The Government of India, on 24th September, 2020 rolled out three agricultural laws, popularly referred to as the farm laws. The laws seek to make certain amendments to the existing agricultural laws in India. The proposed amendments however, have sparked major controversy all over the country. Certain provisions have been termed as anti-farmer and have instilled in farmers a belief of uncertainty and fear over the future of farming. The major question is whether these Acts are in confirmation to the grundnorm of our country, that is, the Constitution.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, even though it provides farmers with the freedom to sell their produce and the buyers to buy it outside the APMC markets with an aim to liberalize trade, may not be sufficient to attract more buyers. In a similar attempt, in the year 2006, Bihar State Government removed the APMC system altogether, and the results were not favorable. Due to the lack of private investments and physical infrastructure the volatility of grain prices has increased in the State. Thus, the Act could lead to hardship for the farmers if there is a lack of private investors. However, the government in the wake of the protests has offered that the new Act could be amended to confer power on the State Government to register the traders outside mandis and that the State Government can also impose tax and cess, like they used to do for APMC mandi.
Another major issue is that Minimum Support Price is not provided for. MSP is an intervention by the government to provide a safety net to the farmers to provide a guaranteed price for the farmers produce. However, this fact remains unknown to most people that even before these Acts the MSP regime had no legal backing and it is a government policy of which there is no legal obligation as such. Furthermore, the Government has clarified that it will continue with the MSP regime. Dispute resolution is another topic of controversy. Two of the Acts provide for the exclusion of jurisdiction of civil courts to institute any suit in case of disputes. So, if there is an issue that needs redressal there is a provision for conciliation board for which an application has to be filed with the Sub-Divisional Magistrate. The appeal also goes to the Collector or Additional Collector. In the case of Anita Khushwaha vs. Pushap Sudanthe Apex Court has held that the access to justice is a fundamental right guaranteed to citizens under Article 14 and Article 21 and the bench stated that “In order that the right of a citizen to access justice is protected, the mechanism so provided must not only be effective but must also be just, fair and objective in its approach.” The Sub- Divisional Magistrate is a part of executive and there is no judicial involvement as such, this could lead to increase in corruption and also biased decisions. However, the government through its proposal has proposed to keep the option of going to the civil courts open but it was rejected by the farmers as their main demand is to get the laws repealed. Another impracticality is that, in a country where 82 percent of the farmers are small and marginal farmers with not such an income which would enable them to afford legal services and 30 percent of them are illiterate, they cannot be expected to understand the terms of contracts documented in legal language.
The amendment brought about in the Essential Commodities Act can lead to excessive hoarding of the stocks which could lead to price rise and ultimately low demand of such produce. The Act provides that the foodstuffs including cereals, pulses, potato, onions, edible oilseeds and oils can only be regulated under extraordinary circumstances like- war, famine, extraordinary price rise and natural calamity of a grave nature, here the term “natural calamity of a grave nature” is ambiguous and is nowhere defined in the Act. Even while stock limit is imposed exemption can be given to the ‘processor or value chain participant of any agricultural produce’, if the stock limit of such person does not exceed the overall ceiling of installed capacity of processing. Such capacity is changeable and thus, a very easy way to evade stock limit. A further exemption is allowed to an exporter depending upon the demand for export. India is neither a federal nor a unitary country, but a quasi-federal country. It is a fact that our Constitution embodies principle of cooperative federalism through various articles like- Article 252(1), 282, 261(1), 263 and 312 etc. Here the Central, the State and the local government interact cooperatively and share their responsibilities in the governance. The seventh schedule lays down the subjects to be covered under the Union, State and Concurrent list. In the case of subject under the concurrent list, the Central law prevails. Agriculture as a subject, including agricultural education and research is contained in List II under Entry 14.Apart from this other agriculture related matters like transfer of agricultural land, agricultural loans, taxes on agricultural income, succession of agricultural land etc. are also covered under List II as a State subject under entries 18, 28, 30, 45, 46, 47 and 48. However, while formulating the current Acts, the Central Government seems to have invoked entry 33 of List III, which states- Trade and commerce in, and the production, supply and distribution of, –
(a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products
(b) foodstuffs, including edible oilseeds and oils
(c) cattle fodder, including oilcakes and other concentrates
(d) raw cotton, whether ginned or not ginned, and cotton seed; and
(e) raw jute
The history of entry 33 suggests that the entry was enlarged by the Third Constitutional Amendment Act, 1954 and it was done so that the Parliament could legislate in respect of industries declared under Union control and other essential items to tackle the scarcity of such essential items for public interest. But in the present circumstance there was no need for such legislation. However, as per the doctrine of Pith and Substance, the essence of the legislation has to be seen and not its incidental effects and in this case, agriculture which is essentially a State subject is being directly controlled by the Central government through these Acts. The intention of the framers of the Constitution has to be seen, if they intended for agriculture to be a Union subject, they would not have used terms like- “transfer of property other than agricultural land” and “Contracts including partnership, agency, contracts of carriage and other special forms of contract, but not including contracts relating to agricultural land” in entries 6 and 7 of List III, respectively and included all matters relating to agriculture in List II. The doctrine of Colorable Legislationcan also be invoked. It means what cannot be done directly, cannot be done indirectly. In the case of ITC Ltd. vs. Agricultural Produce Market Committeethe Supreme Court struck down the Central Tobacco Board Act, 1975 and upheld State law related to agricultural produce and marketingas there was a conflict between Entry 52 List I under which the Central Act was rolled out and Entry 28 of List II which gives exclusive power to State government to legislate on market and fairs. The Court held that setting up of market areas, market yards and regulating facilities within such area or yards by levy of market fee is a matter of State governance under entry 28 List II.Thus, the Central government is not competent to legislate on this particular matter and even in Section 6 of the Trade and Commerce Act state that the State will not charge any market fee, cess or levy on the trading of farm produce. How can the Central government legislate on this indirectly, when it cannot do so directly? Thus, this can be said to be a colorable legislation.
With regards to MSP, there is a serious requirement for a statutory backing or at least a better implementation of the same because as per NSSO survey of July 2012 to June 2013 less than 6% of Indian farmers have benefitted directly from MSP regime. Another suggestion is that instead of handling the entire dispute resolution to executive, fast track courts could be created for particularly dealing with such disputes. Agriculture is a state subject and the legislations should have been passed after obtaining the consent of the states or at least the state government should be more involved in the making of the legislations so that more practical aspects according to the different conditions of the state could be dwelt upon.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, Section 8, Act No. 21 of 2020, (Sep 24th, 2020).
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