+

Farmers Produce Act, 2020: Policy and legal analysis

The explanation of scheduled farmers’ produce does not pertain to farmers’ produce. It rather pertains to agricultural produce, which has not been formulated under the Act. It additionally refers to State APMC Acts, the state-specific statutes that govern the buying and selling of agricultural produce. The State APMC Acts are supported by schedules, which list out several commodities of agricultural produce.

INTRODUCTION

 Farmers Produce trade and commerce (promotion and facilitation) bill, 2020, received presidential assent on 24th September, 2020. Finance Minister Nirmala Sitharaman motioned the Union government’s expectation to legislate a new central law that would override prevailing state regulations that prohibit the farmer from fairly selling to anyone other than a buyer licensed by the local Agricultural Produce Marketing Committee (APMC). The outcome to push for a central law appears after displeasure with two decades of unfair and unequal reforms by various states. 

However, after examining and analysing the aforementioned Act, it can be referred that, this particular Act carries a lot of loopholes. In this problem, the authors are intended to address those legal issues and concerns, which remain unanswered by the legislatures. In our further study, we shall discuss the issues confronting by the farmers concerning the complication between farmers’ produce and schedule, and its consequences, issues related to jurisdiction, and disproportionate penalties, etc. The difficulties farmers confront are not merely an outcome of granted, monopolistic interests, but are grounded in bigger structural circumstances that considerably diminish their terms of engagement in agricultural markets. The former may be dealt with regulatory intervention, But the latter will require location-specific strategies, well-directed investment, and wellfunctioning agricultural organizations. It is difficult to comprehend how either can be attained without a great deal of consensus, coordination, and ability in which the states will require to play a crucial role.

 COMPLICATIONS WITH RESPECT TO FARMERS’ PRODUCE OR SCHEDULED FARMERS’ PRODUCE 

As per the Farmer’s Produce Act, 2020, sec. 2(c) “farmers’ produce” means, (i) foodstuffs including cereals like wheat, rice or other coarse grains, pulses, edible oilseeds, oils, vegetables, fruits, nuts, spices, sugarcane, and products of poultry, piggery, goatery, fishery and dairy intended for human consumption in its natural or processed form; (ii) cattle fodder including oilcakes and other concentrates; and (iii) raw cotton whether ginned or unginned, cotton seeds and raw jute.

 On the other hand, sec. 2(j), defines, defines “scheduled farmers’ produce” as agricultural produce specified under any State Agricultural Produce Market Committee (APMC) Act for regulation. The explanation of scheduled farmers’ produce does not pertain to farmers’ produce. It rather pertains to agricultural produce, which has not been formulated under the Act. It additionally refers to State APMC Acts, the state-specific statutes that govern the buying and selling of agricultural produce. 

The State APMC Acts are supported by schedules, which list out several commodities of agricultural produce. Thus, the term scheduled farmers’ produce refers to the united set of all commodities of agricultural produce that are governed under any State APMC Act. These are comprised of commodities such as cereals, pulses, fruits, vegetables, dairy products, flowers, tendu leaves, bamboo, timber, wool, honey wax, tulsi, catechu, tobacco, etc. 

However, not all of these commodities would come under the ambit of farmers’ produce. This is because commodities such as flowers, bamboo, camel hair, etc., which are all commodities of scheduled farmers’ produce, do not come in any of the three pigeon holes of the term farmers’ produce. Therefore, the word “scheduled farmers’ produce” comprises various commodities that do not fit within the purview of farmers’ produce. 

The Consequence 

Section 2(b) defines ‘farmer’ as somebody who produces farmers’ produce. Similarly, Section 2(n) defines ‘trader’ as somebody who buys farmers’ produce. Likewise, Sections 2(e) and 2(f) clarify inter-state and intra-state trade concerning farmers’ produce. 

Therefore, according to the aforementioned Act, it is clear that all the activities related to buying and selling of farm products and commodities are defined under the concerning farmers’ produce and with the regard to scheduled farmers produce. Hence, illustratively, bamboo cultivators, tobacco producers, and flower producers are not farmers under this aforesaid Act, because these commodities are scheduled farmers’ produce that does not come under the ambit of farmers’ produce. 

The peculiarity in Section 4(1)

 Additionally, Section 4(1) authorizes a trader to freely engage in interstate and intra-state trade of scheduled farmers’ produce with a farmer or another trader. As clarified above, under this Act, inter-state and intra-state trade have been interpreted with reject to farmers’ produce and not concerning scheduled farmers’ produce. 

Thus, according to the interpretation of section 4(1), it is understandable that the right of trading freely, in buying and selling of commodities of inter-state and infra state border is only given to framers produce and its commodities not to the scheduled farmers produced. 

Accordingly, Section 4(1) bars a broad range of farmers that do not produce commodities that would come under the ambit of farmers’ produce but produce commodities that would differently come under the ambit of scheduled farmers’ produce (such as tobacco, wool, etc.). A similar is the role for individuals who entirely trade in scheduled farmers’ produce. 

Can a trader sell?

