Discussion Paper 267- Dammu Ravi- Liberating Indian agriculture agriculture contributed 51 per cent to GDP with about

h about 70 per cent of

Markets total working population was engaged in it; in 2000, its contribution to
GDP drastically declined to 22 per cent but agriculture workforce only
Introduction:- marginally declined to 58 per cent; by 2020, its share in GDP further
India’s agriculture potential remained shackled to the objective of declined to 17 per cent but the workforce dependent on it continued to
food security through various policy interventions since 1960. Despite remain high at 42 per cent. It can be inferred that the domestic
achieving a record food production year after year and maintaining industrial growth was also lagging behind, unable to absorb excess
huge buffer stocks of food grains there continues to be widespread labour trapped in agricultural activity. This has the socially
rural distress with a large number of farmers reduced to penury. undesirable effect of making agricultural productivity several times
Understanding what ails India’s agriculture is imperative for taking lower than that in the non-agricultural sectors. The ensuing
right decisions. It is about time that Indian agriculture markets are widespread rural distress over time forced agriculture labour to
liberated in the larger interest of farmer, consumer and economy. The migrate to urban areas as construction workers in large numbers.
paper brings out various complex issues in our current agriculture The fragmentation of land holdings which is so characteristic of
market situation and makes useful suggestions for unleashing the full Indian agriculture has debilitating impact on food productivity and
potential of our agriculture, also to be a major export hub for global rural well-being. The Agricultural Census data for 2015-16, brought
markets. out every 5 years, as captured in the table3, suggests that the average
Background:- agriculture land holdings have been too small to realize the full
potential of agricultural activity in the country. In 1970s, there were
The genesis of India’s agriculture policy can be traced to 1960s when 71 million land holdings with average size of 2.28 hectares and by
India was a food deficit nation with images of hunger, famines and 2015, in 45 years, the land holdings increased to 146 million with
droughts presenting a common sight. The food crisis forced India to average size reduced to 1.08 hectare. During this period, the total
import wheat from USA under PL480 program with imports ranging agriculture land under cultivation had more or less remained constant,
from 4-10 million metric tons (mts) a year, exposing India’s rather marginally reduced to 157.68 million hectares from 161.88
vulnerability and dependence on outside sources. It was but natural million hectares.
that government made achieving self-sufficiency in food production
its main objective and agriculture policies were framed to increase Further breakdown of these numbers suggest that nearly 86 per cent of
domestic food grain production as well as manage storage and India’s farming community are small and marginal farmers with 126
distribution. In the 1960s, the use Green Revolution (GR) techniques million land holdings of less than 2 hectares (average size of holding
helped to boost food production, while Food Corporation of India at 0.38 hectare) and comprises a share of
(FCI) founded in 1965 was mandated to manage food grain buffer 44.3 per cent of land area; medium level farmers constitute 13% with
stocks, along with a support price mechanism instituted through the average land holdings between 2-6 hectares with 19 million holdings
then Agricultural Price Commission (Now called Commission for and comprise a share of 43.61 per cent of land area; large farmers’
Agricultural Costs and Prices). holdings are more than 10 hectares who constitute about
Impact of Green Revolution 0.57 per cent (870,000) with 11 per cent share of land area. Majority
The noble laureate Norman Borlaug and his research team in Mexico of our farmers are not only small and marginal but also possess
developed the Green Revolution techniques in 1960s which were unequal agriculture land holdings and permanently dependant on the
pioneered in India by our agriculture scientists led by MS vagaries of monsoons and government subsidies.
Swaminathan. These GR techniques brought transformational changes II. Agriculture markets in India
in Indian agriculture with infusion of high yielding variety of seeds,
use of fertilizers, pesticides and water, mostly in rice and wheat. By The policy emphasis on the need to maintain food grain buffer stocks
1980s, India became self-sufficient in food grains with record made our agricultural markets highly regulated over time. Agriculture
production increased from 82 million in 1960 to 129 million MTs and Produce Markets Regulation (APMR) Act in 1963 and a modified
more than doubled by 1990s. This has reached 300 million tons in the Agricultural Produce Market Control (APMC) Act in 2003 largely
latest year, heralding an era where managing surplus in grains defined the agriculture market situation in the country; while the
becomes the main task ahead of the policymakers. farmer mandated farmers to sell their produce in open mandis by
themselves or through registered traders, the latter allowed private
However, the adverse effect of GR on ecosystems became individuals and corporate sector to buy agriculture produce directly
increasingly apparent by the late eighties as it resulted in reduction offrom farmers. Since Agriculture was a state subject, implementation
soil fertility, depletion of ground water, loss of genetic diversity and of APMC Act in most situations was adhoc and half-hearted.
soil contamination. Also, the impressive gains under GR did not Commission agents and traders usually take advantage of the gaps in
translate into measurable gains for farmers across the country mainly the Acts and monopolise markets by way of granting licences, levying
because the resource intensive processes necessitated under GR were mandi fees, paying commissions, money lending etc., all of which tie
being mostly harnessed by medium and large farmers in Punjab, small and marginal farmers to mandis.
Haryana and Western UP who had the capacity to make significant
initial capital investments, while a large number of small and marginal Logistics hurdles
farmers could not avail its benefits.
Poor logistics are a big hurdle, especially for small and marginal
although India’s food production doubled by 1990s under GR and farmers to take advantage of the mandi facilities. The 6630 mandis in
nearly four times by 2020, the production was skewed with mostly the country cover an average distance upto 463 sq kms, but as this
rd
rice and wheat experiencing higher yields, covering 2/3 of total food large distance is a big disincentive for a farmer to take his produce to a
production. Also, agriculture contribution to India’s GDP presents a mandi, he usually ends up selling it to a trader at a lower than the
scenario of diminishing returns. As can be seen from table2, in 1950, market price. In due recognition of these shortcomings, the
Swaminathan Committee Report (SCR) in 2006 strongly such as burden of transport cost, pre-seasonal commitments, pending
recommended creation of more mandis for better management of loans, lack of awareness of MSP etc.
MSP. Building on this report, the National Commission on
Agriculture (NCA) in 2011 recommended to build mandis five times Thus, when MSP is provided to all farmers, regardless of their
more to help farmer reach the nearest mandi in an hour. Such a plan economic status, large farmers and middlemen benefit the most. The
would require construction of 33150 mandis (6630*5) across the Niti Aayog Evaluation Report on MSP in 2016 points out varying
country, which if implemented, could reduce average distance to a awareness levels amongst farmers about MSP across States – Punjab
nearest mandi to 80 sq kms. As the eco-system of a mandi require and Haryana at the highest and at lower levels are Odisha,
construction of buildings, roads, warehouses and transport networks Uttarakhand, Jharkhand, Gujarat, Karnataka etc. Some states like
with huge investments, it is best if private investments are tapped. Kerala, AP and North East rarely utilize MSP as they grow different
Parallely, virtual markets have also been found to be effective in crops. According to the National Accounts Statistics report in 2018,
trading of agriculture produce; The Karnataka State Agriculture annual net income from agriculture in 2017-18 in Punjab was Rs.5.31
Marketing Board set up National e-Markets Limited (NeML), which lakhs per cultivator and, in Haryana, it was Rs.3.44 lakhs against a
inspired the idea for a pan-India electronic trading portal eNAM in national average of Rs.1.7 lakhs. These two states continue to be the
2015 that sought to connect mandis across the country. So far about biggest beneficiaries of MSP, without having ever experienced
1000 mandis have been connected by eNAM, providing vibrancy to agriculture distress. In fact demand for MSP has grown in time with
domestic agriculture trade. commensurate increase in area of cultivation under MSP for rice and
wheat. States like Madhya Pradesh, Jharkhand and Bihar too are
Storage infrastructure producing rice and wheat regardless of whether or not right conditions
exist.
The Gaps in our food grain storage infrastructure has a bearing on
agriculture prices. Bumper harvest, if not quickly marketed or excess Price distortion caused due to MSP for agricultural items in the last
production not stored in time, depresses prices. As can be seen from five years. It may be observed that where government procurement
the table4, the total installed food grain storage capacity in the country has been enduring under MSP, it had always resulted in steep
under central pool, as available with Food Corporation of India (FCI), variation in MSP and International prices, the former being invariably
Central Warehousing Corporation (CWC) and State Agencies (both higher as in the case of rice and wheat. Thus, high MSP for
owned and hired capacity) including covered and plinth storage, was agricultural items not only causes food inflation and also make export
only 81 million MTs (as on 1.4.2021). According to the National of those items costly by out pricing themselves in international
Academy of Agricultural Sciences (NAAS), India has 7645 cold markets.
storages across the country that can store only 35 million MTs of
fruits and vegetables. This grossly inadequate food grain storage Public Distribution System (PDS)
infrastructure in the country cannot support food security strategy at a Public Distribution System (PDS) has been in practice since 1960s as
time when food grain production in the country is increasing. a system of management of food security for delivering social justice.
According to NAAS study in 2017, India’s post harvest food grain PDS is the largest distribution machinery of its type in the world
losses on account of inadequate storage infrastructure was in the range which fulfills twin objectives of (i) providing price support to farmers
of 13-18 million MTs which comprises about 6 per cent of total food for their produce and (ii) distributing food grains to the poor at
grain production and translates to about Rs 7000 crores losses per affordable price. In addition, States also procure food grains from
year. According to FAO, India’s combined loss of both food grains open markets and sell to the poor through PDS at subsidized rates as
and horticulture is about 40 per cent every year. part of their electoral commitments, often incurring huge expenditure.
In recent times, Government has initiated decentralization of storage Food grains are procured at MSP rate by the Food Corporation of
of food grains by involving private sector for setting up of silos, cold India (FCI) to be stored in buffer stocks and released to poor through
chains, warehouses, transport and logistics. These initiatives would, the (PDS) network of 5,37,790 Fair Price Shops under PDS across the
no doubt, minimize losses and stabilize prices in the long run. For country for 228 million ration cardholders, benefiting about 760
stronger private sector participation in the creation of storage million people.
infrastructure in the country makes it necessary to free agriculture FCI incurs huge expenditure for procuring food grains at MSP rates
markets. and bears losses by releasing them through the PDS network. In 2019,
Minimum Support Price (MSP) FCI procured paddy at Rs 17.50 per kg and, including cost of refining
it at the miller and logistics, the cost added upto Rs 36-38 per kg and
MSP has been in operation in the country since 1965 with a twin released it to the poor at Rs 2 per kg through PDS. Instead, if FCI
objective of preventing agriculture prices from crashing and protecting were to buy rice in the open market at Rs 28 per kg for distribution
poor farmers. Over time 23 crops have come to be covered under MSP through PDS, it could save upto Rs 6-8 per kg. In 2020-21, the cost of
of which rice and wheat enjoy maximum support. The Commission food subsidies to government was Rs. 525,444 crores, an increase by
for Agricultural Costs and Prices (CACP) fixes MSP by calculating 50 per cent over the previous year.
inputs costs such as fertilizers, implements, labour, seeds etc. and
marking up 40-50 per cent margin over domestic price for the benefit Thus, APMC, MSP and PDS usually go in an organized manner and,
of farmers. At a broader level, MSP helps farmers, but the ground when implemented in sync, it makes sense in terms of the benefit the
reality reveals a distorted picture. According to the National Sample structure collectively provides to both farmer and poor. Although it
Survey Office (NSSO) report of 2018, only 6 per cent of farming fulfils the twin objectives, within the structure, the benefits are skewed
community in the country has benefitted from MSP so far and these as they are mostly cornered by big farmers and traders. The
are mostly large and medium farmers, middlemen or traders in few underlying assumption is that majority of Indian.
states. Small and marginal farmers who constitute 86 per cent of the poor eat only rice and wheat, a thinking not only outdated but also
farming community are seldom able to avail MSP for obvious reasons strengthens policy intervention for regulating agriculture markets. It
needs to be reflected as to why despite incentives in the form of MSP,
zero tax on agriculture produce, free electricity, high import tariffs on
by global cartels, excessive use of import restrictions could end up in
agriculture, farmer suicides have increased. According to the National speculative trade, hoarding and price distortions. India’s average
Sample Survey Report of 2019, the total number of farmer suicides in agriculture import applied tariff rate at 32.7 per cent and bound rates
India from 1995 to 2019 was 3,92,705, a clear indication of the in the range of 100 to 300 per cent provides significant price
obvious disconnect between policies and changing aspirations of protection for domestic producers. With MSP rates ever increasing we
farmers. Just as agriculture growth is not an indication of farmers well
have ended in a peculiar situation of rendering some of our agri-
being, GDP growth is not a reflection of prosperity of all. products especially rice, wheat and sugar out priced in international
markets. Providing export subsidies to access foreign markets can, at
The Way Forward – Beyond APMC most, be a temporary solution and also risks faltering WTO rules;
The merits of APMC controlled agricultural market has become less India is currently fighting a sugar export subsidy case in the Dispute
relevant today, not merely for reasons of their inability to deliver Settlement Body of WTO. It is important to recognise that Import of
benefits to the majority of Indian farming community, but also that in food items does not always adversely affect domestic prices, if
the age of internet and e-commerce, farmers too should be allowed to calibrated with a view to mitigating domestic shortages. Often, food
take advantage of the opportunities offered by open markets, i.e., imports contribute to food security for a large population like ours
freedom to sell their produce for better remuneration anywhere and to which do not have the luxury of uninterrupted food supplies during
anyone. Logic dictates that if manufactured goods can be sold through off- seasons. In recent times import of lentils and pulses have helped
the medium of e-commerce platforms openly, Indian farmer too to fill gaps in domestic production and stabilized prices. If conditions
should be allowed to sell his produce to anyone. eNAM networks if for food processing sector improve, it should be possible to absorb
extended to mandis across the country, sourcing by retail food chains surplus domestic agriculture production and encourage higher value
directly from farmers and cooperatives will happen overtime. addition in food items.

