Farming has fed civilization since the beginning of time. Society has existed because there were those folks who braved it out in sun and rain to grow, collect and provide food to feed the rest of us.
Given the complications of the marketplace, price fixation among agents, unending need for liquid cash, interest burden on loans, farming has become about as complicated as it can get, and governments have also been avoiding direct involvement and limiting their contributions to catchy slogans without really daring to get involved to any depth. Because of the isolation of each section from the others, middlemen have begun playing a key role in causing extensive losses both to the producers and the end-users, while they have been profiting by trading.
Until now, after the land yielded its produce, and the time came for sale, there were three ways from which the farmer could choose to market his produce – the Local Market, APMC Mandi, while the third option was MSP
In the first option, local market, the farmer takes and sells his produce to a personally known well-wisher at his shop, in his individual capacity. In smaller quantities, up to a yield of up to 30 to 40 kg as for vegetables, this is possible, but when farming food grains that are in quintals, an infrastructure becomes necessary, a cold storage, a warehouse, all of which demand big investments. The government has given a second option, namely, APMC Mandi, run by the state government in every state, cold storage, warehousing, and all support provided by the government, the farmer has only to transport his produce to them and sell it.
The mandi has commission agents who handle the loading, the unloading, the bidding process, acting like representatives of the farmers, then bidding is done, and the farmer sells his crop to the highest bidder. In APMC Mandis however, allegations of price-fixing by the agents have become frequent so that the farmer is forced to settle for whatever is quoted and the agents looking for a profit, make sure to offer the lowest rates possible. Agents have been buying produce themselves at the lowest possible rates, and then reselling it at exceedingly high rates. In most of the states, the agent is allowed a 6% commission on the deal, but agents introducing their own buy-resell loops have started bleeding the producers of earnings that rightfully should have been theirs.
Once this APMC Commission agent option started slipping the wrong way the government brought out an MSP (Minimum Support Price) option and here the minimum price payable is fixed by the government. This reportedly covers only 23 items currently but in this also a new problem emerged – while agents have been observing the MSP in purchase, further deals have also started getting limited to the MSP so that any possible increase is also effectively stymied.
Additionally, the MSP has become a huge burden for the Government as in the case of wheat, the government is buying it at the MSP of Rs. 19.25 per kg, and then selling it at Rs 2.00 in the Fair Price Shops, the burden due to this has already reached a thousand crores per year and climbing.
In June 2020, three new bills were introduced by the government, the first bill allows sale outside the APMC mandi. Under this new act, the farmer can sell the crop anywhere to any private company getting his MSP, and this sale/ purchase is tax-free. Once private players come in, APMC mandis would lose and that will lead to a collapse of the APMC system. It is expected that private companies give very high rates for 3 or 4 years, and once the APMC structure collapses the market will be totally in the hands of private players and maybe just a few of them.
The second bill is about having an agreement of sale between farmers and private players. The expectation is that the farmer can protect himself by having a written agreement with a firm price that includes all expenses after the private players tell the farmer what the produce is that they want, then land preparation, pesticides, fertilizers, warehouses can be worked into the rate for the produce.
The risk is that if a company declares a loss and closes just before picking of the produce, or if buyer refuses to pick up the produce saying that it is not as per the agreed standard, how will the farmer be protected? Farmers by themselves may never be able to hire lawyers to pose a tangible challenge to any private company without losing out on their fields where their day-to-day presence is essential.
Further, farmers having no way of knowing the future of private players it will be impossible for them to scrutinize each agreement offered in a manner that effectively protects them from future risk.
Farmers want that that MSP should also be added in this but placing MSP in this bill will force the present situation to continue which the government wants to avoid in the first place because MSP is a liability on the government that no private party would accept.
The 3rd bill Essential Commodities Bill, this is not a new bill, it had been issued in 1955, and it has now been revised to delist rice, pulses, potatoes, onions, and cooking oil. There is every possibility that at this will lead to hoarding black marketing, and artificial shortages, particularly around festivals. Just how this would be controlled once it is in private hands is anybody’s guess. As is well known, OPEC countries routinely act in tandem to reduce the production of oil when its price falls below what they ‘need’, the same justification could be used by private players in agriculture when they decide that they need to ‘improve’ the return on their investment.
And while objections are being raised to the Farm Bills with full gusto, it cannot be denied that the Farm bills also pose a significant threat to vested interests that have been imposing a severe burden not only to farmers but also consumers. What is noticeably lacking in the Acts is a protection against new cartels of vested interests taking over from the previous ones and then again bleeding the system from within.
The Government is not about to repeal them and lose face!
