Farm Bill 2020: Pros And Cons

The Farmers Produce Trade and Commerce (Promotion and Facilitation Bill) 2020 is a bill that promotes and brings forward how the farming produce is bought, stored, and sold across the nation. The bill aims in creating an atmosphere where the farmers enjoy the right and freedom to produce, sell, or purchase agricultural produce outside the registered Mandis and states under AMPC’s. It also carries forward barrier-free inter-state and intrastate trade of agricultural produce. The bills also provide ease for the formation of a framework that is facilitative for E-Trading or Electronic Trading. Therefore it enables the farmers to access the latest and modern technology to get better inputs and produce. It also reduces the marketing cost for the farmers which helps them in better earning. It facilitates the reduced transportation costs so as it eradicates the problems faced during agricultural distribution.

The bill provides that the farmers that they may enter into an agreement/contract with the Agricultural firms, Wholesalers, retailers, or exporters for the sale of the agricultural produce. It cancels the risk of whimsicality for the farmers.


The Farmers Produce Trade And Commerce (Promotion And Facilitation Bill) 2020 was passed along with 2 more bills accompanied by 1) The Essential Commodities Amendment Bill, 2020, and 2) The Farmer (Empowerment And Protection) Agreement Of Price Assurance And Farm Services, 2020These bills were passed to accelerate the growth in the farming sector through the private sector investment in the formation of the infrastructure of the food chain supply of the production in the national as well as foreign market. 

With these national amendments, the farmers will get better prices through the high rate of competition and cost-cutter transportation. It will allow the farmers to improve farm productivity, which may reduce the pressure on the farmers to sell away the crops in a particular period. These bills allow the farmers to be the traders of their products and control the process of agriculture from production to transportation. The intention of these bills is to regulate the farmers and the small-scale traders to enjoy their own produce to sell, produce, and distribute.

The Agricultural Sector covers over 19% of the total Gross Domestic Product of the country. The depression in the existing system is that since the late times the farmers are facing many problems such as overproduction, high transportation cost, high rate of interest, high debt rates, and low crop prices. The bill will help both the farmers that are the producers and the customers that are the consumers, to bring price stability in the market. This bill shall also facilitate bringing affording or investment in storage systems for example Godowns, warehouses, and Cold Storages to avoid damage of seasonal crops and harvest.

But all the above mentioned 3 bills that are The Farmers Produce Trade And Commerce (Promotion And Facilitation Bill) 2020The Essential Commodities Amendment Bill, 2020, and The Farmer (Empowerment And Protection) Agreement Of Price Assurance And Farm Services, 2020 was opposed by the members of the Parliament as well as the local farmers. The opposition parties included All India Trinamool Congress (TMC), Indian National Congress (INC), Dravida Munnetra Kazhagam (DMK), and Bahujan Samaj Party (BSP). The arguments put forward by the parties was that it was against the interest and returns of the small scale and local farmers. It was argued that the state will lose revenue and will not be able to collect the Mandi Fees if the farmers sell the agricultural products out of the Agriculture produce market committee.

There were few demands which were put forward by the farmers of the nation to revoke all the 3 bills passed by the parliament. To eradicate the Monopolistic Market of the mandis, to get assured payments from the buyers to the farmers through middlemen as they make money by selling the produce more than the price of the purchase, and to clear out all the loans and debt of the farmer. 

More than half of the state and central government’s action of obtaining wheat and paddy in the last five years has taken place in Punjab and Haryana state. According to Agriculture Ministry data, more than 85% of wheat and paddy are grown in Punjab, and 75% in Haryana, is bought by the government at Minimum Support Price rates. Farmers in the state of Punjab And Haryana fear that without MSPs, market prices will fall drastically. These States have most invested in the APMC, with a strong channel of mandi network, a well-oiled system of arthiyas or commission agents facilitating procurement, and link roads connecting most villages to the notified markets and allowing farmers to easily bring their produce for procurement. The Punjab government charges a 6% mandi tax (along with a 2.5% fee for handling central procurement) and earns annual revenue of about ₹3,500 crores from these charges.