Direct Bank Transfer (DBT) schemes have been successfully Farm Bills
implemented with regard to LPG, MNREGA, PM Kisan etc. The Report of the Committee of State Ministers in 2013 recommended
Extension of DBT to small and marginal farmers in place of MSP developing a National Single Market for agriculture produce by
benefit could be a game-changer. Similarly, DBT, instead of food removing all barriers to internal trade in recognition of the
grains through PDS, is extended to BPL beneficiaries; it could prevent complexities and contradictions in dealing with agriculture as a State
leakages in the scheme as well as give choices to the poor to buy subject even as inter-state commerce and trade remained in the Union
nutritious food grains from the open market. The study of the Indian List. Accordingly, a model Agricultural Produce and Livestock
Statistical Institute for the XV Finance Commission in March 2019 Market (APLM) Act 2017 was drafted by the Union Government
estimated that the total food subsidy expenditure (both Union and recommending to facilitate inter-state trade by further unifying
State governments) in 2020-21 was about Rs 5,25,441 crore. domestic markets. In pursuance of these long pending demands for
According to the Commission for Agricultural Costs and Prices reform, 3 Farm Bills were introduced in September 2020 as
(CACP), the annual fertilizer subsidy was Rs.85,000 Cr during the Ordinances in the Parliament.
same period. If agriculture subsidies, at least partially, are brought
under DBT to farmers, it will overtime help to stabilize agriculture The Farmers’ Produce Trade and Commerce (Promotion and
prices; minimize leakages; limit wastage in storage; and reduce Facilitation) Bill, 2020 is expected to create an ecosystem where
exploitation by middlemen. Moreover, DBT is a WTO compatible farmers and traders enjoy the freedom to sell and purchase farm
scheme and fits in perfectly well with India’s obligations under the produce outside the registered “mandis” under APMCs. Private
Agreement on Agriculture. buying and selling outside Mandis was already allowed under APMC
Act; the difference being that the Act legally permits opening of
An environment of competition induced by corporatisation in parallel alternative market structures to facilitate direct buying and contract
with APMC should minimize scope of misuse and exploitation. farming. It should be anticipated that these parallel markets at some
Presence of strong cooperatives in some states, like in Kerala, has stage in future may weaken MSP as private sector is expected to buy
proved to dilute monopolization by corporates. For a farmer, timely agriculture items at competitive prices, dictated by demand-supply
remuneration more than higher price realization for their produce is a market forces, and not at a higher MSP rates. These alternative
greater incentive which could be a strong pull factor for entering into markets are expected to reduce post-harvest losses and improve
contract farming with private sector with pre-seasonal arrangements. remuneration through grading and facilitate linkages to terminal
Although corporatisation is not the panacea for agriculture distress, it markets in food processing, retail and exports. Contract farming
is worth encouraging, where possible, especially since the existing would be beneficial to small and marginal farmers who constitute 86
APMC system has not fully addressed problems of the farming per cent of the Indian farming community as they can transfer the risk
community. The ITC e-commerce model experience is said to have of market unpredictability to the private sector.
actually helped farmer earn a higher income by 50 per cent through
elimination of middleman in the supply chain. With likely fresh The Farmers (Empowerment and Protection) Agreement on Price
investments from corporate sector, agri production is expected to Assurance and Farm Services Bill 2020 provides a legal mechanism
move closer to the consumer and help discover reasonable price for for farmers to enforce time bound payments from big corporate /
agriculture items for the farmer. traders. Since Sub-Divisional magistrate is authorized to settle such
cases, acting on farmers complaints within three days, it saves the
Export/ Import farmer the hassle of having to go to higher court for dispute
India’s share in the global agricultural trade in 2019 was only 2.3 per resolution. However, building awareness about these provisions is
cent and the most obvious reason for its low penetration in the global important for farmers to exercise their rights timely.
markets is due to a highly regulated export/ import trade over several The Essential Commodities (Amendment) Bill 2020 allows removal
years, robbing India’s potential to be an agriculture powerhouse of the of commodities like cereals, pulses, oilseeds, onion and potatoes from
world. While judicious use of import restrictions are considered the list of essential commodities, thereby, doing away with imposition
necessary for preventing unfair competition due to possible dumping
of stockholding limits on such items except under extraordinary Sixth, despite the development of communication, road networks and
circumstances like war, pandemic, food crisis, etc. Hoarding of these other trade infrastructure, agri-markets remain fragmented––
commodities is expected to gradually reduce with price stabilization somewhere glut and price crash, somewhere shortage and high prices.
happening through resilient supply chains networks establishing in
these commodities. Seventh, the growth of food processing needs to be accelerated to (i)
match with the rising demand; (ii) pull agri-diversification; and (iii)
Conclusion create more jobs in the rural economy.

In a short span of 50 years, Indian agriculture has evolved to be a food Eighth, with the rise in specialization and commercialization of
surplus producing sector. While it has provided food security to the agriculture, most of the output of several crops produced in a state is
people, the changing aspirations of farmers have remained consumed outside than within it. This supports efficient and barrier-
unaddressed. The recent Farm Bills by seeking to liberate agriculture free interstate trade in the spirit of one nation one market.
markets, can achieve twin objectives of providing a larger cover of
protection to farmers by ensuring rightful remuneration while at the Ninth, investment and capital formation in agriculture, which is so
same time reviving the vast untapped potential of Indian agriculture to essential for the progress and growth of any sector, has seen an
be a food basket of the world. unhealthy trend in recent years––the growth rate fell from close to
10% per year during 2002–03 to 2011–12 to 2% in the following
decade.

THREE FARM LAWS Lastly, farmers are forced to seek remunerative prices through MSP
and government procurement because of their disillusionment with the
Agriculture comes under the state list of Schedule 7 of the Indian existing marketing system.
Constitution and to initiate reforms in the agricultural sector, in 2017,
the central government had released model farming acts. However, GENESIS OF POLICY REFORMS
several reforms suggested in the model acts had not been implemented
Agricultural markets in India are mainly regulated by state Agriculture
by the states. In response to this, the centre promulgated three
Produce Marketing Committee (APMC) laws. APMCs were set up
ordinances in the first week of June 2020.
with the objective of ensuring fair trade between buyers and sellers for
Then, the Union government enacted two new farm laws for effective price discovery of farmers’ produce.
agriculture, and modified the Essential Commodities Act 1951 for
APMCs can:
agri-food stuff, in September 2020. The new acts have been widely
acclaimed as historic, path-breaking, and a “1991 movement” for regulate the trade of farmers’ produce by providing licenses to buyers,
agriculture. commission agents, and private markets.
WHY POLICY REFORMS IN AGRICULTURE? levy market fees or any other charges on such trade, and
There are at least ten significant reasons for initiating reforms in the provide necessary infrastructure within their markets to facilitate the
agriculture sector. trade.
1st The major policy reforms of 1991 did not cover agriculture. The Standing Committee on Agriculture (2018-19) observed that the
Initially, many thought these reforms were useless, they would harm APMC laws are not implemented in their true sense and need to be
the country, and were being undertaken due to pressure from the reformed urgently. Issues identified by the Committee include:
World Bank and IMF. So, nobody felt concerned about the exclusion
of the agriculture sector from the 1991 reforms agenda. The (i) most APMCs have a limited number of traders operating,
favourable e ects of the 1991 policy reforms on the non-agriculture which leads to cartelization and reduces competition, and
sector and the growing disparity between agriculture and non- (ii) undue deductions in the form of commission charges and
agriculture incomes caught the attention of some experts and they market fees.
started speaking about the need for reforms in the agriculture sector.
During 2017-18, the central government released the model APMC
The need for policy reforms in agriculture was further necessitated by
and contract farming Acts to allow restriction-free trade of farmers’
the liberalization of agriculture trade due to WTO agreement and
produce, promote competition through multiple marketing channels,
rising cases of farmers’ suicides and agrarian distress.
and promote farming under pre agreed contracts. The Standing
The second reason relates to imbalance between domestic demand and Committee noted that states have not implemented several of the
supply. India is accumulating a large surplus of some commodities reforms suggested in the model Acts.
and at the same time importing huge quantities of edible oil and
The Central Government thus, promulgated three ordinances which
pulses.
collectively sought to: -
The third reason is the pressing need for improving export
i) facilitate barrier-free trade of farmers’ produce outside the
competitiveness of Indian agriculture.
markets notified under the various state APMC laws
Fourth, agricultural segments such as horticulture, milk and fishery–– ii) define a framework for contract farming, and;
where market intervention by the government is either nil or very iii) impose stock limits on agricultural produce only if there is a
little––show 4–10% annual growth. sharp increase in retail prices.

