Home Governance Will Farm Bills Prove Advantageous To Farmers?

Will Farm Bills Prove Advantageous To Farmers?

Will Farm Bills Prove Advantageous To Farmers?

On September 25, farmers’ organisations across the country gave a call for a bandh to oppose the three bills passed by Parliament. These bills, namely the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 (FPTC), the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 (FAPAFS), and the Essential Commodities (Amendment) Bill, 2020 were passed between protests by the Opposition parties, without argumentation in Parliament. Even the government’s league, such as the Shiromani Akali Dal, have brought up consternation, conferring their voice to the farmers’ requirements.

Will Farm Bills Prove Advantageous To Farmers?
Will Farm Bills Prove Advantageous To Farmers?

Will Farm Bills Prove Advantageous To Farmers?

Estimated as historic reforms, the government assures freedom to the farmers from the “villainous and exploitative” Agricultural Produce Marketing Committee (APMC) mandis and from the middlemen who impose commission from trade in these mandis. Most farmers would acknowledge that the functioning of the mandis is incompetant, non-transparent, politicised and frequently administered by cartels. The effort to reform the functioning of the mandis is not new and has been in operation since last two decades, starting from 2001 when the expert committee on agricultural marketing tendered its report.

Since then, three different model APMC acts have been presented by preceding governments (in 2003, 2007, and 2013) and in 2017 by the present government, none of which led to the kind of opposition in form of protest that have been observed from the last two weeks.

Will Farm Bills Prove Advantageous To Farmers?
Will Farm Bills Prove Advantageous To Farmers?

Will Farm Bills Prove Advantageous To Farmers?

Rather than embracing the freedom from mandis, this time farmers are on the streets protesting for reinstating the supremacy of the mandis in agricultural trade fundamentally as APMC mandis are an significant part of the agricultural trading ecosystem. While they may have a confrontational attitude to the functioning and administration of mandis, they also inhibit a symbiotic relationship with the middlemen and the mandis expanding beyond matters of transaction in agricultural produce. The middlemen are a root of information, inputs, and sometimes credit without collateral.

Will Farm Bills Prove Advantageous To Farmers?

The exasperation against the bills is not just about reinstating the supremacy of the APMC mandis but also over the manner in which the bills were plunged upon the farming community. Not only the farmers’ organisations, but even state governments and allies have not been discussed. Secondly, all the previous efforts of reforming agricultural marketing taking into consideration the constitutional separation of powers. While the Centre set forth the model acts, these were executed by state governments. And most of these recommendations were literally acted upon by state governments with waves of reforms in the functioning of the APMC in most states.

Out of 36 states and union territories, 18 states have already sanctioned reforms permitting for instituting of private market yards/private markets, 19 states have executed reforms permitting for quick purchase of agricultural produce from agriculturists by processor/bulk buyer/bulk retailer/exporter, 20 states have executed contract farming acts. Kerala and Bihar do not have APMC mandis and Tamil Nadu has a distinct system. Most states have absolved imposing taxes and fees on sale of fruits and vegetables. Most of these reforms were executed by the state governments and rules were formulated with farmers embracing these reforms, even though the reforms were recommended by the Centre.

Will Farm Bills Prove Advantageous To Farmers?

On the other hand, the present reforms entirely bypass the state governments and moderate their potential to monitor agricultural markets even though it is a state subject. Further, unlike previous reforms where the focus was on reinforcing the functioning of APMC mandis while granting for greater private market access and participation, the present FTPC bill bypasses the APMC altogether, generating a different structure of trading. In any case, mandi trade accounts for less than one-fourth of the total agricultural trade with the rest accounted for by private markets/traders. The lack of ordinance and exclusion from mandi fees generates a dual market structure which is not only insignificant but will also stimulate unregulated trade malignant to the initial purpose of advancing market access to farmers for better price discovery and assured prices.

Most farmers comprehended that the FTPC Bill is not about achieving the assurance of freedom to farmers but freedom to private capital to purchase agricultural produce at cheaper prices and without any directive or supervision by the government. Farmers also perceived that this will finally lead to shifting of trade from regulated APMC mandis to private markets without any assurance to investment in infrastructure and directives from government. With unfair and distinguished terms of engagement, the dwindling and withdrawal of the APMC is only a matter of time.

Will Farm Bills Prove Advantageous To Farmers?

The protest to sustain the APMC even when its shortcomings is also a fight to conclude an assurance from the government on sustaining state succor the agricultural sector. With government investment in agriculture diminishing in actual terms and escalating input costs and reducing subsidy, farmers fear the withering away of the last remaining instrument of state reinforced in the form of the Minimum Support Price (MSP) regime. While MSP based procurement did not advantage the most of farmers and only a few states bestowed the procurement operations of the Food Corporation of India (FCI), it did work as a lifeline for the farmers in those states. It was essential only in two crops, wheat and paddy, among more than 1,000 crops grown, but it did anticipate the promise that the state was obliging to step in when necessary. It also bestowed revenue to the agricultural marketing boards which was relatively used in upgrading infrastructure in the mandis.

These fears are magnified by the contract farming bill and amendments in the essential commodities act. Apart from the fact that the provisions of these bills are highly skewed in favour of private capital, with no limits on stockholding and restrictions of government interventions, there is certain recourse to any independent grievance redressal mechanism.

Will Farm Bills Prove Advantageous To Farmers?

Will Farm Bills Prove Advantageous To Farmers?

What has also exaparted the farmers is the deep divide between the bragging of the government and its actions on the ground. Even while executing these reforms and assuring greater freedom to farmers, the government has moved quickly to ban the export of onions and diminished, increased and again decreased import duty on masur in a matter of three months. Agricultural terms of trade have moved against agriculture with increasing input prices and decreasing farm gate prices.

The last three years have seen a fall down in prices of major agricultural products. At a time of prevalent demand deflation and the economic slowdown, promising the farmers a bumper escalated in agricultural prices through a free market is as good as the promise of “achhe din” by the party that came to power in 2014.

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