- States are not farm-houses of Centre
The States constitute important middle tier of three-tier-federation of India, and they are not the ‘farm-houses’ or ‘backyards’ of the Centre. The Constitution of India had an elegant scheme of separation of powers and distribution of powers, which a Government elected for five years only cannot destroy. Agricultural produce, marketing of that produce and its taxing is exclusive domain of the State Governments, which share sovereignty with the Union Government.
State List
Almost all the agriculture related subjects are within exclusive domain of the States’ Legislative and Executive power. There are eight entries in the State List, dealing with the agriculture: Of them Entry 28 mentioning Markets and Fairs, is simple and straight and highly relevant to question the Constitutionality of two Farm laws recently made by the NDA Government. Other Entries are No. 14 (agricultural education and research, pests, plant diseases); No. 18 (rights in or over land, land tenures, rents, transfer agricultural land, agricultural loans, etc.); No. 30 (agricultural indebtedness); No. 45 (land revenue, land records, etc.); No. 46 (taxes on agricultural income); No. 47 (succession of agricultural land); and No. 48 (estate duty in respect of agricultural land).
Centre ‘excluded’
While including certain subjects in the Concurrent List, the Constitution maker were clear to exclude ‘agricultural land’ saying: Entry 6 transfer of property other than agricultural land; 7 is about various contracts not relating to agricultural land; and 41 deals with evacuee property, including agricultural land. This means only if the property is evacuee property, the Union also can exercise power over the agricultural land; otherwise, not.
There is no ambiguity in listing of entries under the Union List and Concurrent List the matters relating to agriculture are absolutely outside Parliament’s jurisdiction, which are given exclusively to state legislatures.
It is also clear that there is no entry in respect of agriculture in the State List, which is subject to any entry in the Union or Concurrent List. The states have thus exclusive power to legislate on the agricultural markets, taxing on agricultural income, rights over land and agricultural indebtedness. The corporate farming or contract farming, facilitation of which is substantial aspect of the two Farmer Acts of Union, will result in substantial changes in rights over agricultural land and agricultural indebtedness. Poor farmers will be pushed to debts and run the risk of heavy liabilities imposed under contract farming.
Swaminathan Committee’s recommendations
Though Swaminathan Committee recommended inclusion of ‘agricultural market committees’ subject in Concurrent List, no government initiated any amendment to amend the Constitution for this purpose. The NDA government also made a categorical statement that it has no intention to amend the lists to create authority in favour of Union to make laws relating to agricultural markets.
Hence, neither the Centre nor the Parliament has any power to make legislations like the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, and the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020. The Government also knows it very well and that is why the Statement of Objects &Reasons deliberately omitted the source of power to make such law, which otherwise, it could have proclaimed.
No ground for two Farmer Acts
There is no constitutional ground available for the Centre to make the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 in view of Entry 28 of the State List (markets and fairs), and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 which breaches the subjects in Entries 14, 18, and 46 of the State List, and Entry 7 of the Concurrent List. This is the ground on which the States can challenge the central laws for encroaching upon their sovereign legislative authority, which is essential component of Federal structure.
The NDA cannot say that India, i.e., Bharath is not a federation, though Article 1 says that it is Union of States, because the nine-judge Bench of Supreme Court in S R Bommai case has declared that the ‘federal character’ of India is the basic structure of the Constitution that cannot be tinkered with by the Parliament. Referring to legislative powers of States under Articles 245 to 254, the Supreme Court said: “the State qua the Constitution is federal in structure and independent in its exercise of legislative and executive power”.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, facilitates contract farming. The farmers will be negotiated to enter into contracts with big corporate agencies to produce crops according to the terms agreed upon under which farmers will produce crops as per contracts and specifications for a mutually agreed remuneration with conditions of compensations and damages if farmers failed to yield agreed specific quality. This is state subject, the entry 18 gives power to state to legislate on rights in or over land, land tenures, rents, transfer agricultural land, agricultural loans, etc; entry 30 gives power over agricultural indebtedness); entry 45 on land revenue, land records, etc. and entry 46 to impose taxes on agricultural income.
NDA cannot say India a federation
The NDA cannot say that India, i.e., Bharath is not a federation, though Article 1 says that it is Union of States, because the nine-judge Bench of Supreme Court in S R Bommai case has declared that the ‘federal character’ of India is the basic structure of the Constitution that cannot be tinkered with by the Parliament. Referring to legislative powers of States under Articles 245 to 254, the Supreme Court said: “the State qua the Constitution is federal in structure and independent in its exercise of legislative and executive power”.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, facilitates contract farming. The farmers will be negotiated to enter into contracts with big corporate agencies to produce crops according to the terms agreed upon under which farmers will produce crops as per contracts and specifications for a mutually agreed remuneration with conditions of compensations/damages if farmers fail to yield agreed specifications of quality. This is an exclusive state subject, the entry 18 gives power to state to legislate on rights in or over land, land tenures, rents, transfer agricultural land, agricultural loans, etc; entry 30 gives power over agricultural indebtedness); entry 45 on land revenue, land records, etc. and entry 46 to impose taxes on agricultural income.
Unleashing market power
Centre has withdrawn support of the Government to Farmers and unleashed the market powers over the farmers, 86 percent of whom are small farmers having below 4 acres of land in the name of liberating from the shackles of APMC restrictions. It is time for the states to take up the responsibility of protecting farmers from big sharks in corporate market and save the farmers and food for nation and future. It is the duty of every state government, whether it is BJP ruled or non-BJP rules, to save the farmers and their interests. The farmers are rightly fearing that powerful investors would bind them to unfavourable contracts drafted by big corporate law firms, with liability clauses that would be beyond the understanding of poor farmers in most cases. And that would end up in big litigation in courts of law, which farmers cannot fight while corporates are comfortable with their clout among lawyers and enforcement machinery. The government describes that the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 liberates farmers by giving them the freedom to sell anywhere, but in fact it liberates the corporates from the APMC restrictions on trader’s monopoly and unleash them to purchase from any farmer of any corner. It is beyond anybody’s imagination that an Indian small farmer will take his produce in a bullock cart beyond village or district or state to sell wherever he desires.
