Farmer’s Produce Trade and Commerce Bill 2020 | UPSC

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Farmer's Produce Trade and Commerce Bill 2020 | UPSC

Farmer’s Produce Trade and Commerce Bill 2020 | UPSC


Parliament passes The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020

      WHY IN NEWS:

Full protection has been ensured to farmers in these legislations; Hon’ble PM has himself assured that procurement at MSP will continue – Union Minister of Agriculture & Farmers’ Welfare Shri Narendra Singh Tomar

MINISTRY? :- Ministry of Agriculture & Farmers Welfare


For PRELIMS go through the factual merit data in the bills. Example : status of e-NAM , Mandis etc.

For MAINS look at the main features and the drawbacks in the bill . We will cover this in our next Editorial Hunts.


Parliament today passed two bills aimed at transforming agriculture in the country and raising farmers’ incomes.


  • The government claims the legislations will transform the sector and raise farmers’ income.
  • The Centre had promised to double farmers’ income by 2022.

It says the Bills will make farmers independent of government-controlled markets .

  • This will also fetch them a better price for their produce.



  • The new legislation will let farmers and traders enjoy freedom of choice of sale and purchase of agri-produce.
  • It will also promote barrier-free inter-state and intra-state trade commerce .
  • The physical premises of markets notified under State Agricultural Produce Marketing legislations.

The farmers will not be charged any cess or levy for sale of their produce and will not have to bear transport costs.

  • The Bill also proposes an electronic trading in transaction platform for ensuring a seamless trade electronically.
  • In addition to mandis, freedom to do trading at farmgate, cold storage, warehouse, processing units etc.
  • Farmers will be able to engage in direct marketing thereby eliminating intermediaries resulting in full realization of price.


  • Procurement at Minimum Support Price will stop

If farm produce is sold outside APMC mandis, these will stop functioning

  • What will be the future of government electronic trading portal like e-NAM


  • Procurement at Minimum Support Price will continue, farmers can sell their produce at MSP rates.
  • The MSP for Rabi season will be announced next week

Mandis will not stop functioning, trading will continue here as before.

  • Under the new system, farmers will have the option to sell their produce at other places in addition to the mandis
  • The e-NAM trading system will also continue in the mandis
  • Trading in farm produce will increase on electronic platforms.
  • It will result in greater transparency and time saving.

Farmer's Produce Trade and Commerce Bill 2020 | UPSC



  • The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field.
  • Price assurance to farmers even before sowing of crops.
  • In case of higher market price, farmers will be entitled to this price over and above the minimum price.

It will transfer the risk of market unpredictability from the farmer to the sponsor.

  • Due to prior price determination, farmers will be shielded from the rise and fall of market prices.
  • It will also enable the farmer to access modern technology, better seed and other inputs.
  • It will reduce cost of marketing and improve income of farmers.
  • Effective dispute resolution mechanism has been provided for with clear time lines for redressal.
  • Impetus to research and new technology in agriculture sector.


  • Under contract farming, farmers will be under pressure and they will not be able to determine prices
  • How will small farmers be able to practice contract farming, sponsors will shy away from them.

Understanding the new system will be a problem for farmers.

  • In case of dispute, big companies will be at an advantage.


  • The farmer will have full power in the contract to fix a sale price of his choice for the produce.
  • They will receive payment within maximum 3 days.
  • 10000 Farmer Producer organizations are being formed throughout the country.

These FPOs will bring together small farmers and work to ensure remunerative pricing for farm produce

  • After signing contract, farmer will not have seek out traders.
  • The purchasing consumer will pick up the produce directly from the farm.
  • In case of dispute, there will be no need to go to court repeatedly.
  • There will be local dispute redressal mechanism.

      IASbhai WINDUP: 

Farmers Bill 2020

  • Farmer leaders are alleging that the legislations will dismantle the existing system and leave them to the mercy of corporate interests.
  • The bill could not cover the issues related to farmer suicide.

Farmers say that the upper hand of agri-businesses and big retailers in negotiations, putting them at a disadvantage.

  • The benefits for small farmers from companies are likely to reduce the engagement of sponsors with them.
  • The farmers also fear that the companies may dictate prices of the commodities.
  • Our agriculture sector is in desperate need of latest technology that assists the industrious farmers.

The issue still remains the same- Who will guarantee the MSP outside ‘Mandi’ !

     SOURCES:THE HINDU & PIB | Farmer’s Produce Trade and Commerce Bill 2020 | UPSC


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