Other states shouldn’t follow Punjab’s example on farm Bills
Parties across the political spectrum in the Punjab Assembly have sent a strong signal to the state’s powerful community of arthiyas (or middlemen) and large farmers with the unanimous rejection of the three farm laws enacted by Parliament and the passage of three farm Bills that would bypass the central laws. The logic of this dramatic move, capping weeks of protests, is unclear. For one, these three enactments are unlikely to pass the test of constitutionality. Though agriculture is on the State List of the Constitution, the production, control, supply, and distribution of foodstuff are on the Concurrent List. Constitutional experts point out that states do not have the powers to disobey legislation framed under the Concurrent List. Since the Bills passed by the Punjab Assembly seek to amend the Central laws, they will have to be approved by the governor of the state and the president of India.
Previous attempts by states to amend Central laws have received presidential assent. Changes in labour laws by the Gujarat and Rajasthan Assemblies both received presidential approval because they conformed to alterations that the Centre had contemplated in a model Act governing labour regulations. The laws passed by the Punjab Assembly, on the other hand, are unlikely to pass presidential muster because they have sought to override the Central laws in three key ways. First, they impose a three-year jail term for anyone forcing farmers to sell wheat and paddy below the minimum support price (MSP). Second, they decree a state levy or tax on out-of-mandi transactions in the free trade area defined by the Central law concerned. Third, they have extended remedies available to farmers to the civil courts rather than limiting their access to the sub-divisional magistrate, which the Central legislation stipulates.
Apart from the third provision, which the Central government should usefully consider including in the Central law since it improves the redress mechanism for farmers, the other changes cannot be described as farmer-friendly. The three Bills purport to protect small farmers from exploitation by private traders and large corporations. They quote the 2015-16 Census to show that 86.2 per cent of the state’s farmers are small and marginal, owning less than two hectares. The majority of these farmers, however, rarely access the mandi system since they hardly produce surpluses. It is, in fact, the large landed farmers, comprising a powerful political lobby in this belt, who do so — a fact that is underlined by the restriction of the penal laws to wheat and paddy.
The central government, however, annually declares the MSPs for 22 crops and reports suggest that many of these — such as cotton and maize — are sold below MSP in the state, rendering the state government’s argument somewhat disingenuous. Further, proposing to impose a levy on non-mandi transactions also appears to be a way for the state to maximise revenues, since mandi taxes on wheat and paddy purchases fetch the state government around Rs 5,000 crore a year. Instead of widening the ambit of market options for farmers, this levy, in whatever form it takes, will constrain their freedom of choice. All told, these new state farm Bills appear to protect the age-old procurement mechanism, which primarily benefits large producers and distributors and protect the state’s revenues. It remains to be seen if other states follow Punjab’s example. It would not be in their interests to do so.