Satinder Singh (Advocate)
“The Essential Commodities (Amendment) Act, 2020” & “The Essential Commodities (Special Provisions and Punjab Amendment Act), 2020”
“The Punjab Bill, 2020 forbids punitive action against the wrongdoers, provided under section 7 for violation of section of 3 of Essential Commodities Act, who would flout the orders of the Government under famine, price rise, natural calamity or any other situation.”
The Essential Commodities (Amendment), Act 2020 contains only 3 sections whereas the Essential Commodities (Special Provisions and Punjab Amendment) Bill contains 8 sections. Section 2 of the Amendment Act, 2020 is important and vital since it puts conditions on the Central Government to control production, supply distribution etc, of essential commodities only under extra ordinary circumstances which is a sincere effort towards minimum governance for the best administration.
Section 2 (1A) (a) of the Essential Commodities (Amendment) Act, 2020 covers the supply of foodstuffs regulation only under extraordinary circumstances which may include war, famine, extraordinary price rise and natural calamity of grave nature.
Section 2(1)(b) says. “Any action on imposing stock limit shall be based on price rise and an order for regulating stock limit of any agricultural produce may be issued under this Act only if there is hundred percent increase in the retail price of horticulture produce or fifty percent increase in the retail price of non perishable agricultural food stuff
The above stated clause, of action on imposing stock limit based on “Fifty percent increase in the retail price of non perishable agricultural food stuff,” empowers the Government to invoke the provisions of Essential Commodities Act so as keep the demand and supply intact and under control. The present clause gives the relief to the consumers and tough time to the wrongdoers.
Section 2 of the Amended Act has been accepted by Punjab Vidhan Sabha inserting the proviso at the end of this section saying “Provided that the state of Punjab shall have the power to order, provide, supply, distribution, imposing, stock limits under extraordinary circumstances which may include famine, price rise, natural calamity or any other situation.”
While accepting the vital section and relevant Section 2 of the Central Act, the Punjab Bill 2020 provides a rider in the section 5 of the Bill stating “status quo as on 4th June, 2020 shall be maintained qua the provisions of the Punjab Agricultural Produce Markets Act, 1961 and further affirmed that “no punitive actions shall be taken against any person for violating the provisions of Central Act.”
Moreover, Section 6 of the Bill passed by Vidhan Sabha says that the state Government, from time to time, will issue such directions as it may deem fit for giving effect to the provisions of this Act which is duty of the authorities to comply with. Meaning thereby, the Government has powers to regulate and control production, supply, and distribution of essential commodities in relation to foodstuffs only under extraordinary circumstances as stated above under this Act.
Interestingly, the Punjab Bill, 2020 forbids punitive action against the wrongdoers, provided under section 7 for violation of section of 3 of Essential Commodities Act, who would flout the orders of the Government under famine, price rise, natural calamity or any other situation.”
“The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020” & “The Farmers Produce Trade and Commerce (Promotion and Facilitation) (Special Provisions And Punjab Amendment), Bill, 2020”
“The Punjab introduced insertions, deletions and additions while accepting most of the sections and provisions of the Central Act, 2020.”
“The Punjab Bill limits MSP only to Wheat and Paddy and has left other agricultural produce on which the Centre Government announces the MSP from time to time.”
“Section 8 of the Punjab Bill provides Punishment for three years for violation of the MSP”
“Agricultural Produce Market Committee” will continue to function within their physical boundaries under respective State APMC Act and can continue to levy market fee and cess under their Act.”
“Punjab Bill covers the whole state of Punjab under Market fee or cess causing loss to the farmers income.”
The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 is a complete Act having 20 sections whereas The Farmers Produce Trade and Commerce (Promotion and Facilitation) (Special Provisions And Punjab Amendment), Bill, 2020 contains 11 sections.
“The Bill passed by the Punjab Vidhan Sabha introduced insertions, deletions and additions while accepting most of the sections and provisions of the Central Act, 2020.”
Through Section 3 of the Central Act, 2020, trading channel has been facilitated “as an additional channel” for farmers to sell agricultural produce in a trade area, so that farmers can get better prices for their produce. “The farmers will have freedom of choices to sell their produce either in APMCs or Trade Area.”