Fifth, India is dominated by small holdings that typically have small The three ordinances together aimed to increase the opportunities for
surpluses. Most of these farmers lack scale, resources, and the ability farmers to enter long term sale contracts, increase availability of
to take price risk to go for high-value crops. buyers, and permit buyers to purchase farm produce in bulk.
In 2020, after the three new laws were passed, the farmers protested • Addressing the lacunae of APMC acts: The law related to the
against three farm laws passed by the government, at Delhi borders, regulation of Indian agricultural markets like the Agricultural Produce
leading to their repeal in 2021. Market Committees (APMC) act had led to centralization and was
thought to be reducing competition and participation, with undue
The three laws are as follows: commissions, market fees, and monopoly of associations damaging
1. Farmers’ Produce Trade and Commerce (Promotion and the agricultural sector. The act seeks to break the monopoly of
Facilitation) Act, 2020 government-regulated mandis and allow farmers to sell directly to
private buyers by circumventing the APMCs. The new laws provide
2. Farmers (Empowerment and Protection) Agreement on Price full autonomy for farmers to sell their produce.
Assurance and Farm Services Act, 2020
• Higher price realization for farmers: The act is expected to increase
3. The Essential Commodities (Amendment) Act, 2020 the freedom of choice of sale of agri produce for the farmers and this
could help the farmers in getting a better price for their produce
The three laws aim to change the way agricultural produce is
because of more choices of markets. This would allow small and
marketed, sold and stored across the country. They are mostly
marginal farmers to sell their produce at market and competitive
focussed on the forward linkages to the agricultural sector.
prices. This would help raise rural incomes and subsequently provide
Positives of the acts: an impetus to the economy at large due to the increased demand from
the rural areas.
• The acts are being hailed as a watershed moment in the history of
Indian agriculture that could initiate a complete transformation of • One India, one agricultural market: It is expected to pave the way for
agriculture. the creation of a ‘One India, One Agriculture Market’ by promoting
barrier-free inter-state and intra-state trade with provisions of
• The new farm acts are expected to benefit all the stakeholders — electronic trading as well. This could help correct the regional
farmers, industry and consumers. disparities in demand and supply of the agricultural produce. This
could help farmers of regions with surplus produce to get better prices
• The new farm acts would help the small and marginal farmers (86%
and consumers of regions with shortages, lower prices.
of total farmers) who don’t have the means to either bargain for their
produce to get a better price or invest in technology to improve the Negatives:
productivity of farms.
• Against the spirit of federalism: Since agriculture and markets are
• The new acts will help in establishing a much more integrated State subjects – entry 14 and 28 respectively in List II – the acts are
market, creating competition, and enhancing efficiency and being seen as a direct encroachment upon the functions of the States
effectiveness of the marketing domain of the agricultural sector. and against the spirit of cooperative federalism enshrined in the
Constitution. The Centre, however, argued that trade and commerce in
Negatives:
food items is part of the concurrent list, thus giving it constitutional
Some of the farmer organizations and others have called the acts propriety.
corporate-friendly and anti-farmer and have expressed the fear that the
• The farmers allege that the mandis operated under the APMC law
new acts may hurt the farmers’ interests. The bills have faced strong
will be abolished due to this Act. Once these mandis shut down, the
protests mainly from Punjab farmers and from opposition parties.
farmers will be forced to sell the crop to corporate companies at a
Farmers’ Produce Trade and Commerce (Promotion and lesser price. Mandis bring in revenue for state governments. The
Facilitation) Act, 2020 diversion of agricultural trade towards private mandis could lead to
the loss of states’ revenues.
-The act aims at opening up agricultural sale and marketing outside
the notified Agricultural Produce Market Committee (APMC) mandis • Once Mandi system is abolished, no one will buy farmers produce at
for farmers, removes barriers to inter-State trade and provides a MSP. Critics view the dismantling of the monopoly of the APMCs as
framework for electronic trading of agricultural produce. It expands a sign of ending the assured procurement of food grains at minimum
the scope of trade areas of farmers’ produce from select areas to “any support prices (MSP).
place of production, collection, aggregation”.
• Farmers will be exposed to the risk of fraud due to the entry of
• It prohibits state governments from levying any market fee, cess, or people without license or registration.
levy on farmers, traders, and electronic trading platforms for the trade
• The farmers also believe that they will be at a disadvantage when
of farmers’ produce conducted in an ‘outside trade area’.
going up against corporate entities, with their rights under threat.
• The act seeks to break the monopoly of government-regulated
Farmers (Empowerment and Protection) Agreement on Price
mandis and allow farmers to sell directly to private buyers.
Assurance and Farm Services Act, 2020:
-Traditional supply chains involve six to seven transactions between
• It creates a national framework for contract farming. It provides a
the production point and end use (farm to fork). Each transaction
legal framework for farmers to enter into written contracts with
involves cost and margin, leading to a large price spread between
companies and produce for them.
producers and consumers. FPTC will result in compressing the value
chains and eliminating excessive intermediation. In many cases • The written farming agreement, entered into prior to the production
farmers will be able to sell their produce directly to consumers or rearing of any farm produce, lists the terms and conditions for
through their groups. supply, quality, grade, standards and price of farm produce and
services.
Positives:
• It defines a dispute resolution mechanism. The Act provides for a • Improve forward linkage infrastructure: The incoming private sector
three-level dispute settlement mechanism– Conciliation Board, Sub- investment would help build supply chain infrastructure for the
Divisional Magistrate and Appellate Authority. agricultural sector. This could help facilitate the supply of Indian farm
produce to national and global markets.
Positives:
Negatives:
• Contract farming will enable the farmer to access modern technology
and better inputs. This would allow farmers to increase farm • Increased threat of food insecurity: Critics anticipate that the easing
productivity and also reduce input costs. of regulation of food items would lead to exporters, processors and
traders hoarding farm produce during the harvest season, when prices
• Contract farming will help farmers reduce the cost of marketing and are generally lower, and releasing it later when prices increase. This
improve their incomes. could undermine food security.
• It reduces the risk of price and marketing costs on small and • Increased volatility of food items: Critics anticipate irrational
marginal farmers. volatility in the prices of essentials and increased black marketing.
• The act seeks to encourage private sector participation in • Lack of clear-cut guidelines: The act proposes a price trigger
procurement and reduce the government burden of procuring. mechanism for invoking ECA. However, it involves a wide range for
• The legal framework for contract farming will empower farmers to a price trigger to invoke the ECA. Many things are left vague. Price
engage with the contract buyers on a le vel playing field without any triggers or price levels do not have a reference to a locality.
fear of exploitation. Conclusion:
Negatives: At the political level, the election manifestos of the two biggest
The inability of the small and marginal farmers to understand the national political parties, Congress and BJP, also promised to
terms of the contract may lead to the exploitation of such farmers. The liberalize agriculture markets to free farmers from the shackles of
Price Assurance Act, while offering protection to farmers against price APMC regulations.
exploitation, does not prescribe the mechanism for price fixation. Therefore, an important commitment of the government is to integrate
There is apprehension that the free hand given to private corporate the domestic market for all goods and services. The time has come to
houses could lead to farmer exploitation. consider the entire country as a common or single market for
Essential Commodities (Amendment) Act, 2020: agricultural products and to systematically remove internal controls
and restrictions.
The ECA Act 1955 was legislated at a time when the country was
facing a scarcity of foodstuffs due to persistent low levels of CASE: In 2020, the Supreme Court in Rakesh Vaishnav v. Union of
foodgrains production. The country was dependent on imports and India & Ors, ordered an interim stay on the implementation of three
assistance (such as wheat import from the US) to feed the population. farm laws and set up a committee of four members for the purpose of
To prevent hoarding and black marketing of foodstuffs, the Essential listening to the grievances of the farmers relating to the farm laws and
Commodities Act was enacted in 1955. By declaring a commodity as the views of the Government and to make recommendations.
essential, the government can control the production, supply, and Three petitions are before the Court:
distribution of that commodity, and impose a stock limit. However,
the Economic Survey 2019-20 highlighted that government • First Category of petition: a petition under Article 32 of the Indian
intervention under the ECA 1955 often distorted agricultural trade Constitution challenging the validity of the Constitution (Third
while being totally ineffective in curbing inflation. Amendment) Act, 1954, by which Entry 33 was substituted in List III
(Concurrent list) in the Seventh Schedule of the Constitution, enabling
Thus, the 2020 act was passed by the Parliament: the Union Government to legislate on a subject which was otherwise
• Removes cereals, pulses, oilseeds, edible oils, onions and potatoes in the State List. This particular petition may survive despite the
from the list of essential commodities. It deregulates the production, repeal of the three contentious laws.
storage, movement and distribution of these food commodities. • Second category of petitions: these support the farm laws on the
• It also removes stockholding limits on such items except under ground that they are constitutionally valid and also beneficial to the
“extraordinary circumstances”. The central government is allowed farmers. These petitions may well be amended to challenge the repeal
regulation of supply during war, famine, extraordinary price rise and of the laws, if the petitioners insist.
natural calamity of grave nature. • Third category of petitions: these are filed by the individuals who are
• It allows agri-businesses to stock food articles and remove the residents of the National Capital Territory of Delhi as well as the
government’s ability to impose restrictions arbitrarily. neighbouring states, claiming that the agitation by farmers in the
peripheries of Delhi and the consequent blockage of roads/highways
Positives: leading to Delhi, infringes the fundamental rights of other citizens to
move freely throughout the territories of India and their right to carry
• The deregulation through ECA amendment will help attract private
on trade and business.
sector/foreign direct investment into the agriculture sector.
Interim Stay: Historically, courts are reluctant to grant interim stays
• It addresses the lacunae of ECA 1955: Since large stocks held by
on legislation. As legislation emanates from a democratically elected
traders can be outlawed under the ECA 1955 anytime, they tend to
legislature they’re presumed to be constitutionally valid [Bhavesh
buy far less than their usual capacity and farmers often suffer huge
Parish v. Union of India].
losses during surplus harvests of perishables.
The courts grant interim stays only when a legislation may be Regulation & Development Act. It can, and should, consider the
characterized as ‘manifestly unjust’, ‘glaringly unconstitutional’, or following:
would cause ‘irreparable injury’ and go against ‘public interest’. This
is a high standard to satisfy. Notably, in the three court hearings, no A law enabling free inter-state trade and commerce
party asked for an interim stay or showed how the farm laws deserved Item 42 in list I (Union List under the Seventh Schedule of the
such an order. Constitution of India) refers to Interstate trade and commerce.
Right to Protest: the bench lauded the farmers for carrying on their Currently, there is no law which enables inter-state trade and
agitation peacefully without any untoward incident. The court noted commerce in agricultural products across unified Indian market.
that right to protest is a fundamental right recognised under Article Instances of state governments placing ad-hoc restrictions on
19(1) of the Constitution and can be exercised subject to public order. agricultural commodities going out of a particular state or coming into
However, no right is absolute and it is necessary for the court to a state are frequently reported. The damage, caused by such
determine the contours of the right to free speech and the extent to restrictions on farmers, is neither documented nor are farmers /
which this right can be exercised. The court noted that it did not want consumers compensated. Government of India should introduce a
to hinder any protest which was going on because every citizen has legislation enabling the following:
the fundamental right to a peaceful protest as long as they are -Uninterrupted movement of agricultural produce across the country.
maintaining public order without causing any violence.
-Assured freedom to farmers to sell anywhere, anytime and to anyone
In any protest, the stakeholders are not only the protesters but also and receive the best price possible
people affected by the protest. The residents, commuters and traders
can be regarded as the equal stakeholders in this protest as their right -Enabling electronic sale and physical delivery of such goods
to movement and trade under Article 19 and right to life under Article including through e-Nam or e-Commerce
21 come into conflict with the rights of the protestors. In a situation
Amending the Essential Commodities act to make restrictions
like this, the legal approach demands the Courts to intervene and
predictable and transparent:
harmoniously balance the rights of the two parties.
One of the biggest challenges in the agricultural marketing space is
The court here proposed on constituting a committee with esteemed
the uncertainty of restrictions likely to be imposed ‘at will’ under the
members, because even though the said agricultural laws were
Essential Commodities Act. These can range from imposition of stock
presumed to be constitutional, but during the pendency of a matter
limits to restrictions on price and sale. There are no market indicators
before the Supreme Court, the court decided to stay the
to predict when such restrictions are likely to be imposed. These
implementation of the farm laws while the adjudication of the
decisions are most often based on perceptions of price rise as
constitutionality of the laws was pending before the apex court.
‘understood’ by government officials or in response to a ‘cacophony’
PATHWAYS FORWARD on price rise. Any reform on agricultural markets has to start with
reasonable predictability on what the private trade can do or not do.
Getting the markets to function effectively Government should The amendment to the Essential Commodities Act 2020 was a step in
orchestrate and enable a gradual, well calibrated shift towards the right direction. This was criticised as giving away Government’s
-Increasing dependence on a unified national market to manage powers to control prices by the critics of the policy. What the
supply, demand and price discovery, including re-activation of amendment did was (i) to bring predictability in imposition of controls
forward and futures markets for price signalling in times of extraordinary price rise and (ii) exempt exporters, food
processors and others involved in value addition from these
-Setting up a long term, predictable import-export regime including provisions. The Government should, in our view, bring back a
stable import tariffs and export incentives/ disincentives provision to assure predictability of Union or State Government
invoking various provisions under the EC Act.
-Fine tuning policies to encourage diversification of crops to respond
to market needs and ecological considerations n Long term policy to Amend the Foreign Trade Regulation & Development Act
promote much required private investments in agriculture, particularly
in technology, logistics and retail One law which needs reform is the Foreign Trade Regulation &
Development Act 1992. Hailed as the first Act to be passed in the
-Enabling policy and regulation for land lease, land consolidation and context of economic reforms of 1991, this Act replaced the Imports
contract farming while protecting the interests of farmers. and Exports (Control) Act 1947, but still retains the power to impose
restrictions on imports and exports. Imposition of ban on exports
Legal (onions should be an interesting case study) at frequent intervals is
After repealing the three ‘farm laws’, Government of India has not yet done under the provisions of this Act. Once such a ban is imposed,
made any move towards any consultation on the process forward. It there cannot be any exports till the ban gets lifted. This makes India an
appears that reforms in agriculture have been put on the back burner, unreliable exporter in the global market and makes exporters jittery in
at least in the short run, more for political considerations than terms of getting into long term export contracts. In such a scenario,
anything else. However, reforms cannot be pushed back for ever. In they hesitate to buy and store such commodities, thereby making the
the larger interests of the farmers and consumers, changes in the legal farmers lose value in the value chain and making India an unreliable
framework will have to be made sooner than later; some by the State exporter, losing better unit value realisation. Neither a ban on exports
Govt. and state govt. and some by the Union Govt. nor the imposition of stock limits have a provision in place to assess
the loss to farmers, not to speak of compensating them.
What can the Union Government do?
A policy prescription of mandatorily assessing the losses caused to
The Union Government has the constitutional mandate on Inter-state farmers by such ad hoc administrative decisions by an independent
trade, the Essential Commodities Act and the Foreign Trade
agency would reduce the tendency to use these powers at will and trying to pool in resources to reduce the cost of farming. Alternate
cause losses to farmers. institutional models suitable to farmers in different locations needs to
be encouraged. While alienation of land in any form is a highly
Make price reporting mandatory emotive issue, sharing of resources, pooling of produce, collective
Information asymmetry in prices has remained the key to arbitrage purchase of inputs and extension services etc., are found acceptable.
management in the market. In spite of express provisions in APMC State Governments can initiate creation of innovative institutions to
Acts, price discovery is neither transparent nor properly disseminated. help farmers get the advantage of size while retaining ownership of
A legal provision to report prices, mostly real time and on line, to a small plots of land.
state level portal with open (read only) access with links to a national Policy
portal should pave the way for better informed decisions by the
farmers and the Government. Ideally, Government should also have National policies on agriculture have focussed on food security,
‘anonymised’ information on large private stocks of key commodities. nutrition and high input agriculture for justifiable and histirical
A legal framework to make price reporting mandatory by all markets reasons. While this approach had relevance during the period in which
(including e-markets) can be set up at the central level. it was formulated, new challenges in the form of environmental
factors, farm incomes, climate variability and market dynamics have
What should the States do? emerged in recent times forcing a rethink on some of these
Convert APMCs to Farmers’ organisations approaches. The ideas of ‘more crop per drop’ and ‘water for every
field’ (har khet ko pani) has been driven mostly by technology options
Model APMC laws have been in circulation for long. State than by conservation measures. The fact that about half the net sown
Governments have been hesitant to amend these laws though many of area remains rainfed even after years of investment in irrigation
them have made a few selected amendments. APMCs have become projects does force a rethink on water preservation, conservation and
revenue earners for the states and are mostly controlled by the trade. use strategies. The Green Revolution mindset that unlimited use of
Government of India would do well to insist that the management of water (often aided by free power) is acceptable and can continue
these be with farmers (at least two thirds of the seats on the endlessly needs a ‘reset’. New strategies on water management needs
management committees at all levels should be reserved for farmers or to emerge as policy options. The report of the committee headed by
farmer producer organisations). This single transformation is likely to Mr Mihir Shah to suggest a new water policy for the country has
bring real changes in the functioning of APMCs. In the light of the reportedly many innovative and comprehensive solutions to offer
recommendations of the XVth Finance Commission, incentives or (EPW 17th July ‘21). The question largely remains of adoption and
even some of the allocations from the Union budget could be made implementation.
conditional to the reforms in APMCs. In any case, competition in the
unified market may see some innovations in the APMC regulation. Vision: Food, Nutrition, Agriculture & Environment
The challenge, however, will be to ensure that farmers get a higher The policy vision for Food and Agriculture has historically centred
value as their share in the value chain. If the example of Bihar is around food security. Technology, be it hybrid or improved seeds,
anything to go by, mere change in the legal environment does not chemical fertilisers, or plant protection measures was the bedrock of
guarantee this. all policy interventions in agriculture, while Minimum Support Price
Create a framework to encourage Contract Framing and Public Procurement and Distribution were the mainstay of food
security interventions. These need to be replaced by a new vision of
Contract farming is not always about land. Contract farming’s most pro-farmer, pro-poor, pro-nature and (I may add) pro women policy
successful example is poultry. Contract farming arrangements bring for the future. These ideas do sound good on paper, but takes
with them access to better technology and extension, input support sustained efforts in ideation, design and implementation. There is
and assured buy back. Given the gaps in technology transfer and nothing exceptional in the idea, these are professed policies of both
extension services in the Government system and the vagaries of the centre and states. However, there is bound to be opposition from those
market, contract farming has proved beneficial to farmers particularly who are beneficiaries of the current system, and hence planning the
in perishable commodities or where the bulk of the demand is for trajectory of transition is more important than the idea itself. Change
processing. True, the ecosystem is still evolving and cannot be called is required in the design of policy instruments: to illustrate,
the best, but current arrangements have been beneficial, though it conservation of water as a policy requires discouraging excessive and
could have been better. For processors, contract farming assures a inefficient use of water and encouraging farmers, crops and farm
minimum quantity of raw material of the right quality with right practices which use less water. Ensuring better returns to farmers
parameters of food safety. They would want to engage with the would include reduction in costs and better value realisation for them;
farmers on a longer-term basis. Therefore, such arrangements are best pro-women would mean treating women as central to agriculture than
managed bilaterally. Since a referee is needed in any game, a neutral managing the much talked about feminisation of agriculture. Food and
body needs to be specified in case any dispute arises. Litigation is nutrition initiatives need a more decentralised and ‘local food’ based
often the last resort in all such contracts. One should not forget the approach than a centralised ‘procurement & distribution’ system.
immense potential for contract farming in horticulture, fisheries, These would call for a radical transformation of the current incentive
livestock, nutraceuticals, medicinal and aromatic plants etc. structure for agriculture, food management system and water use
policy. The scope of this paper does not permit a detailed outline of a
Create an ecosystem for Farmers’ Collectives
way forward, but the above is to indicate the direction in which this
FPOs are effectively new generation cooperatives. Government has compact needs to move.
fixed a target for registering 10,000 additional FPOs. Excessive
Food systems-based sustainable agriculture
emphasis on targets in institution building come at the cost of quality.
In any case, FPOs do face a large compliance burden in terms of Probably, the time has come to move towards a food system-based
adhering to the provisions of the Companies Act. The Producer approach. Critics and ‘agnostics’ point out the difficulties in designing
Company model may not be suitable for a small number of farmers a food system approach given the current conditions in India. It is true
that designing a full-fledged food systems approach in the complex There are hardly any incentives for water conservation, rainfed
environment of India’s agriculture with varying resources, aspirations agriculture and agro-ecology related services. This incentive structure
and challenges, is in itself a daunting task. The complexities of has to shift to a more nuanced and balanced one if sustainable
consumer behaviour and the challenges of quantification of supply agriculture has to be promoted and net carbon neutrality achieved.
and demand impose severe constraints on designing a comprehensive
food system-based policy. But nothing prevents policy makers from Redesigning the Minimum Support Price mechanism
taking a few initial, even if tentative, steps towards a food system- Assured Minimum Support Prices are announced by the Government
based approach. The policy, therefore, has to move towards a for 23 crops (of which sugarcane is under a mandated minimum price
‘sustainable food systems’ approach ensuring profitability for the regime as mentioned earlier). These prices are calculated by the
farmer (economic sustainability) broad based benefits for society Commission on Agricultural Costs and Prices based on the cost of
(social sustainability) and a positive or neutral impact on the natural cultivation and a predetermined profit (50% or more) level. However,
environment (environmental sustainability). in effect, procurement at MSP happens only for wheat and rice and
Rainfed agriculture, livestock, poultry that too only in states with large surpluses and well-developed
infrastructure. A shift to an equitable system would involve taking
A sustainable food systems approach will necessarily give more care of farmers who cultivate crops other than the 23 crops (these 23
emphasis to rainfed agriculture. The paradigm has to shift from crops account for only 28% of Agri-GDP) and reducing the high
‘irrigated high input agriculture’ to more farmer and agroecology transaction costs of physical handling (as high as 40%) of these
centric sustainable agriculture. As mentioned earlier, this transition commodities. In addition, the current system has also led to excessive
has to be calibrated keeping economic, social and ecological procurement of wheat and rice resulting in problems of disposal. The
considerations. Nutrition considerations would warrant a higher food subsidy burden (a substantial percentage of this is consumer
emphasis and higher outlays on livestock and poultry. subsidy) is going up and reaching unsustainable levels. Attempts to
export surpluses have met with complaints of violation of WTO rules
Compensation for loss since prohibited subsidies are involved. It will become increasingly
Insurance schemes, even after many revisions, have not been able to difficult to continue with the current system in spite of persistent
meet the needs of the farmers. These schemes have generally been demands from farmers’ unions for a mandatory MSP. This is not to
confined to crop losses in adverse weather events and have not found say that farmers do not need price support, they do need financial
whole hearted acceptance by farmers for a number of reasons. In any support, but in a simpler and more equitable way covering more crops
case, there exist no insurance cover for income loss either due to and benefitting small and marginal farmers. Therefore, MSP has to
market failure or due to policy interventions by Government. The transform to a price support mechanism, different from an assured
income loss aspect of agriculture, which hurts farmers most, needs a purchase mechanism. A redesign of the price support system is
more detailed analysis and corrective measures. required, particularly in favour of farmers who grow nutri-cereals and
pulses in rain fed conditions.
Negotiable Warehouse Receipts
Shift to an Income Support Model and Direct Benefit Transfers
The instrument of ‘negotiable warehouse receipts’ was introduced
with the setting up of the Warehousing Regulatory and Development Support to farmers will, given the conditions above, move to an
Authority under the Warehousing Regulation and Development Act income support model and will cover all small and medium farmers.
2007. However, even after more than a decade of its existence, the Since subsidies on chemical inputs and ‘personalised’ irrigation
authority has not realised even a reasonable portion of its potential. It systems will have to be tapered down, the shift to a Direct Benefit
is time to take a close look at the functioning of this authority and Transfer is inevitable. As underlined earlier, this transition has to be
make it count for the farmers. sequenced and managed well. While the budgetary outlays on overall
support to farmers may go up temporarily, this new system will be
Food loss & waste more equitable, efficient and WTO compatible.
The cost of food lost in the agricultural value chain is passed on, Procurement delinked from MSP
mostly to the farmer and in a few cases to the consumer. There are
different estimates of loss by different agencies with respect to A redesign of the current MSP regime, as mentioned above, would
agricultural commodities: perishables and others. What is significant, warrant a delinking of procurement from MSP. While MSP has to
without getting into a discussion on the quantum or value of the loss, operate as a price or income support mechanism, procurement for
is that the levels of these losses are unacceptable and can be public distribution should use the market purchase route. Use of
minimised. A small percentage reduction in the loss in the food chain warehouse receipts, futures markets, decentralised operations etc.
is more cost effective than additional production. Adequate emphasis should bring a paradigm shift in these operations. Effective use of the
on reducing losses at various stages in the chain has been lacking and market instruments for procurement will help the market function
requires immediate intervention. Food wastage, however, though large better.
,is a behavioural issue at the consumer level and needs serious Redesign PDS; Local for local
attention.
A shift in the current Public Distribution System is also called for, to
Incentives ensure better participation by local farmers and to ensure diet
The current incentive structure traces its origins mostly to the green diversity. The ‘basket of commodities’ in the PDS needs to undergo a
revolution. Subsidies are provided for irrigation, consumption of change to include more millets, pulses and the like. This is possible
chemical fertilisers, insecticides, and intensification of production of only if local ‘purchase and distribution loops’ are created within the
key crops (primarily rice and wheat). In addition, there is Minimum PDS system. The redesign of the system should place higher emphasis
Support Price for 23 notified crops, though implemented mostly for on local produce, and provide for a more decentralised and innovative
rice, wheat and sugarcane (mandated by law in the case of sugarcane). procurement and distribution.
Institutions •Growing commercial use of TK based resources also makes them
increasingly vulnerable to misappropriation and misuse by third
A new paradigm for agriculture would also need a different set of parties.
institutions. Failure to create efficient farmer focussed institutions has
been one of the major problems in the transition. Almost all market •The interconnectedness of national and global legal regimes on TK
reforms are perceived as pro corporate and anti-farmer. The trust protection and constant evolution of the debate calls for policy efforts
deficit in various government institutions need a surgical fix. A towards adapting to changing requirements.
restructuring of some of the other institutions in research, extension
and marketing is also urgently required. •The National Intellectual Property Right (NIPR) Policy, 2016,
acknowledges that there is ‘considerable unexplored potential for
Set up a Consultative Agri council developing, promoting and utilizing traditional knowledge of India’
and the need to reach out to the less visible IP generators like the TK
An agricultural council with representation from the states on the lines holders.
of the GST council is one of the suggestions which seems to have
found resonance among some policy makers. It is an idea worth trying 2. Definition of TK
in spite of doubts about its efficacy. It may not become an empowered
committee like the GST council, it will, at the least, provide a •An accepted definition on TK is yet to evolve at the international
consultative forum for the states to come to an understanding on how level. Major international conventions like Convention on Biological
agriculture can be re-organised for the benefit of farmers and the Diversity (“CBD”), WTO and ITPGRFA [International Treaty on
economy. Plant Genetic Resources for Food and Agriculture] have not defined
TK.
Create an expert advisory group
•WIPO defines TK as “knowledge, know how, skills and practices that
An expert advisory group consisting of policy experts, scientists from are developed, sustained and passed on generation from generation
various disciplines, market leaders, IT specialists, expert farmers etc within a community, often forming a part of its cultural or spiritual
should be set up to continuously advise the Government on agriculture identity.”
related issues. Most problems arise from ‘silo driven’ thinking without
cross fertilisation of ideas. A multi disciplinary group can bring •IGC [Intergovernmental Committee on Intellectual Property and
cohesion in policy. Genetic Resources, Traditional Knowledge and Folklore] Glossary
defines TK as “Traditional Knowledge refers to knowledge
Data digitisation originating from indigenous peoples, local communities and/or other
beneficiaries that may be dynamic, and evolving and is the result of
Use of data in planning and in assisting farmers has remained an intellectual activity, experiences, spiritual means, or insights in or
incomplete task. A clear policy on data collection, data stacking, form a traditional context, which may be connected to land and
ownership and rights of access and use needs to be put in place. The environment, including knowhow, skills, innovations, practices,
oft repeated slogan ‘data is the new oil’ and the rush of companies to teaching, or learning.”
access data has planted doubts in the minds of the farmers. Their
concerns needs to be addressed in terms of data privacy and public 3.Indian efforts towards protection of TK
good. Government should be able to communicate to them the
potential gains of data-based decisions. 3.1 Legislations

