InvestorQ : How do you see the impact of the recent Farm Bill 2020 that got passed in the Rajya Sabha last week by a voice vote? Do you see a positive impact?
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How do you see the impact of the recent Farm Bill 2020 that got passed in the Rajya Sabha last week by a voice vote? Do you see a positive impact?

Answer
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4 weeks ago


There was more of controversy than consensus surrounding the passage of the Farm Bill 2020 with one of the BJP’s oldest allies, the Shiromani Akali Dal, withdrawing support and walking out of the NDA. The fate of the Bill will ultimately depend on the success or otherwise of the farmer protests.

Even as the farmers are on the streets protesting across most of North India, the first signals of the policy impact will be visible when the Kharif output flows into the mandis in October. Apart from the passage of the Farm Amendment Bill 2020 there were also key modifications to the Essential Commodities Act.

The most important aspect of the bill is that it offers farmers an alternate platform to sell their produce apart from the APMC Mandi. Now the APMC mandis will no longer have the sold monopoly to distribute food grains brought in by farmers.

Government has confirmed that while APMCs will function, they have to compete with alternate platforms. That could also mean that the Arhatiyas or commission agents, who were normally the large farmers, would also lose their clout in the chain.

Then there is the issue of Minimum Support Price or the MSP but the prime minister has himself clarified that the MSP system will continue and even topped up his reassurance with a hike in MSPs across the board. But the methodology of MSP in the alternate platform is still not clear.

The Essential Commodities Act has been amended to remove cereals and pulses. Most farmers have called it a sell-out to corporate interests. Whether this new system works will be known when Kharif output starts coming into the markets in mid-October this year.