Centre's Agricultural Marketing Reforms Are an Assault on Federalism

‘One India, One Agriculture Market’ slogan is an open declaration of the centralising objective of these reforms.

The central government recently introduced major agricultural market reforms through three ordinances: The Essential Commodities (Amendment) Ordinance 2020, The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020.

Since the inauguration of the Indian constitution on January 26, 1950, these three inter-linked ordinances constitute the most concerted entry of the Centre into the sphere of agriculture, which was designated a state subject in the constitution.

The various constitutional amendments made after 1950 contributed to a continuing process of invasion by the Centre but the Essential Commodities (Amendment) Ordinance 2020 takes this process to a higher scale and is certainly the most devastating attack so far on the federal rights of states in agriculture. ‘One India, One Agriculture Market’ slogan is an open declaration of the centralising objective of these reforms.

The seventh schedule of the Indian constitution has three lists. List I refers to the subjects under the Centre or the Union, List II refers to the state list and List III refers to the concurrent list where the states and the Centre are co-sharers of power and responsibility.

Entry 14 of the state list mentions the item relating to agriculture: “Agriculture, including agricultural education and research, protection against pests and prevention of plant disease”. If we were to deduce from this that agriculture is a state subject under the constitution, that would be formally correct. However, some other provisions of the constitution in the Union list and in the concurrent list have provided legal justifications for central interventions in the sphere of agriculture.

In general, national goals and imperatives are invoked to use these Union and concurrent list provisions. In some cases, the Centre’s intrusions into agriculture have been made even without any constitutional sanction. The states can be constitutionally deprived of all powers, including in the sphere of agriculture, under some provisions mentioned in Part XI of the constitution, dealing with “Relations between the Union and the States”.

Also read: Centre Opts for Long-Term Agricultural Reforms, Leaving Farmers ‘Atmanirbhar’ in Crisis

Under Article 248 in Part XI, the Centre has the residuary powers of legislation relating to any item which is not mentioned in any of the three lists. Under Article 249, the central parliament has the power of legislation regarding any subject, even in the state list, if the Centre considers this to be necessary “in the national interest”.

There is no similar provision in the constitution of any other country which has a federal structure. Even the 1935 Act during the British Rule in India whose format was made the basis for drafting independent India’s constitution did not have a clause giving such overriding powers to the Centre.

Entry 33 in the concurrent list limits the power of states in agriculture and empowers the Centre by stating that both the state and the Union government can legislate regarding production, trade, supply and distribution of a range of foodstuffs and agricultural raw materials.

The Sarkaria Commission on Centre-state Relations pointed out that the Centre had used Entry 33 in the concurrent list to enact the Essential Commodities Act 1955. This Act had disproportionately empowered the Centre in the management of agriculture, and it is the 2020 amendment of this Act which has been brought in to further increase the powers of the Centre in the agriculture sector.

Entry 34 in the concurrent list mentions ‘Price Control’ again giving scope for the Centre’s entry into agriculture and invasion into the powers of the states. The government of Tamil Nadu had recognised that Entry 33 and 34 in the concurrent list had a damaging impact on state autonomy in the sphere of agriculture and in its memorandum to the Sarkaria commission had demanded that Entry 33 and 34 be transferred from the concurrent list to the state list.

West Bengal’s Left Front government led by Jyoti Basu had gone even further in demanding in its memorandum that not only the existing entries in the concurrent list but also those in the Union list that constrict the states’ jurisdiction in agriculture should be deleted, and that “Agriculture, including animal husbandry, forestry and fisheries, should be exclusively a States subject…The recent trend, with the Centre progressively encroaching in the sphere of agriculture, must be reversed”.

Also read: The Seventh Schedule and Why a Constitutional Commitment to Federalism is Important

What is happening now through the 2020 amendment of the Essential Commodities Act 1955 is not only opposite to what Tamil Nadu and West Bengal had rightfully demanded but, in fact, further increasing the power of the Centre than what existed before this Amendment.

The way the Amendment is being pushed forward through ordinances is also extraordinary. Indira Gandhi had used the Emergency (1975-1977) to make some harmful amendments that curtailed the power of the states in education and forestry. This government is using the health emergency caused by COVID-19 to push this amendment through ordinances to cause devastating damage to the powers of the states in agriculture.

The most brazen form of the scale of attack the Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 entails on the already limited autonomy the states currently have can be assessed from these words:

“The Central Government may, for carrying out the provisions of this Ordinance, give such instructions, directions, orders or issue guidelines as it may deem necessary to any authority or officer subordinate to the Central Government, any State Government or any authority or officer subordinate to a State Government”.

This is one of the direst warnings about emasculating the federal powers of the states.

This ordinance’s attack on the limited revenue resources of the states is also clear in the provision that ‘no market fee, cess or levy’ can be levied by a State APMC (agricultural produce market committee) Act or any other state law. After depriving the states of the revenue, they earlier earned through sales tax by replacing it by centrally controlled GST, this is another attack on financially weakening the states and making them more dependent on the Centre.

The undermining of the state autonomy cannot be starker than what is stated in the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020:

“The Central Government may, from time to time, give such instructions, as it may consider necessary, to the State Governments for effective implementation of the provisions of this Act and the State Governments shall comply with such instructions.”

Also read: A Manifesto for Reclaiming the Spirit of Federalism

Protecting agriculture as a state subject in Indian federalism would be a key economic, political, social and cultural battle in the coming years.

Pritam Singh is a visiting scholar at Wolfson College, University of Oxford, and the author of Federalism, Nationalism and Development.