In 1947, after the independence, the farmers used to sell their agricultural products to the consumers directly. But the farmers of India were under debt due to the Zamindari System. The famers who had taken loans had to repay with the higher interest rates.
The money lenders used to charge high interest rates for the debts taken by them. Money lenders used to buy products at a very cheap rate from the farmers who failed to repay their debts with the interest rates. And then for the next time farmers again had to take loan from the money lenders to grow the crops. And this became a never ending cycle from which farmers were not able to come out. Through this continuous process of give and take, farmers were exploited very much.
Steps taken by Government to solve the problem of Farmers Exploitation.
To solve the problem of this exploitation and to save the farmers, the government intervened and introduced Agricultural Produce Market Committee (APMC) Act. According to this the farmers are not allowed to sell their products directly to any consumer and anyone can purchase from them directly. All the sales will be done through Mandi only. Mandi’s got recognition from the APMC Act and are run by the state government.
Every state has its own mandi. Each area in a state has its own mandi. If any trader has to buy the products from the Mandi then he has to firstly take a license of that Mandi he wants to trade in. Same is the case with the farmers. They are also allowed to sell their products in the Mandi they have license of. This whole system is mandatory for both farmers and traders. The crops are sold through auctions and the minimum selling price is set by the government.
The APMC system has two flaws:
Who can be the trader?
There are so many middle present between the farmers and the consumers. Due to this consumers gets the good at very higher rate and the farmer gets a very low rate.
It can be seen that APMC Act itself exploited the farmers when the main purpose of APMC was to protect the farmers.
It is about to come and some states like Karnataka, Bihar and Maharashtra have already adopted the system from past several years. They have also amended the new law and set the penalty for the traders who buy the products below the minimum selling price and what remunerations should the farmer get?
Why are farmers protesting?
Every state has its own development rate. This is the reason that some states are called poor states and other are called rich states. For the development of the state the states take some funds from their state fund and the rest from the Centre. During redistribution the state gives the poor state more funds than that of rich state. To meet the requirement the state charges tax on the mandi’s. Highest tax is levied in the Punjab mandi i.e., 8.5%. This gives the government the chance to use the fund in the development process of the backward areas and sectors.
The farm bills talks about creating a new ecosystem but the tax collected was actually not used for the development purpose. The new system would not be control of the state government any more, so tax will not be levied.
The farmers in different states are protesting to bring the reforms in existing structures of MSP. Framers demand that government should give penalty guidelines for the traders who buy the products below the minimum selling prices.
Can Centre make laws?
The agricultural sector comes under the part of the state list where the state can make the laws. State has the power to make decisions regarding the agricultural research and produce. So, if talk about the strict division then the power is only with the State and not the Centre.
In the contradiction, Article 248 of the constitution says that if there is any entry not listed then the Centre has the power to make the laws for that entry. Article 249 says that if any entry is the part of the State list and the matter is of the National Interest then the Centre has the power to make the rules. Also, entry 33 of the III list, says reduces the power of the state to make laws in the agricultural matter. This means that the Centre has the power to make laws on agricultural purposes as well.