CHALLENGES Forest Conservation Act, 1980

As new challenges appear in the form of climate and markets, •While the Act may not directly regulate medicines and agriculture, it
Governments will respond to these in many ways. Farmers are does have an impact on medicinal plants. Medicinal plants form the
becoming more aspirational, better informed and restless. The principal portion of Traditional Medicinal Knowledge system.
conventional idea that farmers need to do their bit for the food and •As per Section 2 of the Act, ‘de-reservation of forests or use of forest
nutrition security of the nation is fine, but they expect a fair land for non-forest purpose’ requires prior approval of the Central
compensation for their services, not only for the food, feed, fibre and Government and ‘non-forest purposes’ include cultivation of
fuel they produce, but also for protecting and nurturing the farming ‘horticultural crops of medicinal plants’. It thus restricts the powers of
ecosystem. state governments for clearing forest land for purposes of cultivation
In the new farming systems, especially in food and agro-ecology of medicinal plants.
based systems, women will play a central role in the future. The Protection of Plant Varieties and Farmers’ Rights Act, 2001
discussion around feminisation of agriculture has to shift to women
centric agri-food-nutrition ecology systems. •PPVFRA was enacted to fulfil India’s obligations under Article
27.3(b) of the TRIPS Agreement.
(refer to articles from EPW by Bhanu also)
•The Act recognizes the contribution of traditional, rural and tribal
communities’ knowledge in the country’s agrobiodiversity. It makes
provisions for benefit sharing and compensation and also protects the
traditional rights of the farmers.
TRADITIONAL KNOWLEDGE
•The PPVFR Authority is an agency concerned with protection of TK.
1.Introduction The main functions of the Authority with relevance to protection of
TK are:
•Traditional Knowledge (“TK”) of medicine in the Indian context is
closely associated with knowledge of plant genetic resources. o Documentation, indexing and cataloguing of farmers’ varieties;
o Registration of extant varieties; the product of TK as GI, it can be continued to be protected
indefinitely by renewing the registration when it expires after a period
o Maintenance of the National Register of Plant Varieties; of ten years.
o Maintenance of the National Gene Bank.; and •Under the Act, a GI cannot be assigned or transmitted thus ensuring
o Recognizing and rewarding farmers, community of farmers, that it does not pass on to the hands of those who are not holders of
particularly tribal and rural community engaged in conservation, the knowledge.
improvement, preservation of plant genetic resources of economic •The Act also prohibits registration of a GI as a trade mark, thereby
plants and their wild relatives. preventing appropriation of TK in public domain by an individual as a
Biological Diversity Act, 2002 (“BDA”) trade mark.

•The BDA was enacted to fulfil India’s obligations towards CBD. •While the knowledge involved may not get protected under the GI
Act, the name of the product produced through TK receives
•It does not refer to TK per se; the provisions refer to TK as one protection.
‘associated withBiological Resource (BR) which is derived from
India’. 3.3 Institutions

•The provisions which are applicable to ownership of BR are also •NGOs and Civil Society Organisations have played an important role
applicable to TK. in protecting TK, with conservation of genetic resources being
undertaken by institutions like M.S. Swaminathan Research
oAccess Provisions: The BDA delineates the conditions under which Foundation, Gene Campaign and Navdanya.
persons, commercial firms, and other institutions can access BR
occurring in India and the knowledge associated with the BR, for •Research, documentation, promotion and advocacy on TK protection
research or for commercial utilisation or for bio survey and bio has been undertaken by Kalpavriksh, the Society for Research and
utilization. Initiatives for Sustainable Technologies and Institutions (SRISTI),
Deccan Development Society, CUTS international, ATREE and
oBenefit Sharing: The BDA also contains elaborate provisions for Centre for Indian Knowledge Systems.
benefit sharing arising out of utilisation of the BR.
•The role of these organisations has been critical in the development
oBenefit claimers are defined as “conservers of BR, their by-products, of the narrative on TK protection and also in legislations related to TK
creators and holders of knowledge relating to the use of such BR, protection such as BDA and PPVFRA.
innovations and practices associated with such use and application”
3.4 Registers and Libraries
oIt provides for both monetary and non-monetary benefit sharing
along with national, state and local biodiversity funds for channelizing Traditional Knowledge Digital Library (“TKDL”)
benefits for local communities conserving the knowledge of the •India undertook defensive protection of TK through the development
resources. of a digital database in the form of the TKDL in 2001.
Scheduled Tribes and Other Traditional Forest Dwellers (Recognition •It is arranged in a patent search friendly format, is accessible in five
of Forest Rights) Act, 2006 international languages and is based on an innovative classification
•The Act specifically ensures rights to forest dwellers to protect, system Traditional Knowledge Resource Classification (TKRC).
regenerate or conserve or manage any community forest resource •It serves as an important source of information on prior art on the
which they have been traditionally protecting and conserving for Indian systems of medicine.
sustainable use.
•The TKDL is considered a pioneer initiative to prevent
•It recognises the right of access to biodiversity and community right misappropriation of the country’s traditional medicinal knowledge.
to IP and TK related to biodiversity. However, the absence of any
provision elaborating how such protection shall take place is a major People’s Biodiversity Registers:
drawback of the Act.
•The Biological Diversity Rules, 2004 stipulate that “the main
3.2 IPR Provisions function of the Biodiversity Management Committee is to prepare
People’s Biodiversity Register (PBR) in consultation with local
The Patents Act, 1970: people. The Register shall contain comprehensive information on
•Section 3(p) states, “an invention which, in effect, is traditional availability and knowledge of local biological resources, their
knowledge or which is an aggregation or duplication of known medicinal or any other use or any other traditional knowledge
properties of traditionally known component or components” is not an associated with them”.
invention and, hence, not patentable. 3.5 Initiatives
•TK of breeding methods is protected from being patented by a National Biodiversity Action Plan
provision that excludes “essentially biological processes for
production or propagation of plants and animals”. •There are two mandatory unqualified obligations of CBD on all
Parties - preparation of National Biodiversity Strategies and Action
The Geographical Indications of Goods (Registration and Protection) Plans (NBSAPs) and National Reports.
Act 1999
•The Action Plan has very specific provisions for protection of TK
•The Act facilitates protection of collective rights of the rural and such as developing sui generis system for protection of TK and related
indigenous communities and their TK. By registering an item which is
rights including IPRs, documenting bio-resources and associated known for its ability to purify blood, fight parasites, heal wounds, and
knowledge, promoting and strengthening TK and practices, and treat skin infections.
harmonising provisions concerning disclosure of source of biological
material and associated knowledge used in the inventions under the •In 1995, two American researchers (of Indian origin) obtained a
Patents Act, PPVFRA, and BDA, to ensure sharing of benefits by the patent for the use of turmeric for wound healing. This sparked outrage
communities holding TK, from such use. in India. Many Indians viewed it as an example of biopiracy.

National Wildlife Action Plan 2017-2031 •The Indian government, along with various organizations and
activists, protested against the patent. They argued that turmeric had
•Some of the key features of the Plan are conservation of threatened been used in Ayurvedic medicine for its healing properties for
species of flora especially local endemics and highly traded species generations, and therefore, it should not be subject to patenting by
such as medicinal plants and orchids, identification and validation of foreign entities.
TK available in various parts of the country and use of mobile
technology to develop ‘Digital Field Guides’ for easy identification of •The Indian government and various groups presented evidence of the
various wildlife goods and their derivatives. long-standing use of turmeric in traditional Indian medicine and
argued that the patent was unjust and illegitimate.
National Environment Policy, 2006 :
•The efforts to challenge the patent eventually succeeded, and in 1997,
•This calls for enhancing and conserving environmental resources the United States Patent and Trademark Office (USPTO) revoked the
which includes biodiversity and TK, and utilize TK for environment patent for the use of turmeric in wound healing. The decision was seen
conservation and ‘unlocking the value of genetic diversity’, encourage as a victory for India and for the protection of traditional knowledge.
cultivation of traditional varieties of crops and traditional water
conservation efforts, among others. This case brought significant attention to the issue of biopiracy and
the need for stronger intellectual property protections for traditional
National Intellectual Property Rights Policy 2016 (National IPR knowledge and indigenous innovations. It also raised awareness about
Policy): the importance of preserving and respecting traditional practices and
knowledge systems.
•Although India does not have a national policy on TK, the National
IPR Policy contains specific recommendations on TK.

•In fact, by including TK protection within the ambit of the IPR 2.Neem
Policy, India has raised the level of protection that it would like the
holders of such knowledge to that of the owners of other IPRs •Neem, a tree native to India and parts of South and Southeast Asia,
has been used for traditional medicine for centuries.
•The policy advocates that activities for promotion of TK have to be
conducted with effective participation of TK holders. •Its medicinal properties made it popular across the tropics, serving as
a natural medicine, pesticide, and fertilizer.
•India’s rich TK should be promoted with effective involvement and
participation of TK holders who should be provided necessary support •Early Indian texts highlighted its uses as an insect repellent,
and incentives for furthering the “knowledge systems that they have medicine, and cosmetic. However, when W.R. Grace and Co. patented
nurtured from the dawn of our civilization” a neem extract as an insecticide and fungicide, it sparked controversy,
particularly in India, where neem had long been used.
•In regard to the TKDL, the policy has recommended expanding its
ambit and using it in future for R&D. It also recommended •The patent was eventually revoked by the European Patent Office
documenting oral TK with adequate precautions as to maintaining its (EPO) in 2000 after opposition from international NGOs and Indian
integrity and with safeguards to prevent misappropriation. farmers who argued that the claimed invention was not novel.

•Neem extracts are still widely used today to combat pests and
diseases in crops, as well as for treating various ailments like colds,
BIO-PIRACY flu, malaria, skin diseases, and even meningitis.

Introduction

Bio-piracy (also known as scientific colonialism) involves the Legal provisions for checking bio-piracy in India
exploitation of biological resources and traditional knowledge without
acknowledgment or compensation to the communities that developed
that knowledge. 1.National Policy and Macro level Action Strategy on Biodiversity
Illustrations (1999)

Clear examples are how US companies once patented the health •As a member of the CBD, India’s main goals as part of this strategy
benefits of turmeric, and the pesticidal qualities of neem extracts were to get everyone involved - state governments, local communities,
which had been used in India for many years. They are briefly NGOs, industry, and more.
described below: •They wanted to understand the value of biodiversity through research
1. Turmeric and development.

•Turmeric, a spice in Indian cooking, has been used for ages in •Plus, they aimed to make sure India gets benefits from its biological
traditional medicine like Ayurveda. It's grown in East India and resources and that indigenous communities benefit too, since they're
the ones preserving traditional knowledge and biodiversity.
2. PPVFRA, 2001 •TK is also recognized in Article 16 as a vital ‘technology’ for
effective practices of conservation and sustainable use of biodiversity.
•This Act protects the rights of plant breeders and gives farmers the
ability to register new varieties they develop. The Bonn Guidelines (2002)

•It also lets them save, breed, and share these varieties, with •The Bonn Guidelines (on access to genetic resources and the fair and
provisions for benefit sharing with farming communities. equitable sharing of the benefits arising from their utilization) are an
important step in elucidating the CBD.

The Nagoya Protocol (2010)

3.Biological Diversity Act, 2002
•The Nagoya Protocol covers traditional knowledge associated with
•This Act controls access to biological resources and traditional genetic resources. The Protocol expands upon the CBD provisions
knowledge to make sure everyone shares the benefits fairly. establishing a substantive regime governing Access and Benefit-
•It has established the National Biodiversity Authority to oversee Sharing (ABS).
things and advise the government on conservation and sustainable use •The purpose of the Protocol is to provide legal certainty and clarity in
of resources. implementing the CBD’s third objective – access to genetic resources
and the fair and equitable sharing of benefits arising from their
utilization.
4.Patent Second Amendment Act, 2002 and Patent Third Amendment
Act, 2005 •The Protocol is binding on the states that have ratified it, and this is
one of the key achievements. Highlights include Global Clearing-
•These amendments prohibited the granting of patents for plants, House and Multilateral Access and Benefit-Sharing mechanisms. The
animals, and traditional knowledge. ABS Clearing House (ABSCH) enables those who are using, or
intending to use, genetic resources under the sovereignty of
•Furthermore, India’s patent laws now require “mandatory disclosure
Contracting Parties to be aware of, and comply with, relevant laws
of source and geographical origin of the biological material in the
and regulations. The ABSCH plays a key role in the issuance of
specification” when used in an invention.
Internationally Recognized Certificates of Compliance.
India has been working hard to protect its biodiversity and traditional
knowledge. Despite facing challenges like biopiracy, it's made
significant progress.

