LIVESTOCK PRODUCT
1. Context
The Supreme Court this week confirmed that ghee (clarified butter) is indeed a “product of livestock”, rejecting an argument by producers of livestock in Andhra Pradesh that it was not.
The SC upheld an order of the Andhra Pradesh High Court, which had said that ghee is “a product of a product of livestock”, and it would therefore be “illogical or irrational” to say that it isn’t produced by livestock
2. Livestock and Ghee
- On July 15, 1994, the government of (undivided) Andhra Pradesh released an official statement designating ghee as a livestock product, with the intent of regulating its purchase and sale within specified market areas.
- This regulation was to be implemented following the prescribed procedures outlined in The Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966.
- A consortium of livestock producers contested the notification on two grounds: (i) asserting that ghee does not qualify as a "product of livestock" and, therefore, should not be subject to regulation as notified, and (ii) contending that the government had not adhered to the notification process outlined in Section 3 of the 1966 Act, which mandates the publication of a draft notification, solicitation of objections, and subsequent issuance of the notification only after addressing these objections.
- Section 3 specifies a procedure involving the publication of a draft notification, the solicitation of objections, and the issuance of the notification only after the careful consideration of these objections. In contrast, Section 4 outlines the establishment of a market committee and the declaration of a designated market area. ("Sangam Milk Producer Company Limited vs. the Agricultural Market Committee & Others")
3.How does the 1966 Andhra Pradesh Act define “livestock”?
- The Act, in Section 2(v), defines "livestock" to encompass "cows, buffaloes, bullocks, bulls, goats, and sheep," and additionally includes "poultry, fish, and any other animals declared by the Government through notification as livestock for the purposes of this Act." Section 2(xv) of the Act specifies that products derived from livestock may be designated as "products of livestock for the purposes of this Act" through a government notification.
- The legislative objective of the Act was to consolidate and amend laws governing the trade of agricultural produce, livestock, and products of livestock.
- It aimed to establish interconnected markets, fostering a farmer-friendly environment with the goal of ensuring fair prices for commodities. The Act envisioned bringing producers and traders into direct interaction, with the intent of eliminating intermediaries in the process
4.High Court Ruling
- In 2009, a three-judge panel of the Andhra Pradesh High Court concluded that although ghee is not directly derived from milk (a definite product of cows/buffaloes), it is unquestionably a product resulting from livestock, specifically cows or buffaloes.
- The court emphasized the illogicality or irrationality of asserting that ghee is neither a milk/dairy product nor a product of livestock.
- According to the court, Section 2 of the Act had a "very clear" legislative intent, stating that livestock products encompass not only those officially notified by the government, such as butter and milk, but also "derivative items" like ghee.
- The court asserted its conviction that interpreting the term 'ghee' should be based on the definition of 'products of livestock' as outlined in Section 2(xv) of the Act.
- Furthermore, the court dismissed the petitioner's procedural argument, maintaining that the 1994 notification had been issued not under Section 3 but under Section 4 of the Act
5. Supreme Court Ruling
- When the decision of the Andhra Pradesh High Court (AP HC) faced a challenge, the Supreme Court was tasked with determining two key issues: (i) whether ghee qualified as a "product of livestock" according to the provisions of the 1966 Act, and (ii) whether the 1994 notification adhered to the prescribed legal procedure.
- On Tuesday (March 5), Justices Sudhanshu Dhulia and SVN Bhatti, comprising a bench, affirmed the validity of the 1994 notification, granting market committees the authority to impose fees on the sale and purchase of ghee.
- The court dismissed the argument asserting that 'ghee' is not a livestock product, deeming it unfounded and lacking in logic. Conversely, it endorsed the view that 'ghee' is indeed a product of livestock, stating the logical soundness of this perspective.
- Citing Section 2(v) of the Act, which defines livestock to include cows and buffaloes, the court underscored that 'ghee' is unquestionably a product of milk, itself being a product of livestock. Drawing on its 2001 decision in 'Park Leather Industry Ltd. v. State of UP,' the court emphasized that all animal husbandry products fall within the definition of 'products of livestock' as outlined in Section 2(xv) of the Act.
- In the 2001 case, the Supreme Court had dealt with the UP Krishi Utpadan Mandi Adhiniyam, 1964, where "agricultural produce" encompassed "animal husbandry products," including "hides and skins." The court had to determine whether tanned leather fell under "hides and skins."
- The court affirmed that regardless of appearance, tanned leather remains a type of leather and falls under the definition of "hides and skins." The Supreme Court applied a similar rationale, as adopted by the Full Bench of the Andhra Pradesh High Court, asserting that 'ghee,' derived from 'milk' through a process, remains a product of livestock for the purposes of the Act and the payment of market fees
6. Way Forward
With appeals dismissed, the Court rescinded earlier interim orders, allowing market committees to collect fees from appellants in compliance with the High Court's decision. Recognizing the prolonged delay in fee payments, the Court granted appellants a two-year period to settle the dues in four equal installments
Source: Indianexpress
