After the Independence in 1947, farmers directly used to sell their agricultural produce to the consumers but due to the zamindari system and many other situations, maximum farmers of India were under debt and the money lenders used to charge high interest rates for the debts taken by the farmer. When farmers failed to pay their interests then those money lenders used to buy the produce from the farmers at a very cheap price and for the next production, again farmers had to take loan from the money lenders and this process became like a vicious cycle from which farmers could not come out and were exploited unceasingly. For solving the problem of farmer exploitation, the Government interfered in it and introduced APMC (Agricultural Produce Market Committee) Act. This act says that farmers cannot sell their products directly to the consumers nor anyone can directly purchase from them and all the sale would take place through the Mandi which was established through the APMC Act and these Mandi’s will be run by the State Governments.

The present model of APMC Act functions as: Each State Government has its own APMC. The State divides the Mandi’s according to their area and each area has its specific Mandi. If any trader wants to purchase anything from Mandi, then he must acquire the license of that specific Mandi. Similarly, the farmers of that area can sell their products on that specific Mandi. This system of selling and purchasing things from the specific Mandi was Mandatory for the traders and farmers. For selling the products, auctioning takes place which is divided into two: MSP and Price Discovery. MSP is not for all crops, there are 22 such crops for which the Government decides MSP. The crop apart from those 22 crops is sold by the Price Discovery system based on demand and supply of that produce in the market. Through a supply chain, when a farmer produces something before it reaches the consumers, there are lots of middlemen in the process and this new system is trying to eliminate this middlemen process. In 1963, when APMC Act was introduced, its objective was to protect the farmers from exploitation and to protect them from money lenders and go-betweens, but in changing times, this Act has become the reason for the exploitation of farmers. In many situations, traders formed a cartel and did not buy the produce at MSP in a particular Mandi. APMC Act has now become counter-productive.

Agriculture comes in list 2- Entry 14 which means it is a part of the State list. But as per A. 248 of the Constitution, if any entry is not present in those 3 lists, that power would go to the Centre. And as per A. 249 of the Constitution, if any entry is the part of State List and when it comes to the National Interest then the Centre will have the power to make laws about State List. Entry- 33 of Concurrent List reduces States’ power to make agricultural laws. Now the problem was, Mandi tax was collected through APMC which is with the State Government and is the existing system and the new farm bills which are introduced talks of creating a new ecosystem where it would not be in control of State Governments so the tax effect will reflect which the State Government collects. So, the State Government and its development will suffer.

On 12th January 2021, the Supreme Court has ordered to stay the implementation of these farm laws and has set up a committee to discuss all the issues. In my opinion, this stay order and setting up a committee does not do much good. The Supreme Court either might have repealed these laws if they weren’t in favour of the farmers or if the laws were in favour of these farmers, it could have said so and the angst among the farmers might have been controlled.