The BJP Government's real motive behind the New Agriculture Bills 2020

1. The real reason why the BJP Government has brought these bills is to bringing both agricultural products and farmers to the commodities market. These commodity markets are under the purview of Central bodies like SEBI and different Commodities Exchanges.

2. These Commodity exchanges are controlled by the Corporates. The name of the National Commodities exchanges is MCX, NCDEX, NMCE, ACE, and ICEX. There are 18 regional commodity exchanges too. On 12 Dec 2020 BSE launched an e-agriculture commodity spot trading platform. The timing of launching this platform when farmers are fighting for the abolition of these bills suggests that the govt. is in hurry to implement these bills and eager to start trading on this platform. 

3. The actual plan of the Government is to keep the APMCs and MSPs and to introduce commodities trading into APMCs.

4. There will be ticker boards in APMCs connected to real-time exchanges and these ticker boards will reflect spot prices, futures contracts, and MSPs. They will make sure that the MSP price should be lower than the spot price and futures contracts so that farmers will sell their crops on spot price or future contracts whichever is higher than MSPs. 

5. APMCs generate revenues for the state govt and this revenue keeps APMC operational and helps in developing infrastructure. When farmers will sell their crops on spot price and futures contracts then MSPs will disappear as Government has already relieved the private players from paying taxes as specified in new agriculture bills 2020.

6. So, MSPs will be gone and all the control of the commodities market, buying, and selling of crops will directly go in hands of the Central Government, as the State Governments have no jurisdiction over commodities markets.

7. Point No. 16 of The Farmer Produce Trade and Commerce (Promotion and Facilitation) Bill 2020 states that: Nothing contained in this act, shall apply to stock exchanges and clearing corporations recognized under Securities contract regulation act, 1956 and transition made thereunder. 

Drawbacks of Spot markets and Future markets:

• These markets are more prone to fraudulent activities. For example, Jignesh Shah did a 5600 crore commodities market scam in 2013.
• There is a possibility of future trading leading to a rise in spot prices and inflation.
• There is a possibility of future trading leading in driving up spot market volatility;
• There is a possibility of future trading not necessarily to be in a transparent or costless manner.
• In presence of any future bad news in the market, the speculators tend to hoard the concerned commodities and hence artificially drive up the prices. As a result of these speculative activities of major market players, the volatility of the underlying spot market for those commodities also increases sharply. 
• The trading opportunities are generally monopolized by large traders/farmers and give a little space for others to take part in the commodity market.

In a nutshell, it would harm marginal farmers and the Government must abolish these bills at the earliest. There is not even enough infrastructure to bring farmers into this type of market. The government should not abolish MSP and APMCs and exposing farmers to such free markets will expose farmers to market risks from which he is free because of APMCs and MSPs.