The country is deeply polarized and so every issue is viewed from the prism of the political dispensation of the person attempting to understand the issue. There is a need to take a dispassionate account of the issue from all sides and deeply analyze the farmer’s issue. According to Mr. Vadde Shobhanadreeswara Rao, a farmer leader,former Minister of Agriculture in AP &, Member of Parliament, “the average income of the farmer in India is Rs.8,000/- per month while the lowest paid Government employee salary is around Rs.21,000/- per month”. This should be a matter of shame for the nation especially because they constitute over 70% of the population of the country.
Farming in India has been in private hands since Independence. There have been no restrictions on selling outside the Mandis to anyone. 2% levy to facilitate expenses to provide farmers services and maintain the Mandis. 7200 Regulated APMC Mandis and hundreds of private yards have been operational for yearswith a market levy of 2% market cess and 2% user charge for Commission agents non-perishable products. Contract farming has been going on for a long time with Sugar, tobacco industry and others directly buying from farmers. ITC, Nestle, Pepsi and other large organizations have been giving contracts to farmers especially in Punjab and Haryana. However, farmers have been always facing the problems of indebtedness, lack of access to capital, lack of adequate agricultural infrastructure like silos, deep freezers etc. and left to the vagaries of nature. Due to farming not being lucrative, there has been an exodus in the next generation. Sharing the land with other family members has further truncated the land ownership.
To incentivize farmers for Green revolution and to cater to the Food distribution thru ration shops for the large majority of poor, the Government opted to purchase some of the agricultural products at Minimum Support Prices. However, in practice, the government has mainly procured only paddy at MSP for distribution to the poor. Barely 23 or 26 crops or 5-7% of the produce is covered by MSP so far. Govt. also facilitated APMC Mandis for the farmers to sell their produce at the auction. As it happens, poor implementation, vested controls of the Mandis resulted in a demand for reforms for better pricing and accessibility. The best and most widely accepted recommendations were that of Mr. M S Swaminathan.Report demanded a Minimum Support Price of C2 plus 50% for the farmer and a whole host of other reforms to be taken holistically. All parties have concurred with the report and have been discussing reforms. The main demand of all farmers has been to make MSP applicable to all agricultural produce. This is the challenge, given its huge financial implications.
In 2017-2018, the BJP Govt consulted a few state governments and finalized a MODEL APMC Act 2017, which outlined private yards and linking of market yards with eNAM. In 2018, a model contract Act was also brought forward. At the behest of the 15th Finance Commission, in the Feb 2020 budget, States was encouraged to adopt the Model APMC laws and the finance minister assured financial support for the same. However, by Sept/October, 2020, all this was brushed aside and the three farm laws were steamrolled, without consultation with anyone, thru the parliament and made into a law. Section 2m(i)(ii) and Section 6 of Farmers Produce Trade and Commerce ACT are in absolute contradiction to Sections 3,4,7(1)(2), 8(1),9,10,11,12,12(2),(5),66(1),67(2)(3) and 79 of the Model Act that was recommended by the Modi Government itself.In the process, the government violated the basic democratic norms. The Rajya Sabha speaker deliberately ignored the rules and passed the bill without putting it to division, as the government did not have the majority. The fact that such an important law was passed in such a short time without adequate discussions and referring it to Select Committee, sets, at the very least, a wrong precedence in democratic functioning.
Farmers are agitating for not being consulted. Some Farmer’s unions claim that their repeated submissions to the Govt were ignored and not acknowledged. Farmers decided to protest and gave a one or two months notice to the government about their plans to block the roads to Delhi if they were not given a hearing. With no response from the government, Punjab, Haryana,UP and Rajasthan farmer’s mobilized their members to march to the capital with a demand to repeal the laws. The Government ‘s handling the situation, now rebuked by the Supreme Court, resulted in the farmers and Government taking firm inflexible stands. Nine meetings with the government resulted in stalemate. While the agitating farmers in Delhi held the firm view that the issue was between them and the government, some farmers and political parties approached the Supreme Court challenging the constitutional validity of the three laws. Supreme Court attempted to seek way of breaking the impasse and resolving a potentially explosive situation by stepping outside their traditional charters. They were attempting to, with the best intentions, seek an amicable solution rather than arbitrate on the constitutional validity of government farm laws, making of which falls under the parliamentary turf. However, by being in a hurry to name a committee of people who had clearly identified with the government position it appears to have violated principles of “Conflict of Interest” giving rise to suspicion of bias and an attempt to scuttle the legitimate points raised by the farmers.
