Since independence, Minimum Support Price (MSP) has served as an insurance to farmers, in the form of income security for their produce. As many as 23 vital farm products are supported by the MSP regime. Yet, it has no legislative backing.
Recently, three laws were passed, which the Central government described as necessary farm reforms. Two of these are the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act (FPTC Act), and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act (FAPAFS Act). Unsurprisingly, none refer to the MSP. The stated object of these laws is to provide farmers an additional marketplace for selling their produce by institutionalising contract farming, whilst reducing the dependency on government-controlled APMC-designated mandis, where farmers are often forced to pay high commissions to intermediaries.
Abuse of federalism
Agriculture falls within the exclusive legislative competence of State governments, through Entry 14 of the State List. However, the Acts in question have been enacted by Parliament, seemingly deriving the legislative competence to do so under Entry 33 of the Concurrent List, which deals with ‘trade and commerce’ of some products listed in that Entry. This inference is axiomatic as the FPTC Act (defining ‘farmers’ produce’), and the FAPAFS Act (defining ‘farming produce’), borrow the items enumerated in Entry 33. The list of items provided under Entry 33 is an exhaustive one. However, the two definitions take leaps beyond the exhaustive set of items enumerated in the said Entry, by also including what can practically be considered as the entirety of farming output — “...wheat, rice or other coarse grains, pulses, vegetables, fruits, nuts, spices, sugarcane and products of poultry, piggery, goatery, fishery and dairy...” — none of which find mention in Entry 33.
The definitions of ‘farmer’ and ‘farming produce’ are at the heart of these laws, as they lay out the items in which any trade beyond the mandis can take place. Including the vast majority of agricultural produce in such definitions amounts to an egregious breach of legislative competence by the Union government as it is the States which are empowered to enact laws regulating ‘agriculture’.
Despite this clear constitutional position, the statement of objects and reasons accompanied with these Acts attempts to give an impression of being intended towards reform in the agricultural sector while drawing upon purported powers under Entry 33, despite the Entry not explicitly including within its ambit the expansive definition of farming produce as referred to in the Acts. In short, this is a case of abuse of federalism.
The way forward
States like Punjab are considering declaring all of their territory as ‘mandi’ to circumvent the effect of these laws. However, it is doubtful if their respective APMC Acts permit the same; and in any case such knee-jerk reactions would surely involve scrutiny from the courts. Constitutionally speaking, however, there exists a strong case for aggrieved State Governments to invoke Article 131 of the Constitution and file a suit challenging the vires of the two laws.
Whilst doing so, State governments could also explore the potential of granting MSP a legislative backing, at least within the mandis, since any MSP is a matter of government largesse, and not a legally enforceable right with farmers. This move would incentivise farmers to sell their produce at the mandi at assured rates rather than expose themselves to the whims and caprices of private players. At the same time, demands from opposition parties to impose MSP upon private players could be at loggerheads with the free market economy principle enshrined under Article 301 of the Constitution. It is in view of these complexities that the best way forward for the States is to challenge the very constitutionality of these laws.
Aditya Manubarwala and Pranav Verma are LLM candidates at the University of Cambridge