The Section 2 (a) of the Punjab Bill defined the meaning of “Minimum Support Price” as the price announced for crop purchases by the central government in consultation with the Commission for Agricultural Costs and Prices in so far as it relates to wheat and paddy alone.
The Punjab Bill limits MSP only to Wheat and Paddy and has left other agricultural produce on which the Centre Government announces the MSP from time to time.
Section 4 of the Punjab Bill says that no sale or purchase of wheat and paddy shall be valid unless the price paid for such agricultural produce is equal to, or greater than the MSP announced by the Central Government for that Crop. Section 8 of the Bill provides Punishment for three years for violation of the MSP.
It is important to know the meaning of ‘Trade area”, repeatedly used in the Central Act, to understand the fundamental concept which is additional channel for farmers to sell their agricultural produce in addition to yards of APMC.
It is defined under section 2(m) of the Central Act, 2020 which says, “trade area means any area or location, place of production, collection and aggregation including –farm gates, factory premises, warehouses, silos, cold storages or any other structure or places from where trade of farmers produce may be undertaken in the territory of India.”
Later Part of Section 2(m) of the Central Act specifically mentioned that “Trade area” does not include physical boundaries of Principal market yards, Sub-market yards managed and run by the Market committee formed under State APMC Act in force.
It means that “APMC Act i.e. Agricultural Produce Market Committee” will continue to function within their physical boundaries under respective State APMC Act and can continue to levy market fee and cess under their Act.
Section 6 of the central Act, 2020 says, “No market fee or cess whatever name called under any state APMC Act or any other state law shall be levied on farmer, trader or electronic trading and transaction platform for trade and commerce in schedules produce in a trade area.
Section 9 of the Punjab Bill, is the most disturbing factor passed by Punjab Vidhan Sabha, which says that, “the State may, from time to time notify a fee which shall be levied on a corporate trader and/or on the electronic traders and transaction platform for trade and commerce “in a trade area” outside the markets established and regulated under the Punjab Agricultural Produce Market Act, 1961.”
Meaning thereby the central Act is against the levy of market fee or cess in a trade area, by whatever name called to promote barrier-free intra-state and inter-state trade whereas the Punjab Ordinance say to levy the fee on a trader, electronic trading and transactions platforms for trade in a trade areas even outside the markets established and regulated under the Punjab Agricultural and regulated under the Punjab Agricultural Produce Markets Act,1961,”thereby covering whole state of Punjab under Market fee or cess causing loss to the farmers income.”
Section 8 of the Central Act has introduced a simple, easy, low cost and time bound dispute settlement system. Farmers and traders can settle their disputes within 30 days through a settlement board in a cordial environment which will be binding on both sides. The sub-division authority will settle the dispute within 30 days and can order recovery of due amount from trader/buyer apart from suspending him from trading for a duration in addition to imposing a penalty up to Rs 5 lakh for contravention of provision.
Interestingly, Section 7 (2) of the Punjab Bill provides that no punitive action shall be taken against any person for violating the provisions of Central Act.
The Central Act, as per Section 15, barred the Civil Court jurisdiction to entertain any suit or proceedings in respect of any matter, the cognizance of which can be taken by any authority empowered under this Act.
Section 6 of the Bill substituted section 15 of the Central Act thereby empowered powers to Civil Courts in addition to SDM or DC/ Joint Directors to farmers. “The meaning of giving powers to civil courts to run the farmers grievance, as per Civil Procedure Code, 1908 is providing a lengthy ,time consuming and exhaustive process.”
The Provisions of the Act leads towards one nation, one license thereby smoothing the process of Trade and Commerce of Agricultural produce.
Salient Features of the Act
- Section 3 – Freedom to conduct trade and commerce in a trade area: Any farmer or trader or electronic trading and transaction platform shall have the freedom to carry on the inter-State or intra-State tradeand commerce in farmers’ produce in a trade area.
- Section 4 – Trade and commerce of scheduled farmers’ produce:
(a) Any trader may engage in the inter-State trade or intra-State trade of scheduled farmers’ produce with a farmer or another trader in a trade area.
