farm loans

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act 2020 and the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act 2020 (FPTC Act) both contain a unique dispute resolution mechanism where which any disputes under the Acts are to be settled by conciliation boards. The opposition to this provision is premised on the fear that without recourse to civil courts, farmers are likely to be exploited in the process. In an attempt to appease the farm laws’ protestors, the government has offered to roll back this provision, and bring disputes under the jurisdiction of civil courts. However, instead of rescinding the provision under pressure, the government should prioritize fostering legitimacy in the Alternative Dispute Resolution (ADR) process and getting the farmers’ buy in.

Alternative Dispute Resolution refers to a set of techniques or approaches that provide an alternative to the formal legal path to justice through conciliation, arbitration, mediation etc. These approaches are aimed towards more efficient, less costly, and more satisfying resolution of conflicts. Most rely on a neutral third-party to hear arguments from both sides and make decisions.

Government’s willingness to rollback the conciliation provisions is not surprising because in the Indian context, ADR as a conflict-resolution mechanism might have received legal recognition but it is yet to be widely practised. With around 38.87 million cases currently pending before the District Courts according to the e-Courts website, the formal legal system is currently ill equipped. The pandemic and the resulting lockdown have further burdened judicial modes of dispute resolution, thereby exacerbating the existing problem of pendency of cases. The Chief Justice of India has emphasised on mediation, both pre and post litigation, as an effective tool to address the backlog of cases pending before the courts during the pandemic. 

In the past, the Supreme Court has been a flagbearer of ADR. In Afcons Infrastructure v. Cherian Varkey Construction, it emphasised the importance of ADR in commercial and consumer disputes, matrimonial disputes and matters of tortuous liability. Section 89 of the Code of Civil Procedure, 1908 and the Arbitration and Conciliation Act, 1996 provide statutory reference to ADR. Additionally, Section 20(1) of the Legal Services Authorities Act 1987, provides for reference to Lok Adalats. A study analysing the efficacy of ADR in Delhi, Mumbai and Bangalore concluded that while ad hoc arbitration has not been a success, other methods such as mediation, conciliation and Lok Adalats are developing on the right track. 

In an attempt to bring an ADR approach to dispute resolution in the interest of speedy justice, both the farm laws provide for an executive driven conciliation mechanism. Under the FPTC Act, disputes between farmers and traders are to be referred to a conciliation board appointed by the Sub-Divisional Magistrate (SDM). The SDM has to ensure that both parties are equally represented on the conciliation board. If the Board is unable to arrive at a settlement within 30 days, the SDM is authorized to decide the case. Appellate authority lies with the Collector, but not with civil courts, hence circumventing the judicial process.  

The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Rules 2020, released in October 2020, requires every farming agreement to provide for a conciliation process and conciliation board, in the absence of which the SDM is authorised to appoint the board. Similar to the FPTC Act, the SDM has authority to pass a settlement order if the conciliation board fails to do so within 30 days and the appellate authority lies with the Collector. The Price Assurance Act also provides safeguards for farmers by creating payment obligations on traders, protecting rights of  sharecroppers, and disallowing the traders from taking ownership of or permanently modifying the farmer’s land.

Critics of this dispute settlement process believe that overreliance on the executive by circumventing the jurisdiction of civil courts dilutes the authority of the judiciary. This argument is often used to discredit ADR as an alternative approach to justice, with some scholars going as far as claiming that the popularity of ADR causes a rule of law issue. Overriding the jurisdiction of civil courts is not unique to these two laws, with statutes like the Income Tax Act, Rent Control Laws, Companies Act etc. containing similar provisions. However, neither of the farm laws precludes the parties from challenging the decision of the SDM before the High Courts and the Supreme Court

It is important to acknowledge that the judiciary alone can not deal with all the cases that are currently pending in our country. Consequently, cases filed usually take years to be brought before the district courts, by which time the litigant has already suffered a great deal of financial loss and mental anguish. The judicial process is dragged on for years, with hearing dates postponed for nefarious reasons. While those with means can use bribes to speed up the process and get favorable decisions, the system has now developed in a way that predisposes poor and vulnerable people to being denied speedy and effective justice. 

Conciliation, as envisaged under the farm laws, has the potential to be a more participatory mechanism offering a level playing field to both farmers and traders alike. It would encourage a just result, where the control of the result is in the hands of the parties and not the lawyers or the judges. This could finally give small farmers a chance to reach a solution that is beneficial and agreeable to them. Since the conciliation board will be set up for the sole purpose of resolving the dispute, it will be in the interest of all parties involved to reach a conclusion as quickly and effectively as possible. This expediency will be highly beneficial for small and midsize farmers who rely on farming for livelihood.  

Another seemingly valid concern is that bureaucratic interference in justice delivery will make the process more susceptible to rent seeking. This claim loses credibility owing to the rampant corruption within the judiciary at district level. Seeking justice through courts is more expensive for farmers if bribes to the court staff, extra `fees’ to the legal aid lawyer, bribes to the policemen for obtaining documents or to court officials for small favours are taken into consideration. 

One incentive for farmers to forgo the legal system and engage in conciliation is the opportunity to recover costs they incurred during the process. Apart from court fees, cost of legal representation, cost of obtaining certified copies etc., the legal system fails to acknowledge, and therefore compensate litigants for any other costs incurred. During the conciliation process, the farmers can negotiate for some of these compensations.  

There is a dire need to develop the ADR ecosystem in India and foster legitimacy in the approach. People’s scepticism towards ADR arises from lack of awareness of the various alternative legal remedies and their benefits. Court congestion and delays often deter farmers from approaching the public justice system, yet they are wary of ADR. By bringing more awareness among the farming community along with capacity building of mediation and conciliation professionals, digitizing the process and developing a watertight enforceability mechanism, the government can get the farmers’ buy in. 

A transparent and accountable ADR ecosystem is imperative to compensate for the lackings of our formal legal system. The conciliation mechanism under the farm laws aims to provide farmers an alternative to the lengthy and often troublesome judicial process. Instead of repealing the provisions to appease the vocal protestors, the government should consider implementing an opt-in approach to ADR under the farm laws where farmers will have judicial recourse to civil courts if the conciliation process fails. Evidence from several countries indicates that ADR is most effective when both parties make that choice, not when they are forced to opt for it in the absence of other options. 

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The opinions expressed in this essay are those of the authors. They do not purport to reflect the opinions or views of CCS.