficiency of the APMC market doesn’t hold true. The dominant concern in this regard is that of the failure of Non-APMCs mandis in Bihar, back in 2006. Post the abolition of mandis, the farmers received on average lower prices compared to the minimum support price for most crops. Despite all the shortcomings, farmers will view APMC as a continuance of MSP-based procurement.
Conclusion
The present protest of the farmers reflects the mistrust between the farmers & the objective of the reforms owing to lack of consultation. The present Acts might not be out rightly unconstitutional but definitely suffers from poor legal validity. Now that the matter has reached the Apex court for adjudication, the faith of the farmers would depend upon the courage of the Apex Court to call a spade a spade. It’s high time that the executive restores the faith of the people & restores the effective functioning of parliament. The fate of the farmers has been left to the benevolence of the private players. It is a valid demand to include procurement & regulations, which will assuage a lot of fears of farmers, though reforms were for the welfare of the farmer, lack of safeguards is a cause of apprehension that needs to be addressed via the introduction of a regulatory framework.
References
[1] S. R. Bommai Vs. Union of India AIR SC 1918 (1994). [2] Dr. Pradeep Jain Etc Vs. Union Of India And Ors. AIR 1420 (1984). [3] Ganga Ram Moolchandani Vs. State of Rajasthan AIR SC 2616 (2001). [4] Kesavananda Bharati Vs. State of Kerala AIR SC 1461 (1973). [5] A.K. Roy Vs. Union of India AIR SC 710 (1982). [6] I.T.C. Ltd. Vs. State of Karnataka & Ors. AIR Kant 330 (2005). [7]Union of India Vs. Shri Harbhajan Singh Dhillon AIR SC 1061 (1972).