Thread by @Bhairavi_Jani

Since there was an overwhelming demand for me to be specific & share what changes are warranted in the Farm reforms I am putting this thread out. I will be objective & share what works & what doesn’t. I agree that we need agri reforms but these loopholes need to be addressed. 1/n

I would like to begin with The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act 2020. Guidelines for Farming Agreement. The link to the full text is given below 2/n

agricoop.nic.in/sites/default/…

Section 1 Farming Agreement - lays clearly and simply the need and purpose of an agreement between farmer/FPO and buyer and the relevant act that governs it. But calls the buyer a “Sponsor”. This is surprisingly not so in the act but in this guideline buyer becomes a sponsor 2/n

Section 2 General Conditions for Framing the Farming Agreement - the section lays out guidelines for drafting of agreement. point 2.4 states “the farmer should read the agreement or have the agreement read over and explained to him by an appropriate independent third party. 3/n

How is small farmer supposed to determine who this appropriate third party is? Who will protect a farmer’s interest if such a party was compromised by the buyer? There is no appropriate support GOVT will provide for this. 4/n

The same point further states: he may also seek advice of a legal advisor on the agreement before signature. I wonder how a poor farmer in a small village will access such legal advisors. Whereas a corporate buyer will have access to one. This is first issue of inequality 5/n

Also why in the language of the government a farmer is always a “He”. I don’t seem to find any reason for that. More importantly the agreement cites the buyer as a “Sponsor”. Sponsor for what? Why is a buyer a sponsor? Are we sponsors for companies whose products we buy? 6/n

Section 3. Purpose of the farming agreement. It lays out simply the purpose & is quite clear.
Section 4. Period of the farming agreement. 4.1-2 says farming agreement can by made for a max of 5 yrs unless crop cycle is longer. Why should this be at 5 yrs. No logic provided. 7/n

Section 5. Supply of inputs by the sponsor. The points in this section list type of inputs & modalities of their delivery to the farmer. Even though good points here but the vagueness of who determines the inputs are right for the crop may lead to dispute. 8/n

Section 6 Use of Inputs by Farmer/FPO 6.1 asks the farmer to notify the sponsor in writing if inputs have defects. How is a farmer to determine defect. For eg if it was an organic spray or crop medicine will farmer know it has defect? Who will help the farmer to write back 9/n

Section 7. Promotion of Awareness of farmer/ FPO for quality production. This section is important & simply drafted. But such awareness can be done to the advantage of the sponsor. it should be Block Development Office that conducts awareness in partnership with institutions 10/n

Section 8. Production of Farming Produce by the Farmer/FPO. 8.3 says that visits by sponsor’s reps to the farm must coincide with normal business hours. I would request the Govt to pray tell me what are normal business hours on a farm? And are they same across the country 11/n

Section 9. Inspection of the farming produce. This section is clear and concise. 12/n

Section 10. Delivery of farming produce. 10.8 says that in the event of a rejection sponsor can inform the reasons to the farmer and farmer can get a 3rd party to assess.This 3rd party could be certified assayer, KVK, seed agency or a scientist. 13/n

Point 10.8 is devoid of realism & farmers are not wrong in presuming that the GOVT wants to give option to set a standard, inspect against it and accept or reject to the buyers only. How is a small farmer going to access these 3rd parties if there is a rejection? 14/n

Section 11 Grades and Standards of produce. 11.1 says sponsor should promote awareness of standards and grades. Who determines what standards are these. Why would a sponsor know them best? Perhaps the BDO can be assigned this task as the sponsor is an interested party 15/n

Section 12. Pricing Mechanism gives simple mechanism & examples. 12.1 says a min guaranteed price must be provided in the agreement. And gives several options for consideration of price reference. The farmer is guaranteed min price even if market price is lower. 16/n

This is to farmer’s advantage. In case of smaller farmers the agreement can be done at a very low min guaranteed price & the onus will be on the farmer to ensure he/she has knowledge of current market prices. GOI may consider an independent way to provide this information. 17/n

Section 13. Sale of farming produce by the farmer to the sponsor. 13.6 says farmer should not deliver produce not grown on their farm but how will a buyer check this. There is a gap here in how this can be enforced on the ground. 18/n

Section 14 Payment of Sales proceeds 14.1 says sponsor should make payment on day of delivery of produce. Why not an advance or 7 days later? This must be left to be agreed between seller & buyer. The GOI in interest of farmers may suggest that it may be no later than X days.19/n

Section 15. Availing Credit and Insurance. Pretty clear and simply laid. What it misses is claim settlement guidelines. Small farmers like grazers whose sheep are eaten by protected wild life may suffer delays in claim settlement. 20/n

Section 16. Ownership Rights of Sponsor on Farmer’s FPO assets. Firstly this is worded wrong. It should have ideally been Farmer’s ownership rights. The section clearly says the sponsor has no right on farmer’s land. And protects farmer’s ownership. But in 16.7 21/n

There is an issue. It says farmers should not opt for selling or changing the ownership of land while in agreement with sponsor. Why? It’s like saying I am selling my product to a retail store and so I can’t sell my factory to someone. Strange. 22/n

Section 17. Force Majeure. Who determines what is a force majeure event on a farm. And what happens if the company declares force majeure & the farmer has then no recourse. For eg a company based in noida can declare force majeure & inform farmers in Bihar village 23/n

Then what recourse do those farmers have ? Since the guideline says the obligations may remain suspended. The option suggested is a renegotiation or termination of the agreement. And pray tell what would the farmer then do with their produce ? 24/n

Section 18. Breach of Agreement lays down different clauses in the event of a contractual breach. But how will small farmers in remote villages anticipate a breach or write and notify the breaching party - their buyer ? How? Some thought needs to be applied to this. 25/n

Section 19. Termination of farming agreement - pretty straight forward and clear. 26/n

Section 20. Dispute resolution. This section is where a major issue lies. As per the section III of the act the Appellate authority’s orders are final. And if a farmer or buyer wants to challenge they must then go to an officer of the rank of Joint secretary to the GOI 27/n

The role of SDM resolving the dispute at local level understandable. But that final authority to an Appellate is unwarranted. Why shouldn’t the parties of a farming agreement have the same recourse that consumers do thru a consumer court & investors do thru SEBI. 28/n

Where if the aggrieved party wants to challenge a judicial process is available- leading up to the Supreme Court. 29/n

Section 21 Miscellaneous lists additional general points.

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