Review Article Open Access

The "Principal-Agent" Problem in Indian Agricultural ACT, 2020

Abstract

The farmer's produce trade and commerce (promotion and facilitation) bill, 2020, and the farmers (empowerment and protection) price assurance and farm services bill, 2020, were approved and notified as legislation at the end of September 2020. The proposed legislation's primary provisions were aimed to aid small scale farmers who have no way of negotiating a better deal. The agriculture bill aimed to allow farmers to sell their produce to anyone they want outside of ‘mandis.' Everyone was welcome to buy their produce even at their farm gates. Despite the fact that ‘mandi commission agents' and states may lose ‘commissions' and ‘mandi fees,' respectively. This remained the main reasons for the protests along with the neglect of MSP and the loss of commission agents' jobs. This paper attempts to study the problems in bill in light of Principal agent theory and suggests a way forwards for the farmers and government to come to a common ground.

Twinkal Dogra*

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