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The Farmers Amendment: Bill 2020

The Farmers Amendment Bill 2020

The Ordinance relating to farmers produce trade and commerce passed in both houses of parliament and further sent to the president for his signatures. The motive behind passing this bill is to create a healthy ecosystem where both traders and farmers enjoy the freedom of options relating to the sale and buying of farmers produce which enables remunerative value to the farmers through providing inter and intra state trade for farmers beyond the physicallocation of agricultural product and livestock committee market (APMC). It is also prohibited by the state government to levy market fees, cess or taxes outside APMC areas

Which Bill this Farmer Amendment Repeal?

The September amendment in this farmers produce, Trade and Commerce Bill, 2020 brought major changes in this bill. It has repealed the ordinance promulgated on the 5th of June 2020. This amendment brought different views by the amendment.

Key Features of this farmers amendment

The following are the key features of this bill:

Market fee abolished

This new law restricts the state governments from levying any tax and market fees, cess on any traders, farmers or an electronic trading platform for the farmers produce initiated in an “outside trade area”.

Trade of farmers produce

This ordinance has facilitated an inter and the intra state movement for trading the produce of the farmers outside the physical premises of the market committees formed under the state of APMC Acts. Such trades can be initiated at any place collection; production and aggregation of the farmers produce which also includes cold storages, warehouses, farm gates, factory premises and silos.

Electronic trading

This law only allows electronic farming for the schedule’s farmers produce (APMC act have jurisdiction over that agricultural produce) is the mentioned trade area. Overall, the electronic transaction and trading will further facilitate the online and direct selling of the buying of the agricultural produce through an electronic medium. The entities which are allowed to establish to operate these platforms are partnership firms, companies or any registered society, at last, any agricultural cooperative society.

Dispute resolution in the farmers amendment

In the new ordinance, if any dispute arises out in respect of any transaction between traders and farmers the parties in the dispute may seek a mutually acceptable solution through the method of conciliation by filing an application of conciliation to the Sub-Divisional Magistrate who shall future refer the dispute to the board of conciliation appointed by him.

The member of the conciliation board shall consist of one chairperson and not less than 2 members and not more than 4 members. Further, if the dispute is not able to be resolved within 30 days, either of the party may approach the Sub-Divisional Authority for settlement. The Sub-Divisional authority shall pass an order within the 30 days of date of filling. Moreover, a penalty can also be imposed on either of the liable party.

Any party who has been aggrieved by the order of Sub-Divisional Authority may appeal to the Appellate Authority within 30 days of such order,

Doubts raised due to the farmers amendment bill

This bill has raised doubts in the mind of many people; they tend to believe that procurement of the farmer’s produce will stop. Moreover, if the farmers produce is sold outside APMC markets, they will stop working. These doubts and issues face by the farmers all over the country. The doubt is also raised with respect to the government’s new electronic trading portal such as e-NAM.

Clarification provided by the government in the farmers amendment

The government has clarified in their press release that the procurement of the produce at Minimum Support Price[1] (MSP) will continue and the farmers will be allowed to sell their produce at the minimum support price. Further, the mandi system in India will not stop functioning, trading will be the same as it was before. The only addition is this bill is that now the farmers have the opportunity to sell their agricultural produce in other places in an addition to a mandi system. The central government has also clarified that e-NAM the electronic payment portal will continue in the mandi system. The electronic system will result in time-saving and greater savings.

The Penal provision in the farmers amendment

Any person who does any act which contravenes the provision or the rules under this bill shall be liable to pay a penalty which must not be less than twenty-five thousand but can be extended to five lakh rupees. On the other hand, any person who controls, operates or own electronic transaction and trading contravenes any rules under the bill will be liable to pay a penalty not less than fifty thousand and must not extend Rs. One lakh, and if the contravention continuous, a penalty of not exceeding 10,000 per day.

Concluding the farmers amendment bill


The motive behind passing The Farmers Produce Trade and Commerce Bill, 2020 to create a healthy ecosystem where both traders and farmers enjoy the freedom of options relating to the sale and buying of farmers produce which enables remunerative value to the farmers through providing inter and intra state trade for farmers beyond the physical location of agricultural product and livestock committee market (APMC). However, the farmers have many doubts and speculations regarding this bill, but the government has cleared its notion that this legislature will only benefit the farmers. The next one to two years will be crucial as it will evident that if the bill is proved to be a boon for the farmers on the bane.

Read our article:What are the Guidelines for the Promotion of Farmer Producer Organization?

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Rajdeep Saini

Rajdeep is a law graduate from Guru Gobind Singh Indraprastha University. During his law school he gained vast experience in corporate and commercial law. He likes traveling and performing stand-up comedy.

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