What Is The Key Issue?
Farmers rightly demand that they must be compensated for all the input costs, labour and other reasonable items based on the Swaminathan Commission. They believe due to their vulnerabilities, they barely get reimbursed for their costs. They want a MSP and minimum procurement garauntees. Viewed from a moral, ethical or rationale point of view, this appears reasonable. On the other hand, the Government’s dire financial situation, which is already steeped in loans to the tune of Rs.40 lakh crores, has no way of implementing this even if it wants to.
What Is The Government Role?
It is the role of the government to help the weakest links, at a minimum, provide the much-needed investments in Silos, Warehouses, and deep freezer infrastructure as also providing water, electricity, seed, fertilizer and technological support from time to time. This would provide holding capacity to the small and marginal farmers instead of having to sell in distress as they are presently doing. The government needs to provide an ecosystem to enable productivity, crop failure protection and the above infrastructure in the agriculture sector.
What Is The Controversy And Arguments Of Stakeholders?
The new laws have kept the 7200 Regulated yards, hundreds of private yards, cold storage facilities, sub Mandis out of the trade areas putting them at a disadvantage. Further, there have been numerous committees set up a number of times only to scuttle the implementation of the M S Swaminathan committee recommendations. There are a number of issues but its best to focus on the most critical arguments.
|ARGUMENTS IN FAVOUR
|ARGUMENTS AGAINST THE LAWS
|These laws will be helpful to the farmers. They will have the freedom to sell to anyone. Multiple buyers will ensure better prices instead of being exploited by the middlemen as today.
|Most farmers have been free to sell anywhere.Poor farmers have no choice but to sell at the farm gate. So what’s new? Corporates can, even now, buy from the Mandis. This law puts the farmers at the mercy of the corporate companies with an unequal negotiating capacity & competence. 95% of of the markets have been FREE. Why have these farmers not got better prices? Pulses like Moong / Urad Dal etc. are procured at Rs.6000-7200 per quintal and retailed at Rs.180 per Kg. There is a wide gap between what the farmer sells and the final retail price, which is more than 30-50 times indicating businesses are making windfall profits. INSTEAD OF CONTROLLING THESE UNHEALTHY TRENDS, THE GOVERNMENT IS FURTHER FACILITATING CORPORATES. How are the farmers assured of better prices from private sector? Even in US, according to the Time magazine, small farmers are suffering.Moreover, middlemen are not eliminated by corporatization? Any large buyer has to enroll people with local knowledge and network to facilitate their purchase and logistics, a function being done by the middlemen today. All that will happen is that these very same people will become aggregators for the corporates. The irony is that when a farmer gets a contract, where does he have the choice of selling to the one who offers the most?
|APMCs have been charging the Farmers. The privatized Mandis will not have any levy. Private companies will setup Mandis in each Village near the farmer so that he can sell at farm gate reducing farmer’s hassles and eliminate the middlemen who are exploiting them.
|There have been inefficiencies in the Mandis and there is a need for reforms. However, it has to be done on an equitable basis.APMC middlemen have been providing services and APMC charges have been used in providing infrastructure for the farmers, which the Govt has failed to do. Businesses are not charities. Even if Private Companies buy their products they have to do it thru either their middlemen or their employees, which will reflect in the price. Moreover, why should there be no parity between the APMC and Mandis? The govt. could remove the fees of APMC. By removing levies on private sector, Govt agenda is deliberately to run down the APMCs.This trend has been seen in education and health. Initially for the two years good prices will be given by the private sector and once established, farmers(especially the marginal farmers) will be squeezed as experienced by the Punjab farmers in contract farming
|This law helps remove the needless barriers across states that will help farmers take their products anywhere to get better prices. This will also attract investors into the sector. .
|Farmers have been demanding mandis near as he cannot even afford to take his produce to the existing mandis and so it is a travesty to tell farmers that they benefit by being able to sell across states etc. Claim that farmers will benefit concedes that Mandis are not giving good prices. The only reason to bypass mandis is to get better prices from farmers not in a position to negotiate. The law appears to have been made to benefit only the large corporates who have the way with all to withhold and sell across states. Moreover, even under the existing laws farmers from UP are selling in Punjab APMC to get better prices. Bihar, Kerala have not had APMCS. Then, why have they not got better rates or performed better compared to those that are going to APMC?