(b) Trader who transacts with farmers shall make payment for the traded scheduled farmers’ produce on the same day or within the maximum three working days.
- Section 6- Market fee under State APMC Act, etc., in the trade area: No market fee or cess or levy under any State APMC Act or any other State Law shall be levied for trade and commerce in scheduled farmers’ produce in a trade area.
- Section 7 – Price Information and Market Intelligence System: Central Government may develop a Price Information and Market Intelligence System for farmers’ produce and framework to disseminate information relating to the stated.
- Section 8 – Dispute Resolution Mechanism for Farmers: In the incident of any dispute arising between the farmer and trader with respect to a transaction, parties may seek a mutually acceptable solution through conciliation by filing an application to the Sub-Divisional Magistrate, who will further refer the dispute to a Conciliation Board.
- Section 9 – Suspension or cancellation of the right to operate in electronic trading and transaction platform: The Agriculture Marketing Adviser, Directorate of Marketing and Inspection, Government of India or an officer of the State Government may on its own motion or on a petition or reference from any Government Agency take cognizance of any breach of the procedures, norms, manner of registration and code of conduct or any breach of the guidelines for fair trade practices by the electronic trading and transaction platform.
The Farmers (Empowerment And Protection) Agreement on Price Assurance And Farm Services Act , 2020” & The Farmers (Empowerment And Protection) Agreement on Price Assurance And Farm Services(Special Provisions And Punjab Amendment) Bill, 2020.
“Central Act provides for a farming agreement between a farmer and a buyer prior to the production or rearing of any farm produce”
“Farming agreement must provide for a conciliation board as well as a conciliation process for settlement of disputes”
“Punjab Bill provides that no punitive action for violating the provisions of Central Act against any buyer who has entered into a farming agreement with the farmer”
“Punjab Bill empowered Civil Courts in addition to SDM or DC/ Joint Directors to farmers arbitration thus making the process lengthy, time consuming and exhaustive”
The Farmers (Empowerment And Protection) Agreement on Price Assurance And Farm Services Act , 2020 is complete Act having 25 Section Whereas The Farmers (Empowerment And Protection) Agreement on Price Assurance And Farm Services(Special Provisions And Punjab Amendment) Bill, 2020 contains 11 sections.
The Bill passed by Punjab Vidhan Sabha introduced “insertions, deletions and additions while accepting most of the sections and provisions of the Central Act, 2020.”
Section 2(a) of the Central Act, 2020 defines and clears the regulation of the (Punjab State) APMC Act in the same manner as it is acting till date. It says APMC yard means the physical premises covering agricultural Produce Market Committee yard by whatever name called and established for regulating markets and trade in farming produce under any State Act.
Section 2 (1) (a) of the Punjab Bill defined the meaning of “Minimum Support Price” as, “the price announced for crop purchases by the central government in consultation with the Commission for Agricultural Costs and Prices in so far as it relates to wheat and paddy alone.”
The Punjab Bill limit MSP only to Wheat and Paddy and has left other agricultural produce on which the Centre Government announces the MSP from time to time.
Section 4 of the Punjab Bill says that no sale or purchase of wheat and paddy shall be valid unless the price paid for such agricultural produce is equal to, or greater than the MSP announced by the Central Government for that Crop. Section 8 of the Bill provides Punishment for three years for violation of the MSP.
Section 3 of the Central Act provides for a farming agreement between a farmer and a buyer prior to the production or rearing of any farm produce. The minimum period of an agreement will be one crop season, or one production cycle of livestock. The maximum period is five years, unless the production cycle is more than five years. Section 3(2) provided that “no farming agreement shall be entered into by a farmer in derogation of any rights to sharecropper.”
Section 4 of the Central Act provides for the price of farming produce should be mentioned in the agreement. For prices subjected to variation, a guaranteed price for the produce and a clear reference for any additional amount above the guaranteed price must be specified in the agreement. Further, the process of price determination must be mentioned in the agreement.
Section 13 of the Central Act dedicated to the Dispute Settlement which says that a farming agreement must provide for a conciliation board as well as a conciliation process for settlement of disputes. The Board should have a fair and balanced representation of parties to the agreement. At first, all disputes must be referred to the board for resolution.
