Hindu editorial analysis- State vs. Center on Farm bills

Analysis of Hindu Editorial dated October 24, 2020

Center and States flex their muscles on the contentious farm laws

States now confronting the Center’s action through both legislative and legal action

For the policy makers, liberalizing the farm sector had always been an important part of the reforms agenda. The Modi government steamrolled all opposition from the opposition parties and farmer organizations and enacted the sweeping laws in the parliament, portraying them as path-breaking, pro-farmer reforms. Many renowned economists have argued that the long term ramifications of the reforms are expected to be benign for the farming community and the economy at large. However, the interest of the small and marginal farmers could be badly hit with the implementation of the laws. The farmer lobby g now cries hoarse about the new laws and has gone hammer and tongues against the Center’s hurriedly-pushed initiatives.

Quite understandably, the impact on the small and marginal farmers will be too hard to endure, and this is why the farmer bodies clamor for certain safeguards to stop predatory practices by the MNCs, who would be empowered to buy and trade in agricultural produce after the new laws are enacted. The Center is unwilling to cede to such requests from the farmers. It’s quite apparent that what suits the large farmers is not what serves the small and marginal ones. The government never seriously thought about incorporating safeguards in the farm laws that could insulate the small farmers against profit-driven MNCs, who will deal with the small and vulnerable farmers.

Punjab, considered the granary of the country for its lion’s share in farm harvests has seen unprecedented rage and indignation by farmer organizations. The Akalis, traditional allies of the BJP, had to severe their relations with the center to assure the farmers that their party would stand by them in this crisis.

The Congress-led government in Punjab has moved quickly to bring a bill that has provisions to nullify some aspects of the Central legislation considered obnoxious by the farmers. The State government cites the 2015-16 agricultural census as per which 86.2% of the country’s farmers have land holdings smaller than five acres. In fact, a majority of them have just about two acres per family. A small farmer obviously can’t transport his produce to the best-paying private buyer whose purchase office could be quite far away from his place. So, logistical difficulties would constrain the small farmers with relatively smaller quantities of saleable commodities from picking and choosing the highest-paying buyer. As a result, he would approach the nearest private buyer who could exploit his vulnerability to offer a less than fair price. The private buyer could force him to sell at less than the Minimum Support Price (MSP), and even delay his payment or adopt other coercive means to weaken the farmer’s bargaining power.

The bill brought by the Punjab government tries to preempt such situations by making a delinquent private sector buyer liable for imprisonment up to three years, if he is found to be indulging in exploitative practices. No doubt, this is a deterrent clause of the bill. The State bill also overturns the Center’s move to abolish the fees on trade and transactions that take place in markets outside the APMCs.

The Punjab government’s legislation is likely to be followed by similar ones by Rajasthan and other Congress-ruled states. The issue that begs an answer is whether such State legislations can stand against the one passed by the Center.  It is clear that the whole matter will be caught in a legal quagmire. The Punjab government maintains that agriculture falls under the Seventh schedule of the Constitution, and so, enacting laws pertaining to agriculture comes fully under the domain of the States.

 

The Center has taken a very different stand on its constitutional authority to enact a law like the present one. It has used its power under section 33(b) of the Concurrent List that allows it to frame laws dealing with the trade and commerce in, and production, supply and distribution of ‘foodstuffs’.  It’s apparent that the Center has stretched the provisions under section 33(b) to enact laws in the domain of agriculture.  It’s a questionable overreach of Parliament’s authority vis-à-vis States’ legislative authority.

It is worth remembering that the Punjab laws duly passed by the State Assembly would still require assent from the President because of the fact that certain parts of it are in opposition to the Center’s farm laws.

Since the legal position looks a bit foggy on the issue of authority to enact laws, a possible recourse could be to approach the Supreme Court for clarification. The Chhatisgarh government is already mulling over this possibility. But, a long legal battle is on the cards, and the Center can’t escape blame for riding roughshod over States’ concerns and using its brute parliamentary authority to pass laws with little consultation with the stake holders.

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