The Farmers Produce Trade and Commerce (Promotion & Facilitation) Act, 2020


The Farmers Produce Trade and Commerce (Promotion & Facilitation) Act, 2020

By True Lawyer 1 year ago Uncategorized

The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 was passed in September 2020 along with two major bills, namely The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 and The Essential Commodities (Amendment) Act, 2020. Together, these bills are called as Agricultural Reform Bills (now acts), 2020.

These Acts were long-awaited and also promised by major Political parties in the country. The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 is the first of these three Acts. This Act aims to bring about changes in the market system, making it more liberal, accessible, and competitive for the farmers. The act also aims to provide more agency and decision-making power to small and marginal farmers who were earlier forced to sell their product to only APMCs or private money-lenders. Further, the act also provides farmers with more freedom to sell their produce to buyers offering the most competitive prices. Let us see the various changes brought about by The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020.

Major features of the Act:

As a central act, the rules, and regulations set up by the FPTC Act will prevail over State acts. Thus, APMCs (Agricultural Produce Marketing Committees) or Government-authorized and is set up under State acts cannot by-pass new rules under FPTC Act. The area outside APMCs will be regulated by the FPTC Act. Keeping this in view, let us see the essential aspects of the Act.

·        Farmers' Produce: A Farmer can be anyone engaged in the production of farmers' produce (self, hired-labor, or farmer produce organization). Farmers' produce means foodstuff inclusive of cereals like wheat and rice, coarse grains, pulses, edible oil seeds, spices and sugarcane, dairy products in natural or processed form. This means anyone engaged in primary activities can benefit from the act. AMUL is a form of co-operative that provides an assured competitive market to dairy farmers.

·        Barrier-free trade: The aim of the act is to open up a free market for farmers. An essential part of this is allowing free transit to produce outside APMCs. Farmers can now sell their produce within and outside the State. Such trade is also allowed to be undertaken in places of production, collection, aggregation such as farm gates, warehouses, factory premises, silos, and cold storages, etc.

·        Traders of Farmers' Produce: Anyone who intends to buys farmers' produce for wholesale trade purposes, export purposes, processing, value addition, manufacturing, retail, end-use, consumption, etc. is a valid trader under FTPS Act.

 Trading Scheduled Farmers' Produce: Schedules Farmers' Produce refers to that agricultural produce which is regulated under any APMC Act. Trade-in such scheduled produce can be carried out by a farmer, FPO, agricultural co-operative society, trader with a PAN card. Violation of this rule is punishable with a fine of 25000 to five lakh rupees. This rule aims to prevent illegal hoarding and trading of APMC protected produce.

·        Farmers Payment: All Traders engaging in the trade of Agricultural produce with farmers outside APMCs shall make the payment on the same day or within three working days and a receipt must be given to the farmer on the same day. This rule aims to provide immediate cash to the farmers to prevent exploitation and unfair trade practices outside the APMC market.

·        E-Trading Platform: FPTC Act has allowed the selling of farmers' produce through online e-commerce platforms. This will facilitate inter-state selling of farmers' produce. Trading entities having a PAN card under Income Tax Act such as Companies, partnership firms, societies, etc. can engage in trade through electronic platforms. The procedure, norms, code of conduct, quality assessment, and payment methods will be determined by the Central Government from time to time. Violation of these rules is punishable with fines up to 10 lakh rupees.

·        No Fees imposition: The Act has prohibited the age-old practice of levying fees on farmers. Now, the States as well as the APMCs cannot levy any market fees or any charges including any type of cess on the trade of schedules farmers' produce outside the APMC markets.

·        Proper Dispute Resolution Mechanism: In order to prevent the exploitation of farmers in free and open markets, SDM is empowered to hear disputes between farmers and traders. Dispute resolution will take place through the conciliation board which must resolve the issue within 30 days.

It is important to reiterate here that the FTPC Act does not abolish the Minimum Support Price that is offered to Farmers. The Act aims to free the farmers from unnecessary regulations and give them access to a competitive free and open market.


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