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The Farmers Produce Trade and Commerce (Promotion and Facilities) Ordinance 2020

Amid the anomalous COVID 19 crises, the Government of India gave a landmark judgment decision under Aatmanirbhar Baharat Abyhian in the agricultural sector. The decision taken is to make essential reforms in the agricultural sector and rising the income generation of the farmers.

In respect of the above decision president of India on June 5, 2020, promulgated “The Farmers Produce Trade and Commerce ( Promotion and Facilities) Ordinance 2020”  which aims at boosting the framers and traders engaged in agricultural another activities in rural areas.

Farmers Produce Trade and Commerce (Promotion and Facilities) Ordinance 2020

From long back the Government of India has been trying to make comprehensive development for the efficient and effective working of the agricultural sector and increasing farmers earning. The planning for this has been going on for a long time ago. To initiate this government circulated the Model Agricultural Produce and Livestock marketing act 2017 and the model agricultural produce and livestock contract farming act of 2018. But they were not so successful and now seeing the current scenario of COVID19 the government decided to speed up their reform plan.

The government realized the need of the farmers to increase prospective buyers beyond the allowed limit and framing of contractual agreements. Thus, THE FARMERS PRODUCE TRADE and COMMERCE (PROMOTION AND FACILITIES) ORDINANCE 2020 was promulgated.

Aim and Objective of Farmers Produce Trade and Commerce (Promotion and Facilities) Ordinance

The ordinance aims at creating additional trading opportunities for both farmers and traders beyond their current scope to help them to get the justified and genuine prices for their agricultural produce in transparent and fair competition in the open market. It will certainly pave the way for creating One India, One Agricultural Market, and will lay the foundation for ensuring golden harvests for our hard-working farmers.


From all the ordinances The Farmers Produce Trade and Commerce (Promotion and Facilities) Ordinance 2020 has the most far-reaching implication. The ordinance will provide the creation of an ecosystem or a different environment that will seek to provide barriers free trade which means the freedom to choose the sale and purchase of the agricultural produce. It will give transparent competition to the farmers, which will help to promote inter- Intrastate trade and commerce of agricultural produce. The ordinance has also introduced electronic trading to facilitate the farmers in receiving and paying payments and incomes and also under this act no tax or levy for the sale of their products will be charged.

Landmark Decisions

  • Free Trade

This ordinance has bypassed the agricultural produce market committee by providing the farmers and trader’s freedom of trade outside and APMC designed market yard. By demolishing the old agricultural laws the farmers can now sell their products inside or outside the state or in any market which they find attractive. This will help the farmers to get better prices for their produce in the open market. The only requirement for the business in the trade area is that the farmers should have valid and permanent account numbers.

  • Electronic Trading

The next important decision was to permit the farmers for electronic trading in specific trade areas. This type of trading system acts as an online platform to facilitate online buying and selling of farmers produce with mobile phone and internet connection.

  • No Fees to Be Levied by State

The ordinance strictly restricts or ban the state government to charge any market fee or tax on the farmers, traders, and the online portals used by them for trading purpose. Generally, this tax rate varies from state to state starting from 1% to 8.5% in Punjab but this ordinance has made all the trade movements tax free which has benefited the farmers. Due to this, there is a feeling in APMCs that in due course, the entire APMC ecosystem may itself wither away.

  • Dispute Resolution Mechanism

Now seeing the current situation the government has given much freedom in the trade activities to the farmers and traders so it is obvious that much freedom will lead to several disputes. So in this ordinance, the government has also set a Dispute Resolution mechanism. The parties in the trade agreement can take their dispute to the sub-divisional magistrate for settlement and justifiable relief. Then the magistrate appoints board and hands over the case to the board for settlement but in case the dispute remains after 30 days then the case automatically goes to the magistrate. And if the parties find the decision biased they have the right to approach the higher authority.

Why It is Considered to Be – the Need of an Hour?

Farmers in India suffer much discrimination due to lack of knowledge and awareness, various trade restrictions in the marketing of their produce, supplying the goods, etc. there are restrictions to the farmers in selling exporting their produce to different states for selling it outside the notified AMPC market yard. The farmers are forced to sell their produce to some corrupted government officers at a low price that incurs them huge losses; also they are sometimes not even allowed to sell their products beyond the registered licensing of the state government.

All these incidents lead to the restricted scope of expansion of the trading activities of the farmers and low-income generation. Therefore, due to all these reasons and considering the need of the hour and protect the farmers and traders from further exploitation in these crises of COVID 19 the ordinance was passed by the president to save the innocent people.


It is not easy to make laws, acts, and regulations for a huge country like India but more difficult is to make the citizens lawfully follow the ordinance, act, rule, principle that has been made by the government. Due to the carelessness and lack of awareness of people, they are not aware of the rights and benefits they have and are always at loss. Moreover, the ones who are aware of these rights use them to fulfill their self motive without caring about other people, and from here the corruption starts. Considering the need of the era now is the time to make the unaware people aware about their rights and benefits they have and to the extent, they can use them to fulfill their interest in good faith, then only passing the ordinance or acts will be successful


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