MSP Bill Kya Hai|msp bill 2020

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Prime Minister Narendra Modi on Monday asserted that farm Bills 2020 will empower the farmers to freely trade their produce anywhere. He also claimed that these Bills are not against the agriculture mandis. Also Read – Sonia Gandhi Returns From US With Son Rahul Post Health Check-up Amid Ongoing Monsoon SessionYesterday, two farm bills were passed in the Parliament.

I congratulate my farmers. This change in the farming sector is the need of the present hour and our government has brought this reform for the farmers”, said the Prime Minister after laying the foundation stone of nine highway projects in Bihar, through video conferenceRajya Sabha on Sunday passed the Farmers’ Produce Trade and Commerce Bill 2020 and Farmers Agreement of Price Assurance and Farm Services Bill 2020.

The Bills were passed through voice vote in the Rajya Sabha despite constant protests in the well of the House.The Bills were introduced in Lok Sabha on 14th September 2020 by Union Minister of Agriculture & Farmers’ Welfare, Narendra Singh Tomar, to replace ordinances promulgated on 5th June 2020.

MSP Bill 2020


  • The new legislation will create an ecosystem where the farmers and traders will enjoy freedom of choice of sale and purchase of ari-produce.
  • It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations.
  • The farmers will not be charged any cess or levy for sale of theirproduce and will not have to bear transport costs.
  • The Bill also proposes an electronic trading in transaction platform for ensuring a seamless trade electronically.
  • In addition to mandis, freedom to do trading at farmgate, cold storage, warehouse, processing units etc.
  • Farmers will be able to engage in direct marketing thereby eliminating intermediaries resulting in full realization of price.


  • Procurement at Minimum Support Price will continue, farmers can sell their produce at MSP rates, the MSP for Rabi season will be announced next week
  • Mandis will not stop functioning, trading will continue here as before. Under the new system, farmers will have the option to sell their produce at other places in addition to the mandis
  • The e-NAM trading system will also continue in the mandis
  • Trading in farm produce will increase on electronic platforms. It will result in greater transparency and time saving

Main provisions

  • The new legislation will empower farmers for engaging with processors, wholesalers, aggregators, wholesalers, large retailers, exporters etc., on a level playing field. Price assurance to farmers even before sowing of crops. In case of higher market price, farmers will be entitled to this price over and above the minimum price.
  • It will transfer the risk of market unpredictability from the farmer to the sponsor. Due to prior price determination, farmers will be shielded from the rise and fall of market prices.
  • It will also enable the farmer to access modern technology, better seed and other inputs.
  • It will reduce cost of marketing and improve income of farmers.
  • Effective dispute resolution mechanism has been provided for with clear time lines for redressal.
  • Impetus to research and new technology in agriculture sector.


  • The farmer will have full power in the contract to fix a sale price of his choice for the produce. They will receive payment within maximum 3 days.
  • 10,000 farmer producer organizations are being formed throughout the country. These FPOs will bring together small farmers and work to ensure remunerative pricing for farm produce
  • After signing contract, farmer will not have seek out traders. The purchasing consumer will pick up the produce directly from the farm
  • In case of dispute, there will be no need to go to court repeatedly. There will be local dispute redressal mechanism.


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