 Interestingly, the explanation of the trader is also likely with other provisions of the aforesaid Act. According to Sections 2(e) and 2(f), which formulate inter/intra-state trade, two traders can trade on farmers’ produce with each other. However, Section 2(n), which explains trader, prohibits the acts to only purchasing farmers’ produce. These inconsistencies completely bloom in Section 4(3), which specifies that a trader shall pay for the scheduled farmers’ produce to the grower ideally on the same day or maximum under three days. Once again, the stipulation pertains only to dealers and growers, as explain under the Act and eliminates individuals that do not grow/trade-in farmer’s produce, but differently produce/trade-in commodities that come under the ambit of scheduled farmers’ produce. Likewise, this section also eliminates the buying/selling of scheduled farmers’ produce between two dealers. Accordingly, the Act may inconsistent with Article 14 of the Constitution of India, as it bars a whole variety of individuals and commodities without any adequate justification.

 JURISDICTIONAL ISSUES 

Chapter III, from sec. 8 to sec. 10 of the farmers produce, Act, 2020, deals with Dispute Resolution. Section 8(1) furnishes that in case of any conflict between a farmer and a trader, the parties can initiate conciliation by filing a request by application with the Sub-Divisional Magistrate (SDM). Regardless, the Act does not stipulate which SDM would territorial jurisdiction perform.

 It could be the SDM of the region where the farmer resides or ordinarily labors for income and/or where the trader lives or ordinarily trade for income and/or of the trade region, where the agreement took place. At the time, the Act provides all SDMs all-India jurisdiction. Once again, the advantage of dispute resolution is not available in disputes where the individuals produce/trade entirely in scheduled farmers’ produce, which does not come under the ambit of farmers’ produce, and/or if both parties are dealers. 

APPELLANT PROCEDURE

 Section 8(8) of farmers produce, Act, 2020, furnishes for an appeal from the SDA’s judgment to the Collector (or the Additional Collector nominated by them). Regardless, the appeal is irrelevant because, under the Act, there is no provision for the SDA to report any justifications for their judgment. In the dearth of justifications, the appellate authority does not have the advantage of the purpose of the SDA’s dignity.

 Furthermore, there is no additional appeal from the Collector’s decree to any judicial authority, evacuating only the solution of a writ petition. Pertinently, Section 15 also excludes the jurisdiction of civil courts.

 DISPROPOSINATE PENALTY 

The farmers produce Act, 2020, under section 4, it is stated that (1) Any trader may engage in the interState trade or intra-State trade of scheduled farmers’ produce with a farmer or another trader in a trade area: Provided that no trader, except the farmer producer organizations or agricultural co-operative society, shall trade in any scheduled farmers’ produce unless such a trader has a permanent account number allotted under the Incometax Act, 1961 or such other document as may be notified by the Central Government. According to the reference of the aforementioned provision and after analyzing the said provision it can be referred, that, a constraint order is grossly irrelevant to the second contravention. 

The unpaid farmer’s dues are a contractual infringement between the farmer and the dealer and accordingly cannot have effects availing against, such that the privilege of the trader to confront in trade and commerce is entirely taken away. Pertinently, it is not the case that the cancellation shall put up with only one reiterated default, as the Act does not include any provision to that consequence. The defaulter dealer can be weeded out of the business invariably and in all geographies, at the very early instance of default. 

SEGREGATE OFFENDERS: ONCE AND FOR ALL

 The farmers produce an Act, 2020, under Section 8(5), if the conciliation between the parties goes wrong, they can reach the SDM for compromise of such conflict. Under Section 8(7), the SDM (acting as the Sub-Divisional Authority – SDA) shall determine the conflict in a summary way after providing the parties a chance of being heard. Afterward, the SDA may depart a decree of recovery of the amount or assess a compensation or pass judgment regulating the trader in conflict from attempting any trade and commerce of scheduled farmers’ produce, directly or indirectly under the ambit of said Act for such duration as it may consider fit. (i) No authority to reject – Under Section 8(7), of farmers produce, Act, 2020, there is no stipulation for acquittal of the conflict.

 Therefore, even when the SDA does not discover any inconsistency, they cannot reject the conflict and has to award one of the assistances prescribed in Section 8(7). (ii) Mutually restricted choices – The assistance under Section 8(7) are mutually limited, as each of them is pursued by the term ‘or’. Accordingly, if the SDA judgment recovery of money, then they forced liabilities and vice versa. 

Conclusion 

There is no question that the agricultural sector in India expects considerable investment and lawful reforms to accomplish considerable livelihood and productivity. Regardless, the farmers produce, Act, 2020, during a pandemic that (i) eliminate a huge number of individuals; (ii) fail to furnish introductory clauses; and (iii) grant uncontrolled and unguided authority upon administrative officials, amounts to poor law and harshly weakens the dignity of the farmers in the government. 

An unconstitutional Act, in entire or in portion, establishes considerable separations between the three pillars of the State. The government would do well to imbibe the tolerance and persistence of the farmer when striving to govern their existences.

Tags: