By Kushal Jeena
With the all 32 farmer union backing ongoing peasant agitation scuttling NDA government’s move to manipulate the stir by turning down centre’s offer to form a small group to deal on the issues relating to controversial three farm sector bills that led to a widespread peasant revolt against government’s move to privatize the agriculture sector.
The third round of talks between the representatives of government and farmers hit a road block as both failed to arrive at an amicable meeting point as farmers were reluctant to proceed with talks till the controversial bills are not withdrawn whereas the government was willing to defuse the tension through a small group that farmers refused to accept saying the offer is nothing but a manipulation through back door. However, they assured the government to revert back with their objections.
The current farmer agitation against three controversial bills relating to privatization of India’s vast farm sector has put the ruling National Democratic Alliance government on the dock as it appears groping in dark to find out an amicable solution to defuse the present crisis that has potentially far reaching implications as the country’s economy is mainly agriculture driven.
The movement has successfully painted Modi government as pro-rich and anti-farmer that accounts for deprived sections of the society.
The agitation particularly from the peasants hailing from northern states like Punjab, Haryana, Uttar Pradesh, Madhya Pradesh and Rajasthan is expected to continue for a longer period because the umbrella organization of the peasants of the are reluctant to compromise on any proposal not less than the withdrawal of agriculture bills, which they claim will destroy agriculture sector and create a new rich class.
The widely criticized three agriculture bills that Modi government hastily and undemocratically pushed through during r Monsoon session of Parliament have replaced all state laws relating to agriculture, putting future of poor farmers at stake. The government’s claim that the bills are aimed at ushering much required reforms in the farm sector and are also for the welfare of the farmers falls flat as bills are facing strong opposition from farmers as well as artiyaas who are up in the arm in protest against the bills.
The opposition-ruled state governments are opposing farm bills because they consider them as direct encroachment on the powers and functioning of state as agriculture and markets are state subject under the provisions enshrined in the Constitution of India. They are also being construed as an attempt contrary to the spirit of cooperative federalism. These states contend that the laws would curtail the efficacy of state legislations on matters mentioned under state list.
The centre is duty bound to respect the autonomy of states in a federal structure because the farm bills have a direct impact on state laws and for that reason such an attempt by the centre is being construed as violation of federal structure. On the first bill called the Farmers’ Produce Trade and commerce (Promotion and Facilitation) Bill, 2020, the stake holders have raised three interconnected issues i.e. end of minimum support price, end of existing agriculture price mechanism system and loss of revenue and livelihood. The biggest apprehension of farmers is dismantling of MSP because in such a situation they fear exploitation by big private companies by means of hoarding and other wrong doings.
The BJP led government’s call for one nation; one market has also met with widespread opposition as the farmers unions have replaced it with one nation, one MSP. The purpose of the government to enact such a law is to end the APMC food grain market system and force the farmers to sell their produce to private players at the price of their choice because of non-existence of MSP. In case one crop is failed due to bad monsoon or other natural calamities, the private companies would hoard food grains and sell them at higher prices.
The basis for market intervention by the government for procurement is price intelligence from mandis which initiates government intervention when prices start crashing. The new Bill has resulted in lack of information on market transactions, quantities and prices with the government, in a way facilitating the government to abdicate its responsibility of assuring MSP and PDS.
Furthermore, it is likely that the reforms do not do away with middlemen at all as the same and newer entities will now have the freedom to operate outside the mandis without any regulations. Additionally, giving due regard to the small scale of landholdings of farmers in Punjab and Haryana, it does not seem as if the large private corporations would deal directly with the small and marginal farmers, consequently resulting in the emergence of middlemen and contractors.
Private traders might also insist on purchasing produce immediately after harvest when prices are low. There is also a possibility that corporations will buy food grains from states with surplus grains, like Punjab, at lower prices and sell these at a later time to grain deficient states at higher prices, resulting in market distortion and reduced income for farmers.
Although the Farming Agreement Bill aims at protecting farmers against price exploitation and increasing choice in the sale, it does not take into account that individual farmers, especially small or marginal farmers (who constitute 85% of rural farmers), might not be equipped to negotiate with private corporations to ensure themselves a fair price.
As a consequence of the adoption of contract farming policy, the power balance shifts from the farmer to private companies, and the farmers might end up being the weaker players in the negotiation process. A farmer might be pushed to become a land-owning tenant under the interest of corporate.
