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Modi Government’s New Farm Laws Enables Farmer to Sue Trader and Get Justice

farmer suing traders

The revolutionary farm bills brought by the Modi government have set into motion the process of improving the productivity of farmers while empowering them by ensuring their rights. Testament to this a maize grower from Maharashtra who has become the first farmer to invoke a provision in The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, one of the three recently enacted farm reform laws, suing two traders for not paying money owed him for sale of produce. The food merchants subsequently cleared the outstanding bill of ₹2.85 lakh to the farmer.

Clear Legal Provisions to Protect Farmers

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, commonly referred to as contract farming act, makes it compulsory for buyers to pay cultivators “within three days” of a transaction.

It is important to note here that until this law was shepherded by the Modi government through parliament this September, India did not have a legal mechanism available for farmers to enforce time-bound payments. Taking advantage of this, wholesale food aggregators often make peasants run after them for payments

Maharasthra’s Jitendra Bhoi now has effectively used the provisions of the new law make merchants clear the dues promptly.

On July 19, Mr Bhoi prepared to sell 270.95 quintal (100 kg each) of corn at a rate of ₹1,240 per quintal to two traders. The traders picked the entire produce, making a token payment of ₹25,000 and promising to pay the rest within 15 days.

Bhoi approached authorities in the first week of October, after payments were delayed by nearly four months and in his complaint, the farmer enclosed receipts of the transaction showing the outstanding amount.

According to Section 8 of The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, “The Sub-Divisional Authority shall decide the dispute or contravention under this section in a summary manner within thirty days from the date of its filing and after giving the parties an opportunity of being heard…”

Simply put, in case of payment disputes between a farmer and a trader in new free markets provided for by the recent laws, a magistrate must settle the transaction row within a month.

Acting on the farmer’s complaint, authorities traced the traders, summoning them on October 6.

They faced prospects of criminal action, including arrest. “After studying the case, listening to the farmer, and going through documents, it has been ordered by me that the buyers must make immediate payments owed to the farmer,” the authorities made it clear.

After this, traders renegotiated with the Mr Bhoi himself and made the remaining payment in two instalments.

Ensuring Justice to Small and Medium Farmers

Ever since the three revolutionary farm bills were passed by Modi government, some serial mischief makers who were spreading rumours about new farm laws have been proved false with quick economic justice being done to the farmer.

Once again it is important to note here that none of the parties protesting against the laws had put in place a water-tight legal framework that would ensure any mechanism for farmer to get time bound payments.

As noted economist Shamika Ravi in an article written by her points out “In a nutshell, every aspect of the agricultural market – who could sell (buy), where to sell (buy), and for some commodities, the price – were to be regulated by the government. Unfortunately, over time, such a system was dominated and exploited by large farmers and brokers who had privileged access to the government at the expense of small and medium farmers.”

1991 Moment for Farmers

Eminent agricultural economist Ashok Gulati has also praised the new farm bills, calling them the 1991 moment for farmers and pointed out that “contract farming law minimises the market risks of farmers and establishes a legal environment for contract farming, with the assurance of a price to the farmers at the time of sowing, will help them take cropping decisions based on forward prices.”

The Narendra Modi government, by bringing in these three new farm laws, has liberated farmers from clutches of middlemen and cartels and put in place strong legal mechanism which uphold their rights.

  • Singh

    But the MSP for Maize is Rs 1850, and the trader purchased at 1240.
    Where did the verbal promise of guaranteed MSP vanished??

    However the Trader is punished for non payment which is good.