1. 3 bills passed by Lok Sabha And Rajya Sabha which generated controversy
1.1. Why the controversy?
1.1.1. One view
1.1.1.1. Farmers will get out of the clutches of monopoly of APMC mandis
1.1.1.1.1. Choice for farmers
1.1.2. Other view
1.1.2.1. Ploy by the government to get away from its traditional role of guarantor of Minimum Support Price
1.1.2.1.1. MSP works in APMC and not in private deals
1.1.2.1.2. MSP
2. What are the bills?
2.1. Farmers Produce Trade and Commerce (Promotion and Facilitation bills)
2.1.1. Allows farm produce to be bought and sold outside the state government regulated APMC mandis
2.1.1.1. idea is to increase farmers choices
2.1.2. allows farmers to sell produce anywhere within the state and outside the states
2.1.2.1. To private traders
2.1.3. market fee abolished
2.1.3.1. for trade of farmers produce conducted in outside trade area
2.1.3.2. used to be levied by the state governments
2.1.4. Allows electronic trading of scheduled farmers' produce in a specific trade area
2.1.4.1. Electronic trading and transaction platform to be set up
2.1.4.1.1. for online buying and selling of such produce
2.2. Essential Commodities (amendment) bill,2020
2.2.1. Allows Central Government to regulate supply of certain food items
2.2.1.1. Only under certain Extra-Ordinary circumstances
2.2.1.1.1. War
2.2.1.1.2. famine
2.2.1.2. Stock limits can be imposed if price rise
2.2.1.2.1. Stock limits to be imposed
2.3. Farmers Agreement bill
2.3.1. creates a framework for contract farming
2.3.1.1. contract farming involves an agreement between buyer and seller to buy and sell at a pre decided price
2.3.1.1.1. prior to production and rearing of farm produce
2.3.1.2. minimum period of agreement
2.3.1.2.1. 1 crop season or 1 production cycle of livestock
2.3.1.3. maximum period of agreement
2.3.1.3.1. 5 years
2.3.1.4. pricing of farming produce
2.3.1.4.1. should be mentioned in the agreement
2.3.2. 3 level dispute settlement mechanism
2.3.2.1. 1.Concialiation board
2.3.2.2. 2.Sub divisional magistrate
2.3.2.3. 3.Apellate authority
2.3.2.3.1. presided by the collector or the additional collector
3. Aim of the bills
3.1. liberalise farm markets
3.1.1. to make it more efficient
3.2. better price realizations for all
3.3. making farming remunerative
4. Why reforms became necessary?
4.1. Agricultural Produce Marketing Committee
4.1.1. regulated by State APMC laws
4.1.2. Designed to protect small farmers from being exploited by unscruplous private buyers
4.1.3. Aim
4.1.3.1. ensuring fair trade between buyers and sellers
4.1.3.1.1. for effective price discovery of farmers produce
4.1.4. can
4.1.4.1. regulate the trade of farmers' produce by providing licences to
4.1.4.1.1. buyers
4.1.4.1.2. commission agents
4.1.4.1.3. private markets
4.1.4.2. levy market fees or any such charges on such trade
4.1.4.3. provide necessary infrastructure within their markets to facilitate the trade
4.1.5. issues in working
4.1.5.1. Most APMC have limited number of traders operating
4.1.5.1.1. leads to
4.1.5.2. undue deductions in the form of commission charges and market fees
4.1.5.3. Traders,Agents organize themselves into associations
4.1.5.3.1. donot allow easy entry of new persons in the APMC
4.1.5.4. acts are restrictive in promotion of multiple channels of marketing
4.1.5.4.1. examples
4.1.5.5. role of commission agents
4.1.5.5.1. middlemen who add no value
4.1.5.5.2. indulge in rent seeking behaviour
4.1.5.6. farmers have to sell within the limits of APMCs
4.1.5.7. local politicians exercise undue influence over the working of APMC mandis
4.1.6. Central government wants to reform agricultural markets but agriculture is a state subject
4.1.6.1. central government brought 2 model laws but state government didnt implement
4.1.6.1.1. hence new laws brought by government
5. Criticism of the bills
5.1. Bill will help traders especially big corporations
5.2. System if implemented will make the APMCs collapse
5.2.1. traders involved in APMC will be the first to move to the new system and hence APMC will collapse