PROTECTION OF PLANT VARIETIES AND FARMERS

RIGHT ACT, 2001 + 9 RIGHTS OF FARMERS + PEPSICO+
CONVENTION ON BIOLOGICAL DIVERSITY (“CBD”)
MUSTARD CASE STUDY
Introduction
PROTECTION OF PLANT VARIETIES AND FARMERS
•The CBD is one of the first international conventions to mention RIGHT ACT, 2001
traditional knowledge and has since become the principal international
Introduction
instrument explicitly acknowledging the role of traditional knowledge
and local communities as knowledge holders in biodiversity -The TRIPs agreement, under Article 27.3(b), offers member
conservation. countries the option to adopt an effective "sui generis" system for
plant variety protection.
•The Convention was signed by 150 States during the Rio “Earth
Summit” in June 1992 and entered into force on 29 December 1993. -India, having ratified the TRIPS agreement, was required to make
provisions to implement it. Consequently, it enacted the Protection of
Plant Varieties and Farmers Rights Act, 2001 (PPVFRA), to establish
Key provisions an effective system for protecting plant varieties, farmers' rights, and
encouraging new plant variety development. The PPVFRA also
•For the purposes of TK protection, the key sections of the CBD established the PPVFR Authority.
include Articles 8(j), 10 (c), 15, and 18 (4).
-This Act grants Intellectual Property Rights to breeders and farmers
•In its Article 8(j), the CBD recognizes indigenous and local who develop new or existing plant varieties, recognizes farmers'
communities’ contribution to biodiversity conservation, calls for contributions to plant genetic resources (PGR), and protects Plant
respect and support for their knowledge, innovations, and practices, Breeder’s Rights (PBRs) to stimulate research and development for
and confirms indigenous people’s rights over the knowledge they new plant varieties.
hold.
-The Act faced its biggest challenge when PepsiCo India initiated
•The other relevant articles, i.e., Articles 10 (c), 15, and 18 (4), legal proceedings against potato farmers in Gujarat for allegedly
provide a general obligation for cooperation in the promotion and growing its registered potato variety under the PPVFRA.
conservation of biodiversity and the ability of states to design systems
for the sharing of benefits arising from the use of such biodiversity History (if asked)
resources and knowledge. All these are subject to the existence of
-The history of the PPVFRA dates back to 2001 when it was enacted
national legislation.
following extensive debates in India. These discussions arose after
India's accession to the WTO in 1995 and its agreement to adhere to farmers. It is fundamental to the conservation role performed by
TRIPS. farmers.

-India faced a choice: either to enact a law safeguarding the interests The PPVFR Act, therefore, allows this right on seed to all varieties,
of farming communities or to adopt the framework of plant breeders’ including varieties registered under this Act [Section 39 (1) (iv)]. The
rights outlined by the UPOV Convention. India rejected the latter Act restricts farmers from selling seeds of a protected variety in
option primarily due to UPOV's 1991 version, which restricted packages and containers with labels bearing its registered name. To
farmers' freedom to reuse farm-saved seeds and exchange them with further safeguard this right on the seeds of registered varieties, the Act
neighbors. prohibits use of technologies like the terminator gene technology,
which destroys the germination capability of saved seeds [Section 18
DEFINITION OF FARMER BY ACT (1) (c)].
While a farmer is widely understood to be the person husbanding Farmers’ Right to Register Traditional Varieties
crops and animals, the definition given in this Act is very unique. The
Act defines the farmer as a person cultivating crops or conserving and The PPVFR Act allows the registration of traditional varieties or
preserving traditional crop varieties or wild species of crops and farmers’ varieties [Section 14]. Registration of the variety grants PBR
selecting them for their useful properties. In other words, the Act on the variety, which allows exclusive legal right to the PBR-holding
recognizes the farmer as a cultivator, conserver and breeder. This farmers to produce and market its seed [Section 28].
definition embraces in all farmers, landed or landless, male and
female. Farmers are awarded PBR by the Act on their recognition as breeders.
Traditional varieties developed or conserved by a community of
FARMERS ARE ELIGIBLE TO REGISTER VARIETIES farmers and new varieties developed by one or more farmers are
eligible for registration. In the case of registration of a traditional
The PPVFR Act allows the registration of three types of plant variety, it is important to involve all communities associated with its
varieties. conservation, if there is no clear evidence to establish an exclusive
New varieties are those varieties newly developed by either scientist role for the origin of the said variety. Similarly, when a variety
breeders or others including farmers. developed by a farmer is registered, it is important to recognize
spousal contribution under joint ownership.
Extant varieties are those Indian varieties bred by the public and
private research system and officially released for cultivation by the Farmers need not have to pay any fee either to register their varieties
State or Central Government and have not completed 15 years from or to renew these registrations [Sections 18, 44]
the date of release. Extant varieties also include farmers’ varieties and Farmers’ Right for Reward and Recognition
other varieties of common knowledge and in public domain.
In recognition of the important role farmers have been playing for the
Farmers’ varieties are those traditional varieties developed and conservation of varietal wealth of crop plants, the PPVFR Act has a
conserved by farmers. This includes the landraces, folk varieties and provision to reward and recognize individual farmers or farming and
wild species of crop plants, about which farmers possess useful tribal communities for such contribution [Sections 39 (1) (iii)].
knowledge. Most of these varieties are usually developed and According to the Act, a National Gene Fund is to be created to
conserved collectively by community of farmers rather than by facilitate reward and recognition to eligible individual farmers and
individual farmers. Hence, the Act recognizes that varieties conserved communities.
by communities of farmers are also eligible for registration.
Farmers’ Right for Benefit Sharing
OTHER FEATURES OF THE ACT
The Act provides for equitable sharing of the benefit earned from the
Other important features of the Act are the provisions with regard to new variety with farming or tribal communities that had contributed
(1) researchers’ rights, (2) benefit sharing between breeders and varieties used as parents [Section 26 (5)].
farming or tribal communities who have contributed to the genetic
diversity used by the breeder, and (3) the establishment of a national All applicants who seek to register new varieties are required to
gene fund to promote conservation. declare the source of the varieties used as parents for breeding new
varieties [Section 18 (e), (h)]. Farmers are given opportunity to submit
objectives of this Act is to promote research in plant breeding so that claims for benefit share, when their variety is used as parents [Section
seeds of better plant varieties are made available to farmers. Hence, 26 (2)].
the researchers’ rights (RR) provided in the PPVFR Act allow all
researchers in India legal access to any plant genetic resource The PBR holder of the variety is required to remit the awarded benefit
available in the country and its free use for the purpose of research. share in the National Gene Fund [Section 26 (6)]. The benefit share
However, this right for free access, according to another Act of the may be disbursed from the National Gene Fund to the eligible
Government of India, named the Biological Diversity Act, 2002 is individual, community or institution [Section 45 (2) (a)].
regulated on the basis of nationality of the researcher and whether the
research is conducted in India or outside. Farmers’ Right to get Compensation for the Loss suffered from
the Registered Variety
NINE RIGHTS OF FARMERS
In the event farmers are not able to achieve the claimed performance
Farmers’ Right on Seeds on having cultivated under the specified conditions, the PBR-holder
will be made liable to pay compensation to affected farmers [Section
This right includes the right to save the seed from one’s crop and use 39 (2)].
the saved seed for sowing, exchanging, sharing or selling to other
Such claims for compensation are made to the PPVFR Authority in or her at the time of such commission. This exceptional provision is
Form PV-25. The Authority on confirmation of the compensation provided in the Act in view of the low legal literacy of tradition-bound
claim decides the amount of compensation to be paid by the PBR- Indian farmers and to discourage petty legal harassment to farmers
holder. For establishing the compensation claim farmers may be from seed companies. This highlights the importance of legal literacy
required to prove that they had cultivated a specific variety with seed to farmers on this Act, not only to prevent infringement proceedings
marketed by a specific PBR-holder, that they cultivated variety in against them, but also to create capability to access the rights provided
accordance with the recommended practices in recommended region to them.
and that they suffered an estimated loss due to poor performance of
the crop. Compensation claims made by a group of farmers belonging Whether legislation benefits farmers and achieves its mandate
to one region or an association of farmers are likely to be more -Safeguarding farmers’ rights is crucial in a nation like India, where
forceful than claims made by few scattered individual farmers. agriculture is a dominant sector. While the act aims to benefit farmers
Farmers’ Right to receive Compensation for Undisclosed use of comprehensively, the demand for hybrid seeds by breeders may not
Traditional Varieties equally benefit all farmers, especially those who rely on public sector
breeders. The government needs to strengthen this sector, as the
If parental varieties belonged to one or more rural communities, they private sector is much more developed and advanced.
may be denied the opportunity for benefit share due from the new
variety. The communities concerned also may not have the capability -Additionally, PPVFRA should address the ambiguity between extant
to detect such use of their varieties or traditional knowledge in the and farmers’ varieties, as observed in the PepsiCo case. Furthermore,
breeding of a new variety. Under such situations, any third party who the new Seed Bill must be framed in a way that does not directly
has a reasonable knowledge on the possible identity of the traditional conflict with certain provisions of the PPVFRA, such as the 2004 bill.
varieties or knowledge used in the breeding of the new variety, is -Despite its flaws, PPVFRA is still a remarkable piece of legislation
eligible to prefer a claim for compensation on behalf of the concerned that demonstrates a balance between both stakeholders. With a
local or tribal community [Section 41 (1)]. The third party could be an growing framework of Intellectual Property laws, there is ample room
NGO, an individual, a government or private institution. Such for further development through reforms in current legislation and
compensation claims are to be submitted to the PPVFR Authority by judicial interpretations. Moreover, establishing harmony between the
such third party. The Authority on verification of the veracity of the PPVFRA, the Seed Bill, and the Biodiversity Act will make this Act a
claim shall admit the same and decide on the compensation to be model legislation for other countries to draw inspiration from.
awarded.
How law in US and EU is different
Farmers’ Right for the Seeds of Registered Varieties
•European countries instituted separate plant variety protection laws
While allowing exclusive right to the PBR-holder on commercial because patent law was deemed unsuitable for this purpose. In 1941
production and marketing of seeds, the Act directs the PBR-holder to and 1953, the Netherlands and Germany, respectively, granted limited
meet farmers’ demand for seeds of the variety at reasonable prices. protection to breeders to exclusively market the seeds of protected
According to the Act, when the PBR-holder does not satisfy this varieties.
requirement three years after registration of the variety, farmers have
the right to take the matter of non-availability of seed, its poor supply, •Luther Burbank, an American breeder of 800 new cultivars, died in
or its high price to the PPVFR-Authority [Section 47]. 1926. However, with the help of his widow, The Plant Patent Act
(PPA) was passed in 1930. The US was the first country to institute IP
On receiving such complaints and on its verification, the PVP protection for plant varieties in 1930, covering only plants produced
Authority may take remedial actions. One of these actions may be asexually.
enforcement of compulsory licensing.
•By the 1960s, some European countries enacted Plant Breeders
Farmers’ Right for Receiving Free Services Rights Laws, demonstrating that sexually reproduced varieties were
Considering the poor economic capability of farmers and with a view uniform and stable enough to be included in these laws. During the
that this economic weakness shall not be a hurdle for accessing 1960s, several attempts were made to enact similar protection in the
farmers’ rights, the PPVFR Act totally exempts farmers from paying United States, but these efforts were unsuccessful.
any fees [Sections 18, 44]. This exemption is applicable to individual, OTHER JUDICIAL PRONOUNCEMENTS
group or community of farmers. The exemption includes the fees
required to be paid to the Registrar of Plant Varieties for registration 1. Maharashtra Hybrid Seed Co v. UOI [Ambiguity Regarding
of farmers’ varieties, for conducting tests on them, for the renewal of Sale and Propagation of Hybrid Seeds]
registrations and the fees prescribed for opposition, benefit claim, etc.
• Facts: The petitioners impugned PPVFR Authority’s order which
Farmers’ Right for Protection Against Innocent Infringement held that parent lines of known hybrid varieties cannot be registered as
‘new’ plant varieties. It held that if the hybrid falls under the category
All laws have penal provisions stating what constitutes an of ‘extant variety’ about which there is common knowledge, then its
infringement and what punishment is to be awarded to different parental lines cannot be treated as novel.
proven infringements. These aspects of the PPVFR Act are dealt
under Chapter X of the Act. Under legal jurisprudence, violation of a • Held: The High Court decided against the petitioners even
law committed out of ignorance is not held as an admissible though the language of Section 15(3) is ambiguous. The court did so
innocence. A safeguard to farmers against innocent infringement is because it is well established that when there is ambiguity in the
provided in the Act [Section 42]. According to this, a Court is language of a statute, it must be interpreted in a way that furthers the
prevented from prosecution of a farmer on charges of infringement of intent of the lawmakers. The legislative intent of PPVFRA is to
the Act, if the respondent farmer makes an affirmation that s/he was safeguard farmer’s and plant breeders’ rights.
not aware of the legal provision deemed to have been violated by him
Moreover, the Administrative and Legal Committee of UPOV had 2. Aruna Rodrigues & Ors. v. Union of Ministry of
held in a similar dispute that the novelty of the parent lines is lost by Environment, Forest and Climate Change & Ors. [WP (C) No.
commercial exploitation of its hybrid, and therefore such 260/2015]
interpretations are not viable.
Background

These Public Interest Litigations (PILs) challenged the 2022

2. Mahyco (Maharashtra Hybrid Seed Co) Monsanto Biotech v. approval by India’s Genetic Engineering Appraisal Committee
Nuziveedu Seeds [Patentability dispute] (GEAC) for the environmental release of genetically modified (GM)
mustard hybrid DMH-11, citing procedural flaws and risks to
• Facts: Monsanto licensed its Bollgard Technology (“BT”) to biodiversity, health, and farmer rights.
Indian seed companies, including Nuziveedu Seed Limited. Under the
license agreement, these companies were supposed to sell certain Key Issues
seeds and pay a contractually agreed trait value to Monsanto. Later on,
these seed companies demanded a reduction of this trait value because Procedural Flaws:
the Indian government passed new price control orders fixing trait fees -GEAC approved DMH-11 without consulting states (agriculture is a
and the retail prices of seeds. Since Monsanto refused to reduce the State Subject under Entry 4, List II).
trait value, Nuziveedu, stopped paying royalties to Monsanto. In
response, Monsanto terminated their license agreements and filed a -No disclosure of biosafety data or public participation, violating the
suit in the Delhi High Court against Nuziveedu seeking an injunction right to information.
against them for patent and trademark infringement. During the
-Ignored the Supreme Court-appointed Technical Expert Committee
pendency of the proceedings, the defendants filed a counter-claim
(TEC) report (2012), which recommended caution on herbicide-
seeking revocation of the patent.
tolerant (HT) crops.
• Single Judge Bench: The single judge of the Delhi High Court,
Constitutional & Environmental Concerns:
without getting into the issue of the validity of the patent, in view of
the counter-claim at the interim stage, held Monsanto’s termination of Alleged violations of Articles 14, 19, 21, and principles like
the contract illegal, and allowed Nuziveedu to continue using the the precautionary principle and intergenerational equity.
technology, provided that the trait value was paid till the suit was
finally disposed of. [Appeals were filed before a division bench.] Risks of biodiversity loss (India is the origin of mustard) and
unintended consequences of HT crops.
• Division Bench: The Division Bench ruled the patent un-
patentable under Section 3(j) of the Patent Act Supreme Court’s Split Verdict (July 2024)

[This judgment of the Division Bench was challenged by Monsanto Justice BV Nagarathna: Quashed GEAC’s approval, citing
before the Supreme Court.] procedural violations, lack of transparency, and failure to address HT
crop risks.
• Supreme Court: The Supreme Court ruled out the order of the
division bench and upheld the nature of the injunctive relief granted Justice Sanjay Karol: Upheld the approval, emphasizing scientific
by the Single Judge. While restoring the patent, the SC remanded the progress and conditional field trials under strict monitoring6.
suit to the Single Judge for disposal.
Outcome
PEPSICO- FROM PRINTED DOC (BOTH)
The split verdict led to a referral to the Chief Justice of India for a
NOTE- Recently, the Hon’ble Delhi High Court Division Bench set larger bench.
aside a Single Bench ruling that revoked PepsiCo’s registration for
Interim Directions:
‘FL 2027’, a potato variety specifically used to produce Lay’s potato
chips. GEAC must publish biosafety data and consult states/experts before
re-evaluating DMH-11.
According to the Division Bench, registration of a plant variety could
not be withdrawn for procedural reasons, such as incorrect application Mandated a national policy on GM crops via stakeholder
submissions, but rather only for reasons pertaining to validity or consultation.
registration. Accordingly, the Division Bench nullified the PPVFR
Authority order, cancelling PepsiCo’s Plant Variety Protection Significance
Certificate.
The case underscores the tension between agricultural innovation and
Conclusion environmental safeguards, highlighting gaps in India’s GM regulatory
framework.
Considering that India is an agrarian economy, PepsiCo’s victory is
significant. This case continues to shape discussions around plant SUGAR AND SUGARCANE- INTRO TO FRP AND
varieties and their IP protection. Specifically, this case underscores the SUGARCANE CONTROL ORDER (FROM PRINTED DOC)
delicate balance between safeguarding farmers’ rights and REPORT OF TASKFORCE ON SUGAR AND SUGARCANE,
incentivizing private investment in agricultural research. ETHANOL BLENDING, 2 CASES, WTO DISPUTE ON SUGAR
AND SUGARCANE
GM Mustard case study
Report of Task Force – Sugar and Sugarcane Industry
1. Gene Campaign & Anr. v. Union of India & Ors [WP (C) No.
115/2004] Sugarcane Economy in India
India is the second largest producer of sugar globally, and sugarcane is
cultivated on about 5 million hectares of land, accounting for nearly
4% of gross cropped area. The crop supports about 50 million farmers Sugarcane cultivation varying for each state, showing significant
and 5 lakh mill workers. States like Uttar Pradesh, Maharashtra, and decline in sugarcane production. However, Haryana and up show an
Karnataka dominate production. increase or steady sugar and cultivation.