The Pros And Cons of The Farm Bill, 2020

  • Pros of the Bill 
  1. The amendment to the Essential Commodities Act which is one of 3 three bills under protest which eradicates the fear of the farmers, that traders who buy from farmers would be punished for holding stocks that are deemed excess and inflicting losses for the farmers.
  2. The Bill provides an alternative platform for the farmers to sell their products across the nation and worldwide. 
  3. The Bill facilitates farmers to sell out the product directly to the Corporate or An Exporter buying is wholesale from the farm gate itself. 
  4. There is a possibility that in the year 2020, with the help of the Farm Bill, 2020 there can be a transformation in agriculture and can lead to double farm incomes.
  5. The farmers shall be more technologically aided and advanced in the society. 
  6. A shift towards a more flexible and feasible system. 
  7. Sale of agricultural products outside the territories of mandis will be an additional marketing channel as well a profit maximization for the farmers.
  8. The new bill has not challenged the existing system but added a simpler clause that now the market is open universally but only through the Electronic-National Agriculture Market.
  9. The system shall make mandatory for a farmer to go through a trader that is mandis so as to sell their produce to the consumers, companies, and firms to receive Minimum Support Price.
  10. The bill aims to benefit small-scale farmers with less than five hectares of land. The Bill also will remove items such as cereals and pulses from the list of essential commodities and attract Foreign Direct Investment.
  11. The Board Conciliation does not have any right to impose any penalty on the farmers and traders, they can only interfere to solve disputes they fall into. 
  • Cons of the Bill
  1. Minimum Support price has been declared for the crops, but there has been no specific rule or a law that is implemented.
  2. The Farm Bill has not eradicated monopoly, the monopolistic market is still a great competition in the mandis.
  3. No statutory backup for Minimum Support Price.
  4. Even if there is no direct relationship between farmers and law, the Minimum Support Price is a price at which they sell their produce, and there is no mention in the laws implemented. 
  5. The only crop where MSP payment has some statutory implementation is sugar cane for which FRP is determined. This is due to its pricing being governed by the Sugarcane (Control) Order, 1966 issued under the Essential Commodities Act.
  6. There are two areas of caution for the farmers, The Government, and The Consumers. The corporate interventions in agriculture markets need to be monitored closely, even when they invest in value chains.


Few Environmentalists, Economists, and Activists say that both Punjab and Rajasthan are considering legal measures to expand the bounds of their Agriculture Produce Market Committee Mandi Yards to ensure that they can continue collecting taxes on all agricultural trade within the State’s borders. The easiest solution against the protest of the farmers concerning the farm bills can be including backing to the minimum support prices to eradicate the fear of the farmers.

Providing farmers, the facility to connect to the market with an actual middleman will be a bliss to the farmers, but the transportation facilities have to be improved, the climate-controlled storage facilities, electricity supply, road links, storage facilities.

The Commission For Agricultural Costs and Prices recommended that Minimum Support price along with the Central ministries and State Governments itself is not any statutory body set up by the Parliament. It is only a government policy that is part of the administrative decision-maker. The government declares MSPs for crops, but there is no legal implication. The government can procure at the Minimum Support Prices if it wants to do so. Therefore, the system of MSP will remain and government procurement will continue, this fear has to be clarified even further and farmers should be guided well in this regard.

Frequently Asked Questions (FAQs)

  • Whether the Traders or Farmers have Any additional benefit through this scheme?
  • Whether the farmer can operate In the Agriculture produce market committee trade?
  • Whether the farmers need to register for the Selling of the products in the Inter-State trade, Intra-State trade?
  • Whether the farmers need to pay commission to anybody for the sale of their produce?
  • Whether the conciliation of the board can impose a penalty on the farmers or the trader? 


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