Farm Trade Ordinance & Punjab’s Opposition

Why in news?

Punjab is opposing the Centre’s Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance.

Why Punjab is opposing the Ordinance?

This Ordinance may end the state’s Agriculture Produce Market Committee (APMC) Act, which was amended in 2017.
This Ordinance is opposed on the pretext that it will privatise the entire sale/purchase system and will end the MSP regime.

What is the difference?

As per the state’s APMC Act, only a licence holder from the government after meeting the provisions laid under this Act can do trade.
As per the Centre’s ordinance, no licences are required and any PAN cardholder can do trade.

Where can trade be done?

As per the state’s APMC Act, trade will be allowed in both,
1. State-owned mandis under Punjab Mandi Board (PMB) and
2. Private mandis allowed under the amended Act.
In private mandis, trade is allowed in the government-notified yards.
The PMB charges a fee/cess that is used for the development of the mandis and the rural areas.
As per the Centre’s ordinance, trade can be done at any place.
Also, farmers can sell their product anywhere in the country.

What type of private market committees can be set up under the state Act?

Apart from the mandis under PMB across the state, there is a provision of setting up of private market yards demarcated by the government.
These mandis can be owned by the private players.
The owners of these private yards and their relatives cannot trade but only operate these mandis.
The government will have full control over these mandi.
Taxes and other duties decided by the government will be levied on the sale and purchase of farmers’ produce.
Centre’ ordinance, however, has no such provision.

What if there is a high fluctuation of prices?

As per state Act, there is a provision of setting up of ‘Price Stabilisation Fund’ by the government.
This fund can be utilised to facilitate farmers in case of high fluctuation of the crop prices.
There is no such provision under the Ordinance.

What about the market fee/cess charged by the PMB?

The state APMC Act says that cess/fee would be levied on sale/purchase in the notified private market yards.
There is no such provision in the Ordinance.

What are the provisions regarding payment to farmers?

The State APMC makes the provision that farmers will be paid for selling their products within 48 hours.
The sale/purchase is regulated by the government because only licence holders can do trade in such mandis.
If the trader fails to pay the farmer on time, the matter can be resolved by presenting the case to PMB’s Market Committee or to the Secretary, Agriculture.
The concerned Deputy Commissioner (DC) also has the power to sell any property of the trader to pay the dues of farmers.
Finally, the matter can also reach the court for settlement.
As per the Centre’s ordinance, the farmers will be paid either on the same day or within 3 working days.
If a trader does not pay, the matter can be resolved by presenting their respective case to SDM or DC.
There is no provision for taking the matter to court.

What is the status of e-trading?

How big companies can enter the trade of crops, food processing?

The state government had introduced a Unified Licence System, so that big food processing companies to take steps in the interest of farmers.
As per the ordinance, there is no need for a licence for big companies.
Farmers are specifically against this provision.

What would happen to the MSP regime?

After the APMC Act was amended, the MSP regime continued in the state as such.
Even now, major agricultural products are brought only in the PMB owned markets where farmers sell on fixed MSP.
It seems like the provisions of the ordinance may end the MSP regime.

Source: The Indian Express