In total, 530 functioning sugar mills, 2/3rd privately owned – esp in UP

– cooperative mills prevalent in Maharashtra.
India is the largest consumer and the second largest producer of sugar
in the world. Brazil has historically led the world in sugar production. Policy Framework and Interventions
However, of late, Brazil has been diverting a large proportion of its India’s sugar sector is governed by several policy mechanisms:
sugarcane to the production of ethanol, and soon India will take over
the position as the world’s leading sugar producer. Despite its ● FRP fixed under the Sugarcane (Control)
importance, sugarcane is a water intensive crop with skewed Order, 1966.
geographical concentration, which strains water resources—especially
in drought-prone regions like Maharashtra. The crop’s profitability ● Minimum Selling Price (MSP) of sugar.
has led to its expansion into ecologically sensitive areas, worsening ● Monthly release mechanism.
regional water stress.
● Export subsidies and buffer stock creation in
case of surplus.
Cyclical and Structural Problems While these measures are meant to stabilize the sector, they also
The sugar industry is plagued by a cycle of: reflect the deep structural distortions in pricing, demand, and trade.

Excess production,

Falling sugar prices, Problems of Sugarcane Farmers

Mounting cane arrears,

Government intervention (such as subsidies or This chapter identifies and analyzes the key issues faced by sugarcane
minimum selling price for sugar), farmers across India, who are often caught between high input costs
and delayed payments from mills.
Followed again by excess production due to attractive
returns in subsequent years.
Delayed Payments - The most pressing issue for farmers is the
chronic delay in cane payments. Due to the mismatch between the
The industry experiences such surpluses in production because State Advised Price (SAP)/Fair and Remunerative Price (FRP) of
farmers prefer to cultivate this crop. This preference arises from the sugarcane and the market price of sugar, mills often operate at a loss,
high rate of return (RoR) received by sugarcane farmers as well as the resulting in arrears to farmers. At times, these dues remain unpaid for
certainty of finding an assured buyer for their produce. The returns on months, severely affecting farmer livelihoods.
cultivating sugarcane are 60%–70% more than most other crops.

The industry faces the classic mismatch between input (sugarcane)

and output (sugar) pricing. The Fair and Remunerative Price (FRP) High Input Costs - Sugarcane cultivation is resourceintensive. Major
fixed by the central government is often outpaced by State Advised cost components include:
Prices (SAP), especially in politically sensitive states like Uttar ● Labour for planting and harvesting,
Pradesh, leading to unsustainable cost burdens on mills.
● Fertilizers and pesticides,
Regardless of the few shortage years now and then, India structurally
has become a sugar-surplus nation. Sugarcane farmers are getting ● Irrigation (electricity/diesel),
more and more attracted to growing sugarcane with higher assured
prices (which has nearly doubled since 2009) as well as assured ● Transport to mills.
marketing. Consequently, sugarcane production is on a growth
trajectory for the last ten years, ever since the concept of FRP for
sugarcane was introduced. Small and marginal farmers, who form a majority, struggle with credit
access and often rely on informal loans.

Comparative Analysis
Agronomic and Technical Gaps - Farmers lack access to:
Brazil, the world’s largest sugar producer and ethanol exporter. Unlike
India, Brazil’s industry is more market driven and integrated with ● Certified seed varieties,
ethanol production, offering better flexibility to handle surplus
sugarcane by diverting it to ethanol. Brazil's cane pricing is linked to ● Scientific crop management practices,
sugar and ethanol realization, ensuring price parity and mitigating ● Efficient wateruse technologies like drip
arrears. irrigation.
 are resolved. This is with respect to overall production cost, pricing
policy, alternative uses of cane, returns to mills, etc.
Most farmers still use flood irrigation, which wastes water and
reduces yields. Also, many are unaware of newer, highyield, It has been difficult for Indian sugar to compete in the international
earlymaturing, and diseaseresistant varieties. market without Government support but this has resulted in other
sugar-exporting countries like Brazil voicing their concerns to the
World Trade Organisation (WTO) against excessive Government
Regional Disparities - Farmers in tropical regions like Maharashtra support being provided to boost sugar shipment from India.
and Karnataka often fare better due to better varieties and higher
productivity. In contrast, subtropical areas like eastern Uttar Pradesh
suffer from low yields and poor extension services.

Cultivation Trends

Sugarcane Pricing Policy Sugarcane is planted in three distinct seasons, i.e. autumn (September
to October), spring/Eksali (January to March) and summer/Adsali
The Sugarcane (Control) Order, 1966, issued under Section 3 of the (July to August).
Essential Commodities Act, 1955, empowers the Central Government
to fix cane prices payable by mills to sugarcane farmers. Under this However, in subtropical regions, where winters are very cold and
provision, the Central Government fixed a Statutory Minimum Price summers are very hot, the most productive months for sugarcane
(SMP) for sugarcane, the basis of which was similar to that of the cultivation span only 4–5 months in a year.
Minimum Support Price (MSP) for 24 other commodities.
Sugarcane is grown on around 5 million hectares, with the largest
The present FRP, which is fixed at Rs 275 per quintal at 10% producing states being Uttar Pradesh, Maharashtra, and Karnataka. It
recovery, is subject to a premium of Rs 2.75 for every 0.1% increase contributes significantly to rural income and employment. However,
in the recovery, over and above 10% recovery. Further, a reduction in the crop is water-intensive, requiring 1,500–2,200 mm of water
FRP at the same rate for each 0.1% decrease in the recovery rate till annually, and is often grown in areas with limited water availability,
9.5% is also built into the pricing mechanism. raising sustainability concerns.

The Commission for Agricultural Costs and Prices (CACP), in their

sugarcane pricing policy report, also stated that the net return on
cultivating sugarcane is 200%–250% higher than cotton and wheat. Efforts by government in recent years
Since sugarcane has a very short shelf life, the responsibility of 1. Extended working capital loans with interest subvention
procurement of cane is on the sugar mills that are mandatorily
expected to pay the FRP on purchase upfront. 2. incentive for exporting raw sugar

The high price of sugarcane promotes the production of sugar far in 3. Facilitated supply of ethanol under (EBP) programme by fixing the
excess leading to fall in prices below the cost of production The remunerative price.
sugarcane farmer, rather than benefiting from the high administered
4. Provided performance-based production subsidies
prices of sugarcane, suffers distress caused by resource crunches with
ex-mills as they are unable to make timely payments for the crop. 5. Created buffer stock of 30 LMT in the 2017–18 sugar season for
which the Government will reimburse the carrying cost of Rs 1175
crore towards maintenance of buffer stock.
Suagr as an export commodity
6. Extended soft loans of Rs 6,139 crore in 2017–18 SS through banks
to the mills for setting up new distilleries and installation of
incineration boilers to augment ethanol production
Exports can be a viable option for disposal of this excess production.
However, many a time it becomes difficult for the Indian sugar 7, To prevent cash loss and to facilitate sugar mills to clear cane dues
industry to compete in the international markets because most of the of farmers in time,
overseas markets are already captured by other sugar-surplus-
producing countries.
Water Use Concerns
Major factor is difference between the cost of cane and cost of
producing sugar in India vis a vis other major sugar-producing Sugarcane consumes over 70% of irrigation water in some regions.
countries. Despite this, microirrigation adoption is very low (~5% coverage).
The Task Force highlights the urgent need to promote drip irrigation
In Brazil, Thailand and Australia, the cane price per ton was USD
and water-efficient practices.
25.11, 27.45 and 24.05, respectively, while in India it was USD 42.30
(in 2017–18 sugar season). This makes nearly a 65% difference in cost
price. As a result, the total cost of producing sugar in India turns out to
be ₹36 per kilo as compared to ₹18.50 globally. Recommendations

Brazil is the leading exporter ● Expand adoption of high yielding, short-

duration, and water-saving varieties.
However, the task force feels that the sugar exports of India can only
be competitive once the internal problems of the Indian sugar industry ● Promote intercropping and crop diversification
to reduce pressure on land and water.
 ● Strengthen extension services and input supply Various measures have been undertaken by the Government of India
systems. to encourage the domestic production of ethanol. The government has
also adopted different pricing methods to boost the supplies of ethanol
for the EBP programme. However, the level of ethanol blending has
Sugar Industry in India: remained low.

A significant push came with the National Policy on Biofuels 2018,

which set ambitious targets: 10% ethanol blending in petrol by
The structure, performance, and challenges of the Indian sugar 2021–22and 20% by 2029–30. The policy also expanded the
industry, a major agro-based sector that processes around 80% of the permissible raw materials for ethanol production to include sugarcane
sugarcane production. juice, damaged food grains, and other biomass. The government has
also adopted different pricing methods to boost the supplies of ethanol
for the EBP programme. However, the level of ethanol blending has
Past reforms by committees remained low.

The broad recommendations of all the committees in general include Attempts to incentivise ethanol production have been made via an
(a) price determination and distribution mechanisms for sugar; (b) interest subvention scheme, namely: the scheme for augmenting and
setting up of new factories; (c) amendments in various laws with enhancing ethanol production capacity. The Government of India has
regard to the sugar industry; (d) increasing productivity of the sugar also allocated additional funds for the scheme. These proposals are
industry; (e) issues with regard to cane-area reservation; etc. estimated to add another 200 crore litres of ethanol production
capacity.
Dr. C. Rangarajan, constituted committee in 2011 - submitted its
report to the Government in October 2012 with 8 broad The amendment of the IDR Act also aims to smoothen inter- and
recommendations. They were (1) removal of levy sugar, (2) intra-state movement of ethanol by giving the Central Government
dispensing of regulated release mechanism of non-levy sugar, (3) exclusive control over it. The possibility of higher blending, beyond
abolition of cane-area reservation system and bonding, (4) doing away 10%, in ethanol-surplus states of Uttar Pradesh and Maharashtra is
with minimum distance norms for sugar mills, (5) liberalisation of also being explored to avoid the movement of ethanol across the
sugar trade, (6) market determination of prices of byproducts with no country.
earmarked end-use allocations, (7) rationalisation of sugarcane
As per data from the Ministry of Petroleum and Natural Gas, ethanol
pricing, and (8) taking out sugar from the purview of Jute Packaging
blending rose to around 6% by 2018–19, aided by favorable pricing
Materials Act, 1987.
mechanisms. A differential pricing policy was introduced to
incentivize ethanol production from various sources: C-heavy
molasses, B-heavy molasses, and sugarcane juice, each with different
Recommendations pricing to encourage efficient utilization.
● Ensure timely payments via escrow To meet blending targets, India aims to scale up ethanol production
mechanisms or payment guarantee funds. to 450–500 crore litres annually. This requires increasing distillation
capacity and encouraging mills to invest in ethanol facilities. Notably,
● Promote revenuesharing pricing models to
1 tonne of sugarcane can yield 70 litres of ethanol, and 1 tonne of
align farmer and mill interests.
sugar is equivalent to 600 litres of ethanol, highlighting the potential
● Strengthen farmerproducer organizations for substitution.
(FPOs) for input access and bargaining power.
Despite the above measures, a major challenge for the successful
● Expand irrigation infrastructure and incentivize implementation of the EBP programme remains ensuring the
watersaving methods. cooperation of its multiple stakeholders. So far, only 11 states have
implemented the amendments to the IDR Act. Several important states
like Delhi, Uttar Pradesh, Haryana, Rajasthan, and West Bengal, etc.,
continue to levy excise controls and trade duties that hinder the
Ethanol Blending
smooth implementation of the EBP programme.
One prime strategy that is being implemented is of using sugarcane
Cabinet Committee on Economic Affairs decided to extend financial
for the production of ethanol and diverting it away from sugar
assistance to sugar mills for enhancement and augmentation of
production. Ethanol Blended Petrol (EBP) programme as a strategic
ethanol-production capacity, with no maximum cap on loan given by
initiative to support the sugar sector, reduce reliance on imported
banks to sugar mills to enhance their ethanol production by way of
fossil fuels, and promote environmentally friendly fuels. Ethanol,
installation of incineration boilers to existing distilleries, installation
produced primarily from molasses—a byproduct of sugar
of new distilleries. Sugar mills, under this scheme, were asked to
production—offers a critical alternative use of surplus sugarcane and
submit proposals on how they plan to enhance and augment their
helps in liquidating excess sugar inventory.India initiated the EBP
ethanol production. The CCEA chaired by the Prime Minister
programme in 2003, but progress remained limited until recent years.
approved interest subvention for all 268 proposals, which amounted to
In 2003, the Government launched the Ethanol Blended Petrol (EBP)
₹2,790 for a total approved loan amount of ₹12,900 crore. In addition,
programme primarily to promote environment-friendly fuels (by
₹1,332 crore was already approved by CCEA in June 2018. It was also
increasing the usage of ethanol) and reduce energy imports. It aims to
decided to extend soft loans by banks to further optimise the ethanol
control carbon emissions while also conserving foreign exchange and
production capacity amounting to ₹2,600 crore.
reducing import dependency, injects liquidity into the sugarcane
sector by providing a sustained demand for ethanol.
Brazilian Experience - Brazil has focused more on diverting a large
proportion of its sugarcane produce towards ethanol production.
Brazil has found a viable solution to meet its energy requirements Observations of the Task Force
through ethanol as its cost of production is very low and reduces
dependence on imports of oil and natural gas.
Key issues identified include the mismatch between FRP/SAP and
Brazil has taken great leaps in the utilisation of its sugarcane to sugar prices, leading to arrears; inefficient use of water; high domestic
produce ethanol in a profitable manner. The main reasons for Brazil’s production costs; and weak export competitiveness. Sugarcane pricing
venture into the ethanol economy are to (1) generate income and and procurement policies were found to be heavily state-dependent
diversify the rural economy, (2) diversify fuel mix to create market and inconsistent across states.
balance, (3) mitigate climate change and reduce air pollution, (4)
enhance energy security through reduction of oil dependence, and (5) The Task Force observed that to ease the overall pressure on mills and
create value for the industry. farmers in the current scenario of the sugar industry, the primary focus
of the SDF should be to bridge the gap and compensate the farmers in
In order to control fuel prices, the Brazilian Government switches to times of excess supply of sugar, at least until sugarcane season 2021–
alternatives between gasoline and ethanol. At times when gasoline 22 by when ethanol production is expected to ease the pressure of
prices go up, people opt for ethanol and vice versa, thereby creating a excess supply of sugar on its market prices.
self-correcting mechanism.
The Task Force acknowledged that while the industry provides high
India can, however, learn from Brazil in terms of making mandatory returns to farmers, it also imposes large fiscal burdens and
blending and utilising this blended fuel in vehicles. Launching FFVs environmental costs. The sugar industry is overregulated, with central
in India could be a wise move, which could run parallel to the and state governments both playing major roles in pricing and
promotion of electric vehicles considering the potential market that is marketing. The observations emphasize that current policies
available for automobile companies. Additionally, India instead of encourage overproduction, misaligned incentives, and inefficient
fixing a mandatory blending rate for ethanol should have a flexible resource usage.
system wherein the rate of blending can change as per the excess stock
of sugar of any particular year. In this way, the volatility in the prices
of sugar can be kept in control.
Additionally, the chapter notes that prior recommendations,
In conclusion, ethanol blending is presented not just as an energy particularly those of the Rangarajan Committee (2012), were largely
solution but as a structural reform to stabilize the sugar industry by unimplemented by states. The need for technological interventions,
diversifying its revenue base and reducing overreliance on sugar sales. such as drip irrigation, and a stronger ethanol blending programme,
It promotes sustainability, improves farmer payments, and supports were also highlighted.
India’s energy security and climate goals.