Section 14 of the Central Act says if the dispute remains unresolved by the Board after thirty days, parties may approach the Sub-divisional Magistrate for resolution. Parties will have a right to appeal to an Appellate Authority (presided by collector or additional collector) against decisions of the Magistrate. Both the Magistrate and Appellate Authority will be required to dispose of a dispute within thirty days from the receipt of application. The Magistrate or the Appellate Authority may impose certain penalties on the party contravening the agreement.
Section 14(2)(iii) provides where the default by the farmer is due to “force Majeure” i.e. any unforeseen external event, including flood, drought, bad weather, earthquake, epidemic outbreak of disease, insect –pests and such events which is unavoidable and beyond the control of farmer then “no order for recovery of amount shall be passed against the farmer.”
Section 15 of the Central Act provides that no action can be taken against the agricultural land of farmer for recovery of any dues.
Interestingly, Section 7 (2) of the Bill passed by Punjab Vidhan Sabha provides that no punitive action shall be taken against any person( who might be sponsor(buyer) who has entered into a farming agreement with the farmer for violating the provisions of Central Act.
The Central Act, as per Section 19, barred the Civil Court jurisdiction to entertain any suit or proceedings in respect of any matter, the cognizance of which can be taken by any authority empowered under this Act. Section 5 of the Punjab Bill substituted section 19 of the Central Act thereby empowered powers to Civil Courts in addition to SDM or DC/ Joint Directors to farmers. The meaning of giving powers to civil courts to run the farmers grievance, as per Civil Procedure Code, 1908 is providing a lengthy, time consuming and exhaustive process.
Section 23 of Central Act is having specific provision for the State to make rules for carrying out this provision of the Central Act.
The Experts say that the Central Act will reduce marketing costs and double the farmer’s income. It has been introduced in order to transfer the risk of market unpredictability from the farmer to the sponsor.
Salient Features of the Act
- Facilitates written farming agreement to be entered into in respect of a farming produce, except where such agreement derogates the rights of a sharecropper;
- The conditions for performance of farming agreement, including compliance with mutually acceptable quality, grade and standards of farming produce;
- Lays down pricing of farming produce;
- The manner of delivery of farming produce;
- Exempts the farming produce under a farming agreement from the application of a State Act regulating the sale and purchase of such farming produce and also from the provisions of the Essential Commodities Act, 1955 (10 of 1955) and the control orders made there under
- Prohibits the sponsor from acquiring ownership rights or making permanent modification on farmers’ land or premises;
- The Sponsor to ensure timely acceptance of delivery and payment for such farming produce;
- Linkage of farming agreement with insurance or credit instrument;
- Establishment of Registration Authority to provide for e-registry and for registration of farming agreements
- Conciliation and dispute settlement mechanism for settlement of disputes under the farming agreement.
Section 3 of Essential Commodities Act (Amended Up to Date)
- Powers to control production, supply, distribution, etc., of essential commodities. If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, or for securing any essential commodity for the defence of India or the efficient conduct of military operations, it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.
- Notwithstanding anything contained in sub-section (1)
(a) The supply of such foodstuffs, including cereals, pulses, potato, onions, edible oilseeds and oils, as the Central Government may, by notification in the Official Gazette, specify, may be regulated only under extraordinary circumstances which may include war, famine, extraordinary price rise and natural calamity of grave nature;
(b) Any action on imposing stock limit shall be based on price rise and an order for regulating stock limit of any agricultural produce may be issued under this Act only if there is–
(i) Hundred per cent increase in the retail price of horticultural produce; or
(ii) Fifty per cent increase in the retail price of non-perishable agricultural foodstuffs.
Provided that such order for regulating stock limit shall not apply to a processor or value chain participant of any agricultural produce, if the stock limit of such person does not exceed the overall ceiling of installed capacity of processing, or the demand for export in case of an exporter:
Provided further that nothing contained in this sub-section shall apply to any order, relating to the Public Distribution System or the Targeted Public Distribution System, made by the Government under this Act or under any other law for the time being in force
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