The Central Government’s Recent Ordinance will prove to be a revolutionary step towards the marketing of agricultural produce in India.
The Central Government has promulgated the Farmers Produce Trade and Commerce (Promotion and Facilitation Ordinance, 2020) on June 5, 2020 under Article 123 of the Constitution (Power of President to promulgate Ordinances during recess of Parliament). The Ordinance has been implemented with immediate effect.
Article 123 provides for the enactment of a law by presidential ordinance when the Parliament is not in session and there is an urgent need to enact a law in view of current Corona crisis.
Due to the emergency situation arisen as a consequence of spread of pandemic caused by Corona visus, new measures for sale of agricultural commodities will be implemented through this Ordinance.
The salient features of the new ordinance are as follows.
1. Comprehensive Definition of Farmers’ Produce
Section 2 of this Ordinance defines Farmers ‘ produce as follows
"farmers' produce" means -
(1) foodstuffs including cereals like wheat, rice or other coarse grains, pulses, edible oilseeds, oils, vegetables, fruits, nuts, spices, sugarcane and products of poultry, piggery, goatery,fishery and dairy intended for human consumption in its natural or processed form
(ii) cattle fodder including oilcake and other concentrates, and
(iii) raw cotton whether ginned or unginned, cotton seeds and raw jute;
It is necessary that these agricultural commodities must have been included in the Scheduled Agricultural Commodities List of the Agricultural Produce Market Committees of the State.
2. Inter-State and Intra State Trade
Provisions of Inter-State and Inter-State Trade are incorporated enabling buyers of farmers’ produce in one state to purchase farmers’ produce from farmers in other states. Apart from this, buyers are already allowed to buy from farmers in the same state.
3.The end of the monopoly of agricultural produce market committees, private markets and direct marketers.
Pursuant to Section 2 Clause (h) of this Ordinance, Individuals, Partnership Firms, Companies, Limited Liability Partnership Firms, Co-operative Societies, Socities and any Associations or body of persons duly incorporated or recognised as a group under any ongoing programmes of the Central Government or State Government, may now trade in farmers’ produce.
4. Trade Area
"Trade area" means any area or location, place of production, collection and aggregation including
a) farm gates;
(b) factory premises;
(c) warehouses;
(d) silos;
(e) cold storages; or
(f) any other structures or places,
from where trade of farmers' produce may be undertaken in the territory of India but does not include the premises, enclosures and structures constituting
(i) physical boundaries of principal market yards, sub-market yards and market sub-yards managed and run by the market committees formed under each State APMC Act in force in India; and
(ii) private market yards, private market sub-yards,direct marketing collection centres, and private farmer-consumer market yards managed by persons holding licenses or any warehouse, silos, cold storage or other structures notified as markets or deemed markets under each State APMC Act in force in India; (n) "trader" means a person who buys farmers' produce by way of inter-State trade or intra-State trade or a combination thereof, either for self or on behalf of one or more persons for the purpose of wholesale trade, retail, end-use, value addition, processing. manufacturing, export, consumption or for such other purpose.
5. Buyers to be PAN holders
It has been made mandatory for the Trader to have a PAN (Permanent Account Number) of the Income Tax account. However, Farmers producer companies and agricultural co-operative societies have been excluded from this provision.
6. Electronic Registration of Buyers
Electronic Registration of Traders is necessary, so that only registered Traders can buy and sell agricultural produce. The Central Government will provide electronic registration system and necessary rules will be framed for this.
7. Price of agricultural commodities to farmers within three days
The most important provision in this ordinance is that under section 4 (3), the buyer must pay the price of agricultural commodities sold by the farmers within three days. It has also been made mandatory for the buyer to give the receipt to the farmers on the same day.
8. Electronic Trading & Transaction Platform
Buyers will set up electronic platforms to conduct the purchase and sale of agricultural commodities in a systematic and transparent manner. For this, the buyer has to prepare the necessary procedure fee, transportation system, quality inspection of the commodity, timely payment of the price of the commodity, transactions to be done with other platforms and all other information and regulations. Also, if necessary, the necessary rules will be framed by the Central Government.
9. No Market Fee
Market Committees are prohibited from charging market fees as per Section 6 on the purchase and sale transactions under this platform. This will help farmers get higher prices for their produce.
10. Mechanism for disseminating information related to agricultural commodities
The task of collecting and disseminating all the information related to agricultural commodities market in the country will be entrusted to an organization under the Central Government. This will help the farmers to sell their produce by choosing suitable Electronic Platforms and to enhance their literacy related to the commodity market. The Central Government has the right to collect the required information from the operator of the electronic platform.
11. Dispute Resolution
Section 8 provides for the settlement of disputes between farmers and buyers during such transactions. For this, the power to appoint a Board of Conciliation has been given to the Sub-Divisional Magistrate. A subordinate officer of the Sub-Divisional Magistrate shall be appointed as the Chairman of the Board. The board has two to four members and the parties to the dispute are given equal representation. If the Board is unable to resolve the dispute within 30 days, the parties to the dispute may seek redressal from the Sub-Divisional Magistrate for resolution. The Sub-Divisional Magistrate shall, within 30 days, pass an order directing the recovery of the price of the commodity, penalty to the offender and prohibition of further purchase by the purchaser. The aggrieved party can appeal against this order to the Collector or the Upper Collector and the appeal will be disposed of within 30 days. This order will be enforced as per the order of the Civil Court. The recovery to be made by order of the Sub-Divisional Magistrate and Appellate Officer will be recovered as per the arrears of land revenue.
12. Provision of Penalties
In case of violation of the provisions of Section 4 (Trade and Commerce of scheduled farmers’ produce) and the rules of the Ordinance, a hefty fine of Rs. 25,000 to Rs. 5 lakhs has been provided. An additional fine of Rs 5,000 per day will be levied for continuing the violation.
Penalties ranging from Rs 50,000 to Rs 10 lakh are provided for violating the provisions and rules of Section 5 (Electronic Trading and Transaction Platform) and 7 (Price Information and Market Intelligence System) of the Ordinance. An additional fine of Rs 10,000 per day will be levied for continuing the violation.
13. Overriding effect
Section 14 provides for overriding effect over the State Government's Agricultural Produce Market 5
14. Bar of jurisdiction of Civil Court
The Civil Courts are prohibited under Section 15 from admitting matters which may be considered and disposed of in accordance with the powers conferred by this Ordinance or the rules thereunder.
15. The existence of current APMCs intact.
The system to be established by this Ordinance is not a substitution to system of APMCs established under State Acts, but it is an additional system. However, the system created by this ordinance will be a major challenge to the existing system of inefficient market committees. The market committees have to improve their performance and effectiveness. In order to meet such a challenge, all the market committees have to adopt the Centrally Sponsored National Agricultural Market (eNAM) scheme to bring order and transparency in the purchase and sale of agricultural commodities and thus, this challenge will prove to be beneficial for the market committees in the state.
Sudhir P Metrewar