In the introduction and passing of the third Amendment to the constitution in 1954, PM Jawaharlal Nehru had, for the first time, drawn the line that it was the right of the Union to pass laws on agriculture, which was very clearly a State Topic according to the Seventh Schedule. He took the step to ensure the cooperation of states that were not prepared to go along with the Union on Agricultural Reform. The same situation stares us in the face again.
Speaking at Rae Bareilly, during the 2014 Election Campaign for his party, PM Modi had promised the predominantly farmer gathering, that by 2022, their income would be doubled. This his party expected to achieve by releasing the farmer from the chains of government-owned markets, a feat that they hoped to accomplish by the three bills that the Modi government passed on 20.9.2020 to replace ordinances earlier issued.
The Union government lying low for several years, knew all along, that without a very holistic reform in the farming sector, tiny face-saving patchwork will not have any tangible effect on a system that is as old as mankind. The Government understood that big reform would provoke resistance, and the only way to face it would be head-on akin to the political confrontation that followed the implementation of the Mandal Commission in 2006. It had caused maybe the worst violence in Independent India, but after about a year, all those tensions faded away and reservation quotas for OBCs became the new normal.
The playbook of democratically elected governments worldwide provides time for a honeymoon to the government for up to the end of its first term but the second one becomes its defining legacy and the current government now in its second term is fully aware of this. For this government, with Article 370 out of the way, and the Ajodhya temple on the verge of being built, courtesy a Supreme Court Judgement, the NAC, CAA, and the Farm Bills are crucial to fulfilling its promises to those who voted for their agenda.
With the next election due in 2024, mid-2023 can expect a return of schemes for voter appeasement. The Manmohan Singh government understood that the results in 2014 election may not be in its favour, so it passed the Food Security Act in 2013, the largest in the world, hoping to get a positive response by doing something to help all weaker sections of the population as also farmers.
As the campaign for the 2014 Lok Sabha election took shape, the BJP promised farmers an MSP of 1.5 times the production cost, but after it came to power and formed the government, it did not act on this promise till 2018, and then covered it in the 2018-19 Union Budget because of the election in 2019.
The Government has initiated talks with the farmers, but the demands for MSP have been given a cold shoulder. They want nothing less than a complete repeal of the 3 laws, not just a modification thereof, something the government is loath to do.
On the 5th of June, these three bills came into force by way of an Ordinance. The Law mandates that they had to pass the scrutiny of parliament within six months. The first opportunity was the two-week monsoon session 14/9/20 to 1/10/20. The bills after clearing the lower house because of the majority enjoyed by the ruling party came to the Upper house on 20/9/2020. What followed was a full-scale political battle, which the ruling party won with the support of the rule book and a few political parties who felt it in their interest to support the bills.
Protests were expected as they were in the case of the Citizen Amendment Act as large segments of the population, – people of a particular community and farmers respectively – felt aggrieved for a variety of reasons. But the scale, intensity, and sustenance of both the agitations have rattled the government who has now accused the opposition of hijacking a purely farmer agitation and even beginning to use central agencies to probe farmer organization funding, assuming that the funding is the key to ending the protest. They have also likely used the Pandemic excuse to curb permissions for rallies and protests.
While a majority of farmers are voicing their disagreement over the provisions of the bills, they do seem a step in the right direction, but more safeguards are necessary in the private markets to ensure that there is no cartelization, price manipulation and a complete abandonment of the farmer to market forces which for the moment is heavily loaded in favour of a few huge private firms.
The fact remains that legally and constitutionally, the government has covered its tracks only too well and left no scope for any court to even sustain a view that the bills are unconstitutional.
While the negotiation process of once stonewalling and then inviting people to talk is going on and on, the fact remains that this reform has long been a part of the government agenda and will most probably be implemented as such with piecemeal changes only where it is observed to be necessary.
Can there be a legal challenge to the farm bills?
There has been a hue and cry following the introduction of the 3 farm Bills and people across the spectrum have been questioning the legality of the Bills. Without going into the correctness or ethical issues regarding the content of the Bills, here an attempt is made to look at the legal defensibility of these bills.
Even an eminent person like the SC Bar association President Dushyant A. Dave has called the manner of getting the bills passed unconstitutional and offered to take the fight of the farmers to the SC, DMK MLAs, RJD MPs have also voiced their discomfort with the manner of the passage of the bills on 20/9/2020. They say it was unconstitutional. They are now attempting to have the SC declare these Acts as void,
Challengability of Acts passed by Parliament
To challenge the Constitutionality of these bills it will first have to be proved that the bills are not as per law. For this one must prove that anything included is in contradiction to the constitution, the SC has itself averred on several occasions in the past that parts failing this test would be struck down at once (retaining the remainder assuming it passes the test).