Saving Water by Shifting Area under Sugarcane Cultivation to

Recommendations of the Task Force
Other Crops

The Task Force proposes comprehensive reforms aimed at improving

This chapter emphasizes the urgent need to reduce water usage in
the viability of the sugar sector. Key recommendations include:
agriculture by shifting sugarcane cultivation to less water-intensive
crops. Sugarcane is a water-intensive crop, requiring 1500–2000 kg of
water to produce 1 kg of sugar, with states like Maharashtra,
Karnataka, and Tamil Nadu facing severe groundwater depletion. The ● The falling/stagnant price of sugar in the recent
Task Force analyzed data correlating sugarcane density with years in the backdrop of a continuous rise in
groundwater stress across districts, identifying areas where immediate sugarcane prices is the biggest problem faced by
interventions are needed. the industry. In the last ten years, the prices of
sugarcane have almost doubled whereas the price of
sugar has hardly risen much. Solution is to Link
sugarcane price to sugar price using a Revenue
The chapter proposes a voluntary incentive-based crop diversification
Sharing Formula (RSF), with a Price Stabilization
strategy. Farmers would be compensated for switching to alternative
Fund to protect farmers.
crops that are regionally viable and consume less water. The
suggested incentive is ₹6,000 per hectare for a three-year period, ● Staggered payment mechanism for sugarcane: 60%
managed by the Department of Agriculture Cooperation and Farmers’ within 14 days, 20% in the next 2 weeks, and the
Welfare in coordination with the Ministry of Jal Shakti. An alternative remaining 20% in a month.
recommendation includes restricting sale slips to only 85% of the
farmer’s area, nudging them to use the remaining 15% for other crops. ● Incentivize crop diversification with ₹6,000/ha for
switching to low-water crops. Further, it is
important to consider modern agronomic practices
The chapter includes comparative return data from alternate crops in that, amongst other things, ensure efficient use of
Uttar Pradesh, Karnataka, Maharashtra, and Tamil Nadu, which water. Hence, wide row spacing like trench
indicates potential for profitable diversification. The overall goal is to planning, spaced row planning, single bud planting,
shift around 3 lakh hectares, helping save water while ensuring farmer pit planting may also be encouraged.
income does not decline.
 ● Due to stagnant and/or declining sugar prices, the price,’ the state government cannot fix the ‘minimum price’ of
liquidity and financial position of the mills has sugarcane. However, as per the Sugarcane (Control) Order, 1966,
remained a major cause for concern, prompting the which has been issued in exercise of powers under Section 16 of the
Government to come out with various support U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953, it is
measures from time to time. Create a Sugar and always open for the state government to fix the “advised price” which
Sugarcane Development Fund by levying is always higher than the “minimum price”.
₹50/quintal cess (exempt for exports) to improve
liquidity. As per Clause 3(1) of the 1966 Order, the Central Government can fix
only the "minimum price" of sugarcane to be paid by producers of
● Enhance ethanol blending to 10% by 2022 and 20% sugar for the sugarcane purchased by them. This is the lowest
by 2030, with mid-term target of 15% by 2024–25. permissible rate. The effect of Clause 3(2) is that a producer of sugar
Every possible support mechanism be enabled to can under no circumstances purchase sugarcane at a price lower than
help upgrade and integrate technology, including the minimum price fixed under Clause 3(1) and there is a similar
through learning from best practices in Brazil, to prohibition on the cane grower and he cannot sell or agree to sell
progress towards diverting raw sugarcane juice sugarcane to a producer of a sugar below the said price.
towards ethanol blending. This will also help
reduce the oil deficit for India and save precious But the 1966 Order, in view of definition of "price" given in Clause
foreign exchange. 2(g) and also the language used in Clauses 3 and 3-A, clearly
contemplates that there can be a price other than the "minimum price"
● There is a need for a comprehensive re-examination of sugarcane fixed under Clause 3(1), namely, the "price agreed to
of export incentives for sugar, so as to align them between the sugar producer and the sugarcane grower or the sugarcane
with India’s commitments to WTO agreements. growers' co- operative society".

● Raise MSP of sugar to ₹33/kg and review it every 6 Issue:

months.
The controversy raised in this case basically relates to the competence
● Promote drip irrigation through subsidies and of the state government to fix the State advised price for purchase of
awareness campaigns. sugarcane by an occupier of a sugar factory over and above the
minimum price fixed by the Central government. It was argued that
● Restructure the industry gradually to reduce over- there cannot be two minimum prices, one fixed by the Centre and the
dependence on state aid. other fixed by the state government.
● Improve export policies, reduce buffer stocks, and The validity of the procedure adopted for ensuring the payment of the
promote jaggery and bagasse utilization. aforesaid price to a sugarcane grower was also challenged.
● Provide flexibility in soft loans for distressed mills On Competence:
and introduce a long-term ethanol pricing formula.
The court examined various provision of the act such as preamble and
● With increased incidences of diabetes and a other provisions such as need for speedy payments, manner of
reduced preference in people for white sugar, there purchasing etc. to come to the conclusion that state govt can fix the
is a case for greater encouragement to the gur price under the act. The preamble of U.P. Sugarcane Act, 1953
industry. On one side, industry needs to adopt provides that it is an Act to regulate the supply and purchase of
better technology for the production of gur, on the sugarcane for use in sugar factories. The word ‘regulate’ embraces
other, there is a need for adopting proper standards. within its fold the powers incidental to the regulation envisaged in
The task force proposes to develop a suitable good faith and its meaning has to be ascertained in the context in
mechanism for adoption of advanced technology by which it has been used and the purpose of the statute. Therefore, the
gur manufacturers and quality standards thereof. power to regulate includes the power to fix the price. Hence, the state
government can fix the “advised price” if it is higher than the
“minimum price” fixed by the central government.
The report calls for a phase-wise, balanced restructuring of the sugar
industry to make it competitive, sustainable, and aligned with national
resource priorities. Repugnancy: Section 16 of the 1953 Act, which confers power on the
state government to fix the remunerative/advised price at which
sugarcane can be bought or sold, is not repugnant to Section 3(2)(c) of
the Essential Commodities Act 1955 and Clause 3 of the Sugarcane
(Control) Order as the price which is fixed by the central government
U.P. Cooperative Cane Unions Federations vs. West U.P. Sugar Mills is the “minimum price” and the price which is fixed by the state
Association and Others (2004) government is the “advised price” which is always higher than the
“minimum price” fixed by the Central government and, therefore,
The Court, in this case, ruled out any conflict between the ‘statutory
there is no conflict. Thus, the same cannot be said to be void under
minimum price’ (SMP) of sugarcane fixed by the Centre and the
Article 254 of the Constitution.
‘advisory price’ fixed by the state government, if the latter is
higher.By virtue of Entries 33 and 34 List III of Seventh Schedule, It is only in a case where the “advised price” fixed by the state
both the Central Government as well as the State Government have government is lower than the “minimum price” fixed by the central
the power to fix the price of sugarcane. The rule is: the central government, the provisions of the central enactments will prevail and
government having exercised the power and fixed the ‘minimum the “minimum price” fixed by the central government would prevail.
On Procedure: West U.P. Sugar Mills Association vs The State Of Uttar Pradesh
(2020)
Contentions: It was submitted by the Sugar factories that after the
State Government makes an announcement of a State Advised Price, Issue: The core issue in this case was whether the State of U.P. has
the occupiers of the sugar factories are compelled to enter into the authority to fix the State Advised Price (SAP), which is required to
agreements with the canegrowers and canegrowers' cooperative be paid over and above the minimum price fixed by the Central
societies in Forms B and C, wherein the State Advised Price is Government?
mentioned. The same price is also mentioned in the parchas issued to
the canegrowers. It was contended that even if the price fixed by the
State Governments is mentioned in the agreements or in the parchas, The court, for answering this question, examined as to whether there
the sugar factories cannot be compelled to pay the said price as they is any conflict between the Tika Ramji & Others, Etc. vs. The State
had never given their consent for recording the State Advised Price in of Uttar Pradesh & Others case of 1956 and the U.P. Coop. Cane
the agreements or in the parchas. The consent of the parties must be Unions Federations case or not and whether there is a need to refer
voluntarily and must not have been obtained under any duress or the matter to a larger Bench of seven Judges?
compulsion and since the sugar mills had never voluntarily agreed to
pay the State Advised Price, the agreements wherein such a price is
recorded is not binding upon them.
On Conflict: The court noted that the factual matrix of both the
decisions were different. In Tika Ramji, it was held that Section 16 of
the UP Sugarcane Act, 1953, does not include the power to fix a price
Court Held: The court negated the contentions raised and held that and the appropriate government to fix the price of sugarcane was the
the State Government in exercise of its regulatory power can fix the Central Government as per Clause 3 of the Sugarcane (Control) Order,
price of the sugarcane. The mere fact that this price is not to the liking 1955 issued under the Essential Commodities Act.
of the sugar factory does not mean that it cannot form the basis for
supply of sugarcane by the canegrowers or canegrowers' cooperative Later, the 1955 order was substituted by the Central Government with
society to the sugar factory. It is well settled that even a compulsory another order issued in 1966. In the 1966 Order from the word "price
sale does not lose the character of a sale. and the minimum price", word "price" came to be deleted and the
power to fix "minimum price" came to be retained.

In Andhra Sugar Mills Ltd. v. State of Andhra Pradesh, the

question of compulsion by law to enter into an agreement was It was the 1966 Order which came for consideration in the subsequent
considered by a Constitution Bench. Under the Andhra Pradesh case UP Cooperative Cane case. Taking note of the changes in the
(Regulation of Supply and Purchase) Act, 1961, the occupier of a Sugarcane Order, the Court in that case held that the power retained
sugar factory had to buy sugarcane from canegrowers in conformity by the Central Government was only to fix the 'minimum price', and
with the directions from the Cane Commissioner. Under Section 21 of that the State had the power to fix price over and above such
the Act, the State Government had power by notification to tax 'minimum price' fixed by the Centre. It was held that the State
purchasers of sugarcane for use, consumption or sale in a sugar Government is not denuded of the power under the Act of 1953 to fix
factory. The petitioner sugar factories filed writ petitions under Article the “State Advised Price” under section 16. This power cannot be said
32 of the Constitution challenging the validity of Section 21 mainly on to be arbitrary or illegal in any manner. The exercise of the power
the ground that as the petitioners were compelled by law to buy cane under section 16 of the Act of 1953 to fix State Advised Price cannot
from canegrowers, their purchases were not made under agreements be said to be irreconcilable with the minimum price fixation under
and were not taxable. The contention here also was negated by the section 3(2)(c) of the Essential Commodities Act, 1955 and clause 3
court. The court here held that under Act No. 45 of 1961 and the of the Sugarcane (Control) Order, 1966.
Rules framed under it, the cane grower in the factory zone is free to
make or not to make an offer of sale of cane to the occupier of the
factory. But if he makes an offer, the occupier of the factory is bound Conclusion: The Court held that there is no apparent conflict between
to accept it. The resulting agreement is recorded in writing and is the decisions in Tika Ramji’s case and U.P. Coop. Cane Unions
signed by the parties. The consent of the occupier of the factory to the Federations, which require to be referred to a larger Bench of seven
agreement is not caused by coercion, undue influence, fraud, Judges.
misrepresentation or mistake. His consent is free as defined in Section
14 of the Indian Contract Act though he is obliged by law to enter The Court, thus, held that both the Centre and the State have
into the agreement. concurrent powers to fix the prices of sugarcane. At the same time, the
price' fixed by the State Government for sugarcane cannot be lower
than the 'minimum price' fixed by the centre.
Thus, the court relying upon this, held that the agreement is one INDIA’S SUGAR AND SUGARCANE DISPUTE – WTO
composite transaction and it is not open to them to contend that the
terms thereof which are to their advantage should be enforced but the This dispute concerns India's domestic support to sugarcane producers
term relating to price notified by the State Government should not be and export subsidies for sugar. Australia challenged:
enforced as their consent in that regard was not a voluntary act. In our
opinion, having regard to the advantages derived by the sugar
factories, they are fully bound by the agreement wherein the State India's mandatory minimum prices for sugarcane (the Fair and
Advised Price may be mentioned and it is not open to them to assail Remunerative Price (FRP) and State-Advised Prices (SAPs)), as
the clause relating to price of the sugarcane on the ground that their market price support within the meaning of the Agreement on
consent was not voluntary or was obtained under some kind of duress. Agriculture, as well as other payments and policies in favour of
sugarcane producers, as non-exempt direct payments or other non- prevails over Article 4.7 of the SCM Agreement, the Panel should not
exempt policies within the meaning of the Agreement on Agriculture, recommend such a time period. The Panel nonetheless found that no
and three assistance schemes, as WTO-inconsistent export subsidies, conflict exists between the two provisions and did not reconsider the
that operate in conjunction with India's Minimum Indicative Export recommended time period of 120 days. In determining this particular
Quotas (MIEQs) or Maximum Admissible Export Quantity (MAEQ), period, the Panel took into consideration, inter alia, the impact of the
and an additional scheme that operates independently. Australia COVID-19 pandemic on the functioning of the public sector in India.
claimed that India's schemes constitute subsidies within the meaning
of the Agreement on Agriculture, as well as subsidies contingent upon Notifications - Regarding notifications, the Panel found that Article
export performance within the meaning of the SCM Agreement. 18.2 of the Agreement on Agriculture contains a mandatory obligation
on Members to submit notifications, and that India violated this
Australia also claimed that by failing to notify its domestic support obligation by failing to notify its domestic support to sugarcane
measures and export subsidies to the relevant WTO committees, India producers and export subsidies for sugar to the Committee on
acted inconsistently with its notification obligations under the Agriculture. The Panel also found that, by failing to notify its export
Agreement on Agriculture and SCM Agreement, or, alternatively, subsidies to the SCM Committee, India acted inconsistently with
under the GATT 1994. Articles 25.1 and 25.2 of the SCM Agreement.

