State Bills on farm trade ignites legal debate, Presidential assent unlikely

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November 2, 2020 2:30 AM

However, SC lawyer Sunil Fernandes noted that, however well-intentioned an Act passed by the state legislature may be, unless the governor signs on it, the Act doesn't become enforceable.

Punjab Legislative Assembly on, October 20, unanimously passed four Bills to negate the Centre’s three contentious farm laws.

The laws passed by Opposition-ruled states Punjab, Rajasthan and Chhattisgarh to override three central laws governing agriculture trade and food stuffs may stumble upon the hurdle of Presidential assent. The opinion is also divided among the legal fraternity over the tenability and/or sustainability of the states’ move. Of course, some see a tenuousness of the ground on which the central laws have been made in the first place, given that Union government has relied on ‘food items’ that are in concurrent list, to legislate, where the new laws also pertain to “agriculture” which is exclusively a state subject.

The central laws are already being challenged in the Supreme Court. Punjab chief minister Amarinder Singh said if the four bills passed by the state assembly on October 20 are not approved by the President, the state would challenge his stance in the court. Singh has also sought an appointment from President Ram Nath Kovind between November 2-5.

According to Supreme Court lawyer Mahesh Agarwal, since “trade, production, supply, and distribution of (food) products falls under the concurrent list, states cannot override laws made by the Central government when they cover the same subject. Another senior SC advocate Anupam Lal Das, however, feels that, while there is a presumption of validity of a law passed by Parliament, in the present case, the source of power to pass these three farm laws are conspicuously missing in the Statement of Objects and Reasons.

SC lawyer Balaji Srinivasan called the emerging situation a ‘tricky’ one. “The proposed legislation of the state governments will require the assent of the President, which requires to be obtained via the office of the governor. Politically speaking, these bills may never get assent. Thus, these (state) laws would be stillborn”.

However, states could still use then route of Government Orders or Executive Orders, to practically enforce what they intend to, in this regard. This would be perfectly legal, says Srinivasan.

Farm sector experts who FE spoke to pointed out that Chhattisgarh and Rajasthan haven’t barred trading below minimum support prices (MSPs), whether in APMC mandis or elsewhere. So, free market that the Central laws seek to create is intact.

Only one of the Punjab laws has said that ‘sale/purchase is invalid’ if done below MSP, but again there is no clarity on consequences of transactions below MSP,” said a former union agriculture ministry official, requesting anonymity.

Of course, Rajasthan’s Bill on contract farming proposes punishment with imprisonment of 3-7 years with or without a fine of `5 lakh “if any person, company or corporate house or any other association or body of persons harasses farmers” However, ‘harrassment’ has been defined by the law as a trader’s refusal to buy crops from farmers despite an agreement and also in case payment is not made within 3 days. “It is not about buying below MSP. But, one good thing is Rajasthan has covered all crops under contract farming for which MSPs are declared whereas in Punjab, it is restricted to wheat and paddy,” said an expert, who is a supporter of the central laws.

Pertinently, all the three states have restored judiciary’s power to decide in case of a dispute between farmer and trader through their bills, whereas the Central laws have vested the power of dispute resolution with sub-divisional magistrate.

Additional solicitor general Madhavi Divan is confident the central laws would prevail.

“India is one common economic market and there must be freedom of trade and commerce across India. India is also a federation with a strong tilt to the Centre. The freedom of trade and commerce across India guaranteed under Article 301 must be available to farmers of India to market their produce so that it reaches the farthest corners of India and they are able to get the best prices which have evaded them on account of local vested interests. So the Central law cannot be negated,” he told FE.

Says advocate Abhinav Mukherji, who represents Bihar and Himachal Pradesh governments in the apex court: “Entry 33 of the Concurrent list empowers Parliament and state legislatures to legislate on agriculture production, supply etc. Any state legislation which is repugnant to Parliamentary legislation on this aspect is null and void unless it obtains Presidential assent under Article 254. Having said that, to make it constitutional, the state government would have to establish that the laws passed by it are under Entry 14 of list 2 i.e. state list. If it does so, then the act would be valid”.

However, SC lawyer Sunil Fernandes noted that, however well-intentioned an Act passed by the state legislature may be, unless the governor signs on it, the Act doesn’t become enforceable.

Punjab Legislative Assembly on, October 20, unanimously passed four Bills to negate the Centre’s three contentious farm laws. The state proposes to exempt farmers from attachment of land up to 2.5 acres and provide for the prevention of hoarding and black marketing of agricultural produce.

The Chhattisgarh assembly, on October 27, approved the Chhattisgarh Krishi Upaj Mandi (Amendment) Bill 2020 that declared the entire state as a ‘market for selling agriculture produce’ to negate the Centre’s farm laws. “The Bill has provision to safeguard the interests of the farmers and at the same time it doesn’t violate any Central laws, thus avoiding confrontation with the Centre,” the state’s agriculture minister Ravindra Choubey had said. He said in this Bill, the term ‘deemed mandi’ has been added to facilitate private markets.

Rajasthan and Punjab have both tried to restrict contract farming by explicitly mentioning that the contracted price of a crop cannot be below its MSP, but the bills passed by their assemblies are silent on crops like cumin, corriander, guar, fennel and several others for which there is no MSP system.

“The amendment in farm produce trading Bill of Punjab says it is punishment if the trader/company (buyer) ‘compels or exerts pressure’ on the farmer to sell below MSP. Why can’t the Bill mention simply that below MSP transaction is an offence,” said V M Singh, convenor of All India Kisan Sangharsh Coordination Committee, which is spearheading the agitation against the Centre’s laws.

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