A key test is whether an act is found to be violating the fundamental rights as defined in Article 13, None of these acts has so far been identified by anyone as violative of the fundamental rights in Art 13.
Another key question is whether the Basic Structure of the Constitution is sought to be changed. The SC in the Keshav Bharati Case or The Kesavananda Bharati Case popularly known as Fundamental Rights Case, heard under the name of “His Holiness Kesavananda Bharati Sripadagalvaru and other v. State of Kerala”, resulted in the establishment of the “Basic Structure Doctrine” a concept which believed in the existence of a concept of federalism, defined as the separation of powers between the Union and the states, and any act passed by the Union would be defined as violative of the federal structure of the constitution if it overrides The SLP (Legislative Power of the States),
This would be checked against Article 246 (which defines the Seventh Schedule, Matter of laws made by Parliament and by the Legislatures of States). In case of a dispute under the concurrent list, the law passed by the Union shall take precedence over the law passed by any state.
This would then also checked against Article 254, which states that in case of any inconsistency between laws made by Parliament and laws made by the Legislatures of States, the law passed by the Union shall take precedence over the law passed by any state (The doctrine of federal supremacy of the Union as defined by the SC)
In the Second (State) list of the Seventh Schedule, Entry 14 covers agriculture, Entry 26 Trade & Commerce within the state, and Entry 27 Production, Supply and Distribution of Goods and Services. In the connection, it should be mentioned that Entries 26 & 27 are stated as subject to the provisions mentioned in the entry 33 of the Concurrent list (i.e. Agriculture).
By the definition of the term used, subject to the provisions of enforces the interpretation that the other writing namely the Union List, takes precedence, and this provision will only follow from it, and not override it.
It can be noted here that Entry 33 had been introduced as the Third Amendment in 1954 by the then PM Jawaharlal Nehru, precisely to force the obedience of states who then also, were in no mood to cooperate with the Union on Agricultural reform.
Since the three acts are deemed to have been passed under Entry 33, we must see what grounds are adopted by people trying to challenge the bills as unconstitutional.
One other important factor to be emphasized is that the Supreme Court has always presumed that any Act would be constitutional unless proved otherwise by the challenger, the onus of proving failure is on the petitioner, and the government does not have to prove it is correct,
The claim has also arisen that the act is invalid due to the procedure followed
The following objections on the followed procedure have been voiced, namely Majority Vote, Voice Vote and failure to refer the bill for review to a Select Committee
Majority vote, Voice Vote: After a voice vote the Bills were declared passed, in the din that took place, and it has been stated that the bill getting the votes it needed would not have happened if paper ballots had been used. On 20/9/2020, it may be noted that 221 members were present in the upper house, and with the BJP having released a whip all its members and alliance supporters were present, and a large number of opposition members absent due to the Covid scare, or for their own reasons. Getting the bill passed by a simple majority would not have been an issue if members were in their seats (a prime requirement for ballot voting), which they were not, partly because of the social distancing requirements of the raging pandemic and more importantly, because they were fighting in the well of the House instead of occupying their seats. Their refusal to return to their seats when asked to more than suited the drivers of the bill.
It may be noted that as the lower house had already passed the bill if for any reason it failed to muster support in the upper house, a joint sitting of both houses would then be called, and, if that ever happened, the joint sitting would have easily passed the bills. With all 407 BJP members of both houses present and voting following a party whip, (support of 395 members would be needed only if all 790 members of both the Houses were present and voting as per the sanctioned strength of both the houses) the bills would have been easily cleared in a joint sitting.
Referral to a Select Committee, reference of any bill to a select committee, must be with the consent of all parties when the Ruling party was itself in a hurry to get the bills passed before the monsoon session ended in 11 days, consenting to a committee review was clearly not an option.
Another ‘complaint’ is the Manner of passage in the House which they say is not as per the procedure established by law,
Article 122 of the Constitution specifically states that: The validity of any proceedings in Parliament shall not be called in question in any Court on the ground of any alleged irregularity of procedure. (Procedure-related differences, if any, must be argued and resolved within the House(s), without leaving the resolution of their internal differences to any other arm of the Government).
So, what are the grounds that may be used for challenging the Acts will have to be seen, at most it looks like an attempt to delay the implementation as much as possible to gain political mileage without any real hope of a legal victory.
The fact remains that legally and constitutionally, the government has covered its tracks only too well and left no scope for any Court to sustain a view that the bills are unconstitutional.