Sugar Sugarcane Australia India Agreement on Agriculture On 24 December 2021, India notified the DSB of its decision to
Agreement on Subsidies and Countervailing Measures General appeal to the Appellate Body certain issues of law and legal
Agreement on Tariffs and Trade 1994 interpretations in the panel report. On 11 January 2022, Australia
informed the DSB that it had taken note of India's notification of its
Domestic support - Regarding India's alleged domestic support to appeal and that, given the current non-operational situation of the
sugarcane producers, the Panel found that, for five consecutive sugar Appellate Body, it considered that all subsequent procedural deadlines
seasons, from 2014-15 to 2018-19, India provided non-exempt set out in the Appellate Body's Working Procedures were suspended.
product-specific domestic support to sugarcane producers in excess of Australia indicated that when the Appellate Body resumes its
the permitted level of 10% of the total value of sugarcane production. functions, it should set the schedule for this appeal. Australia indicated
Therefore, the Panel found that India is acting inconsistently with its its intention to file a written submission and make an oral statement in
obligations under Article 7.2(b) of the Agreement on Agriculture. accordance with the schedule to be determined by the Appellate Body.
The threshold issue before the Panel was whether “market price Australia noted its disagreement with India's appeal.
support” within the meaning of the Agreement on Agriculture only
exists when the government pays for or procures the relevant
agricultural product. India argued that its mandatory minimum prices PESTICIDES MANAGEMENTS BILL, 2020
are not paid by the Central or State Governments but by sugar mills,
and hence do not constitute market price support. The Panel found, Introduction
however, that market price support does not require governments to
-The Bill was introduced in Rajya Sabha by Mr. Narendra Singh
purchase or procure the relevant agricultural product, and thus rejected
Tomar, Minister of Agriculture and Farmers Welfare, on March 23,
India's argument.
2020. This bill is referred to as the standing committee of the
Export subsidies - Regarding India's alleged export subsidies for agricultural department.
sugar, the Panel found that the challenged schemes are export
-It aims to regulate various aspects of pesticides to ensure safety and
subsidies within the meaning of Article 9.1(a) of the Agreement on
minimize risks to humans, animals, and the environment.
Agriculture. Since India's WTO Schedule does not specify export
subsidy reduction commitments with respect to sugar, the Panel found -It seeks to replace the Insecticides Act, 1968.
that such export subsidies are inconsistent with Articles 3.3 and 8 of
the Agreement on Agriculture. Definitions

The Panel also found that under the four challenged schemes, India -It defines pests as any species of animal, plant, or pathogenic agent
provides subsidies contingent upon export performance within the that is unwanted or injurious.
meaning of the SCM Agreement, inconsistently with its obligations -It defines pesticides as substances intended for preventing or
under Articles 3.1(a) and 3.2 of the SCM Agreement. India argued destroying pests in various sectors.
that the “period of eight years” referred to in Article 27.2(b) of the
SCM Agreement continued to exempt India from the application of Spurious Pesticides
the prohibition on export subsidies. This raised the question of
whether this transition period began on the date of India's graduation -They harm crop, soil fertility and the environment.
from Annex VII(b) of the SCM Agreement or from the date of entry -Spurious agrochemicals are responsible for the losses of not just
into force of the WTO Agreement. The Panel found that the eight-year farmers but also producers of genuine agrochemicals and the
transition period under Article 27.2(b) starts from the date of entry government, which loses revenue from the sales of the counterfeit
into force of the WTO Agreement, and concluded that this special and versions of the real farm inputs.
differential treatment provision did not apply to India.
Key Features of the Bill

-Pesticide Data: It will empower farmers by providing them with all

The Panel recommended that India withdraw its prohibited subsidies the information about the strength and weakness of pesticides, the risk
within 120 days from the adoption of the Report, in accordance with and alternatives. All information will be available openly as data in
Article 4.7 of the SCM Agreement. In the interim review process, digital format and in all languages.
India argued that, because Article 19 of the Agreement of Agriculture
Compensation: The Bill has a unique feature in the form of a prices for farmers' produce, and facilitating the transition of surplus
provision for compensations in case there is any loss because of the labor from farming to non-farm occupations.
spurious or low quality of pesticides. If required, a central fund will be
formed to take care of the compensations. Policy Implementation and Support Measures

Organic Pesticides: The Bill also intends to promote organic Subsequently, the government has implemented a plethora of policies,
pesticides. reforms, and developmental programs to support farmers directly or
indirectly. Notably, budget allocations for the Ministry of Agriculture
-Registration of Pesticide Manufacturers: All pesticide manufacturers & FW have seen a substantial increase, indicating a strong
have to be registered and bound by the new Act, once it is passed. The commitment to agricultural advancement. Income support initiatives
advertisements of pesticides will be regulated so there should be no such as the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and
confusion or no cheating by the manufacturers. agricultural insurance schemes like the Pradhan Mantri Fasal Bima
Yojana (PMFBY) have provided crucial financial assistance and risk
KEY ISSUES AND CHALLENGES mitigation to farmers nationwide.
Role conflict of Ministry of Agriculture in regulating pesticides: It Infrastructure Development and Market Access
may be questioned whether the Ministry of Agriculture should
regulate pesticides. The Ministry of Agriculture has the mandate to Infrastructure development has also been prioritized, with initiatives
increase productivity of agriculture and ensure availability of effective like the National Agriculture Market (e-NAM) extension platform
pesticides. This may be in conflict with the need for pesticide facilitating seamless trade and market access for farmers.
regulation to prevent risk to health and the environment. Furthermore, specialized missions targeting specific sectors, such as
the National Mission for Edible Oils – Oil Palm, aim to enhance
Non implementation of certain recommendations: The Bill does not productivity and ensure market linkage for farmers engaged in niche
implement certain recommendations of the Standing Committee on agricultural activities.
Agriculture (2008) such as imposing penalties on misuse of powers by
pesticide inspectors, specifying a one-year timeline for registration of Improvements in Income and Livelihoods
pesticides and providing data protection for registration of new
pesticides. Registration of a new pesticide requires the applicant to The cumulative impact of these efforts is evident in the tangible
submit safety and efficacy data generated over a number of years. improvements witnessed across the agricultural landscape. Surveys
Data Protection provides that the data generated would not be relied conducted by the Ministry of Statistics and Programme
upon to grant registration for the same pesticide to any other person Implementation reveal a notable increase in the average monthly
for a specified period of time. income per agricultural household, reflecting the positive outcomes of
the government's interventions.
Lack of limit on validity of pesticide registration and challenges in
monitoring and testing capacity: There is no limit on validity of
pesticide registration and the onus is on the Registration Committee or
SEEDS SECTOR IN INDIA
the government to identify pesticides for review. The question is who
should be responsible to ensure periodic review of registered LEGISLATIVE FRAMEWORK FOR SEEDS IN INDIA
pesticides. Limited validity of registration places the onus on the
registration holder to ensure periodic generation of safety data to Historically, the seed industry in India has been governed by several
renew the registration. legislative & policy frameworks such as

Conclusion • Seed Act (1966)

The Pesticide Management Bill, 2020, addresses various aspects of • Seed Rules (1968)
pesticide regulation with the aim of ensuring safety and minimizing
risks to health and the environment. However, challenges in • Seed (Control) Order (1983)
implementation and monitoring remain.
• New Policy on Seed Development (1988)
I.Report of the Standing Committee
• Plants, Fruits & Seeds (Regulation of
Doubling Farmers' Income Import into India) Order (1989)

The Ministry of Agriculture & Farmers Welfare has undertaken an • Protection of Plant Varieties and
ambitious endeavor to double the income of farmers, a crucial step Farmers’ Right Act (2001)
towards enhancing the livelihoods of millions across India. This
initiative, propelled by the recommendations of an Inter-Ministerial • Essential Commodities Act, 1955
Committee formed in 2016, has yielded encouraging results, marking including Seeds (1955)
a significant stride in agricultural development.
• National Seed Policy (2002)
Key Focus Areas for Income Growth
• Seed Bill (2004)
The strategic approach outlined by the Committee identified seven
pivotal areas for income growth within the agricultural sector. These • Standing Committee Recommendations
encompassed increasing crop and livestock productivity, optimizing on Seed bill 2004
resource utilization to reduce production costs, enhancing cropping
intensity, diversifying towards high-value agriculture, ensuring fair • Seed Bill 2019.
 All of these legislations were passed to take care of seeds right from The Bill introduces unscientific definitions on “national seed variety”
the production level to marking, labelling, and marketing levels so as and state seed variety in Clauses 17 and 31:
to maintain the quality standards as prescribed by the Central Seed
Committee (formed under the Seed Act, 1966).These laws make (17) “national seed varieties” means those varieties which are
quality seeds and planting material available to a common farmer and cultivated in more than one State•
provide him a mechanism to approach concerned authority for justice. (31) “State seed varieties” mean those varieties which are cultivated
The Seed Bill (2004) was proposed to replace the Seed Act (1966), in one State only
however, owing to several shortcomings it was not passed. The 2019 Seed is the expression of diversity of traits and diversity of the
draft version tries to overcome the drawbacks of the 2004 Bill. agroclimatic zones where seed varieties have been bred by farmers,
What is the need to introduce Draft seed bill, 2019? and to which they are adapted. To describe seeds not according to
their traits and agroclimatic zones, but as “national seed” if they are
• Seed replacement rate– SRR is the measure of how much of the total cultivated in more than one state and state seed variety if they are
cropped area was sown with certified seeds in comparison to farm- cultivated only in one state has no basis in science, but only a
saved seeds commercial basis, to facilitate the marketing and spread of unreliable,
costly seeds from MNCs.
• Quality and Standards of seed variety– it is necessary to have the
high quality of seeds to improve the productivity as well as production Seed registration - The Seeds Bill insists on compulsory registration
of seeds (except farmer’s variety). However, the PPVFR Act was
• Registration of seed variety– registration will help in enforcing the based on voluntary registration. As a result, many seeds may be
accountability to the seller and producer of seed registered under the Seeds Bill but may not be under the PPVFR Act.
• Farmers’ protection– in case of failure of seed to perform at the For instance, a seed variety could have been developed by a breeder
expected level, producer of seed can be compelled provide but derived from a traditional variety. In this case, the breeder will get
compensation to the farmers exclusive marketing rights. But no gain will accrue to farmers as
benefit-sharing is dealt with in the PPVFR Act, under which the seed
HIGHLIGHT PROVISIONS OF THE BILL is not registered
REGISTRATION OF SEEDS Data - As per the PPVFR Act, all applications for registrations should
contain the complete data of the parental lines from which the seed
1. All the varieties of the seeds for sale should be registered. variety was derived. These include contributions made by farmers.
2. The seeds should meet certain required minimum standards to ensure This allows for an easier identification of beneficiaries and simpler
the quality of seeds. benefit sharing processes. But, Seeds Bill, demands no such
information while registering a new variety, thus overlooking the
3. The transgenic varieties of seeds can be registered only after the recording of the contributions of farmers.
applicant has acquired a clearance under Environment protection
Re-registration - The PPVFR Act, which is based on an IPR like
act 1986.
breeders’ rights, does not allow re-registration of seeds after the
4. The process of registration should be time bound. validity period. However, as the Seeds Bill is not based on such
principle, private seed companies can re-register their seeds. They can
RESEARCH AND DEVELOPMENT: In the proposed Bill, there is do this for an infinite number of times after the validity period. Given
a differentiation between the seed producer, seed processor and seed this “ever-greening” provision, many seed varieties may never enter
dealer for the purpose of licensing. However, there is no recognition the open domain for free-use.
of National Level Integrated Seed Companies with R&D capabilities.
Compensation for spurious seeds - Under the PPVFR Act, if a
PRICE CAP: The bill contains provisions for the state and central registered variety fails in its promise of performance, farmers can
government to provide caps i.e. the maximise price at which the seeds claim compensation before a PPVFR Authority. This provision is
can be sold. diluted in the Seeds Bill, where disputes on compensation must be
decided as per the Consumer Protection Act 1986. Consumer courts
DEFINITION OF FARMER: Throughout the Bill, there are
are hardly ideal and friendly institutions that farmers can approach.
attempts to weaken farmers rights, and increase corporate control over
Also, according to the Seeds Bill, farmers become eligible for
seed. The very definition of “farmer” has been changed to allow
compensation if a plant variety fails to give expected results under
corporations and traders to be counted as farmers. The Original
“given conditions”. Sadly, “given conditions” is almost impossible to
definition of farmer excluded any individual, company, trader, or
define in agriculture. Seed companies would always claim that “given
dealer who engages in the procurement and sale on a commercial
conditions” were not ensured. Again, this will be difficult to be
basis. This has been deleted in the current draft. The definition is now
disputed with evidence in a consumer court.
a loose definition without clear exclusion of non-farmers.
What are the advantages of Draft seed bill, 2019?
DEFINITION OF SEED:
• Increased production– registered seeds will give more production as
In the draft Seed Bill new commercial definitions of seed have been
compare to the non-registered seeds
introduced which are guided more by providing corporations like
Bayer/Monsanto easy market access than by the objective of • Quality of seeds– seeds will be tested in the laboratories which will
conserving our rich biodiversity, guaranteeing farmers freedom to ensure good quality seeds which will lead to the increased production
save and exchange seeds they have evolved, and ensuring high
quality, reliable, affordable, ecologically adapted seed for their • Farmers’ welfare– farmers will be compensated in the case of non-
ecosystem and agroclimatic zone are available in the market. performance of seeds as per the expectations. Regulation of prices in
the adverse condition will also safeguard the farmers from paying a Government. The license provided to a seed dealer remains valid only
hasty increase in the prices of seeds for 3 years from the date of its issue which can be later renewed. The
seed dealer has to essentially display the stock position (opening and
• Deterrence– penalties in case of non-compliance with the provisions closing) on daily basis along with a list indicating prices or rates of
of the bill will deter the producers of seed from cheating the farmers different seeds. Under this order, the time period for completion of
• Implementation- the establishment of a separate seed committee will seed analysis in case of any doubt about quality is 60 days compared
result in the better implementation of provisions of the bill to 30 days under Seed Rules. Cancellation of license if obtained
through misrepresentation. Provision for appeal and an appellate has
What are the disadvantages/concerns of Draft seed bill, 2019? also been provided.
• Definition of the farmer– The very definition of “farmer” has been New Policy on Seed Development, 1988
changed to allow corporations and traders to be counted as a farmer.
Farmer means any person who owns cultivable land or any other The policy was formulated to provide Indian farmers with access to
category of farmers who are doing the agricultural work as may be the best available seeds and planting materials of domestic as well as
notified by the Central / State Governments. imported seeds. The policy permits the import of selected seeds under
Open General License (OGL), to make available to farmers high
• Compulsory registration of seeds– many seeds may be registered quality seeds to maximize yield, increase productivity thereby farm
under the Seeds Bill but may not come under the PPVFR Act. For income. The policy allows import under OGL of items such as seeds
example, a seed variety developed by a breeder, but derived from a of oilseed crops, pulses, coarse grains, vegetables, flowers, ornamental
traditional variety. no gain will accrue to farmers as benefit-sharing is plants, tubers, bulbs, cuttings, and saplings of flowers. While the
dealt with in the PPVFR Act, under which the seed is not registered. import of horticultural crops including flowers need recommendation
from Directors of Horticulture, import of crop seeds require
• Data needed to register seeds– as per the PPVFR Act, all
permission from ICAR. ICAR will direct multi-locational trials in
applications for registrations should contain the complete passport
various agro-climatic conditions at least for one season.
data of the parental lines from which the seed variety was derived,
including contributions made by farmers. This allows for easier
identification of beneficiaries and simpler benefit-sharing processes.
Seeds Bill, demands no such information while registering a new
variety. an important method of recording the contributions of farmers
is overlooked and private companies are left free to claim a derived
variety as their own

• Regulation of seed price– vague provision for the regulation of seed

prices appears in the latest draft of the Seeds Bill, it appears neither
sufficient nor credible.

• Compensation- according to the PPVFR Act, if a registered variety

fails in its promise of performance, farmers can claim compensation
before a PPVFR Authority. This provision is diluted in the Seeds Bill,
where disputes on compensation have to be decided as per
the Consumer Protection Act. Consumer courts are hardly ideal and
friendly institutions that farmers can approach. according to the Seeds
Bill, farmers become eligible for compensation if a plant variety fails
to give expected results under “given conditions”. “Given conditions”
is almost impossible to define in agriculture.

• Tracing of seed package– The new Bill or the old one had no
provisions that will make seed packet traceable to the original
manufacturer, etc. Even if traceability was ensured, it won’t be easy to
attribute an episode of crop failure to poor quality of seeds

OTHER POLICIES AND LAWS WITH RESPECT TO SEED

SECTOR IN INDIA

Seed Rules, 1968

The rules have been framed to implement various legislations given

under Seed Act, 1966.

Seeds (Control) Order, 1983

The inclusion of seeds as an essential commodity item under the

Essential Commodities Act, 1955 brought the Seeds (Control) Order.
A person carrying on the business of selling, exporting, and importing
of seeds needs to obtain a license. The Essential Commodities Act,
1955 gives powers to State governments to regulate various aspects of
trading in essential commodities under the supervision of Central