Another concern that arises relates to the three-tiered dispute settlement prescribed by the Bill, first, a conciliation board, second, the Sub-divisional Magistrate, and third, the Collector or Additional Collector as the Appellate authority.
Farmer-buyer contracts will effectively be removed from the ambit of civil courts, as well as judicial review, by the creation of bureaucrat led dispute resolution mechanism. The usage of “shall” in the Bill points to the mandatory nature of these provisions. Additionally, the majority of farmers lack the resources required for fighting legal battles against large private corporations.
One of the foremost concerns that have arisen in relation to this Bill is regarding hoarding and black marketing. Since the Bill eases the restrictions imposed on stock limits relating to the prescribed food items, there is increasing fear of hoarding of food items by exporters, processors and traders during harvest season when prices are lower until a later time when prices tend to increase.
Since states would no longer have information and intelligence about the availability of stocks within the state, this could also result in undermining food security, in addition to adversely affecting the interest of both the farmers and consumers.
The Bill has no substantial benefits for either the consumers or the farmers; it legally permits private companies to stock food items without restrictions on the stock limit except in circumstances of war, grave natural calamity, extraordinary price rise etc. The Bill is likely to affect the prices of food commodities resulting in rising in prices, adversely affecting the consumers as well as the subsidies for PDS.
Serious food problems are likely to arise during extraordinary circumstances as the government will not have the requisite information relating to who, where, when and how much stock exists in the state. There will be no machinery to verify the stock limits in the circumstances specified for regulation.
The critical nature of remunerative prices for farmers must be realized and a statutory framework must be developed for guaranteeing the same. The Commission for Agricultural Costs and Prices in its report had highlighted the role of government intervention for ensuring remunerative prices to farmers and suggested to make MSP a legal right. Furthermore, the slow death of the APMC will consequently result in the failure of the eNAM as it is dependent on the physical APMC markets for electronic trade.
Wheat production is likely to fall by 23% by 2050 in the absence of proper intervention. Moreover, environmental concerns arising from agriculture like green house gas emissions, stubble burning and depletion of underground water tables also contribute to climate change and necessitate reforms in agricultural practices.
The basis for evaluating a policy must be its urgency and importance. Removing hunger among farmers, pulling them out of debt traps, ensuring fair remuneration for food produce and maintaining the ecological balance are the most pressing issues at present instead of introducing new plans for attracting new investors. Selling the interest of the farmers to corporate is not likely to make India ‘Atmanirbhar’.
Agrarian distress has been persistent in India due to a number of factors including low productivity, lack of storage and transport facilities, heavy indebtedness and fragmented landholdings. Subjecting the fate of farmers to the vagaries of market forces cannot be the only way to uplift the agriculture sector.
Experience from other nations has revealed that corporatization of agriculture could further instigate the depression of the farmers. Replacement of one flawed model with another flawed model is not the solution.
The agriculture sector requires stability, whereas the new model will only introduce more price volatility by introducing market forces. Even in the existing system, as it will be in the new system, the farmer never gets to decide the price of his farm produce; it is decided by another person for him and is subject to extreme fluctuations. There is an urgent need to address the apprehension of the concerned stakeholders and to reassess of the existing policies.
Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 provides a framework for farmers to engage in contract farming, i.e. farming as per an agreement with the buyer before sowing, under which farmer promises to sell his produce to the buyer at a pre-determined price.
The bill allows private buyers to hoard essential commodities for future sales, which only government-authorized agents could do earlier; and they outline rules for contract farming, where farmers tailor their production to suit a specific buyer’s demand. One of the biggest changes is that farmers will be allowed to sell their produce at a market price directly to private players like agricultural businesses, supermarket chains and online grocers.
Essential Commodities Amendment Bill 2020 makes provisions for the removal of items such as cereals and pulses from the list of essential commodities and attracts foreign direct investment in the sector. Some sections have raised the fear that this will compromise on food security. The bill is aimed at legitimizing what would otherwise be called as hoarding, without the government even having the capability of knowing which stock of which grain exists with whom. Even the place and time of such stock would not be known.
In nutshell, reforms listed in the farm bills will weaken rules around sale, pricing and storage of farm produce – rules that have protected India’s farmers from the free market for decade will no longer be there to protect them and it would eventually destroy India’s vast agriculture sector that has been a back-bone of the country’s economy.