|The best prices are possible by market mechanism. So, allowing the markets to determine the best prices will help both the consumer and farmer.
|Market mechanism would do that when the competition is perfect. This is not the case. Even today USA, Europe and other developed countries heavily subsidize ($ 22 billions by USA alone in 2019) their farmers despite having free market as proposed. How can India compete without matching these subsidies being given to either the farmers or the exporters? If it has to subsidize, why not the farmers than exporters?
|Need diversification of Crop patterns. Too much production of paddy etc. results in their rotting in the warehouses while cash crops can result in better price realization. Private sector can study the market needs and make capital investments in Deep Freezers, Silos, warehouses, technology etc. that will help improve the holding capacity to obtain better prices. Privatization will help bring farm efficiencies and market access in India and abroad.
|Farmers will always produce what will maximize theirprofits like businesses would. Government (better than private businesses) can incentivize farmers to produce the desired crops needed.Farm efficiencies are more a function of quality and factors of farm inputs than labour. Government needs to provide the needed information and facilitate. Private sector, by its very nature, is profit seeking. Therefore, it could be argued that Corporatization of farming could destabilize the food security concerns of the country. It is a well established and argued concern that there is desperate need for Silos, deep freezers, warehouses, transportation needed for better profitability for the farmer. This makes a good business case for investments. Why is private sector not investing in these and rent it to the farmer and /or share in the higher profits? Alphonso mangos have become unaffordable for the locals as exporting them provides better profits. Should it not be a concern that price of even essentials could go up for the domestic consumer in the chase for profits?
|MSP will not be removed and you have to trust the verbal assurances of the Government. APMCs will continue. Farmers have the choice of going to the APMCs.
|If there is no intention to remove the MSP, why is the Government reluctant to put it in writing especially when the Private Sector is going to buy? Why should the government be trusted? The following are only a few reasons to distrust: (a) The government has not been able to meet any of its commitments made with the farmers on MSP. (b) The government has not made adequate investments in agriculture as it was done before the green revolution (c) NitiAyog in their report strategize that the government must build a few large world enterprises and so the government is selling off the country’s public sector in favour of this strategy. (d) The government had promised to implement the Swaminathan Committee of MSP repeatedly since 2014 but did not. Worse, they attempted to mislead the nation claiming they have given MSP.
|Look at how corporatization helped Milk Industry. Privatizing health & schools have provided so many choices to people and improved the quality of delivery. The telecom privatization brought down prices and built efficiencies.
|The milk revolution came about only after the government’s effort at setting up Cooperative Amul and nurtured. It is only after it was well established that the private sector got into the field to gain from the urban consumption. Even today, the retail prices of milk are kept in check because of the dominance of the cooperative. The country has witnessed the significant exploitation by private sector during the Covid for providing health services. Now it is an established fact that the government did not invest adequately into Public health system and needsto do so. Similar is the case of Education, the poor have suffered due to high costs while government has abducted its responsibility to invest adequately into government schools or improve their quality. In both these examples, it is the poor who have lost. Telecom initially brought down prices to hook people (even by offering free telephones) and now is increasing prices at a rapid pace. It’s mainly the technology, which the Govt companies were prevented from entering into, and not privatization alone that has benefited the telecom industry, poor government services not withstanding.
|Contract farming will provide farmers with a certainty of purchase and help in the production process. China has increased its productivity compared to India. We have to make our agriculture productive internationally.
|Contract farming has always been possible and even before these laws they were being done – sale to sugar mills, ITC,Nestle, Frito Lay…. Contract farming has mainly helped large farmers. Can evidence be shown where marginal farmers have benefited? If Contract farming is beneficial, why has this not increased? Lessons from contract farming has been that they initially they pay good prices and then the farmers lose. The more important issue is one of equity. Can an illiterate poor farmer be able to negotiate with the corporates and demand a fair price and terms? The law does not even allow legal recourse to the farmers or allow people to be held accountable. China, a communist disciplined country, first developed a strong cooperative farming culture and made farming a profitable industry. It has control over the farm inputs and prices.
|Government does not have the money to either the purchase commodities or provide the infrastructure (as stated in the Supreme Court). Indian prices are higher than international prices.
|The govt. has the money to write off Rs.8 lakh crores for a few industrialists but do not have the money for discharging their duty to provide the necessary infrastructure to provide holding capacity to the farmer? The government has the money to spend on infrastructure for industry like SEZ, industrial corridors, highways, airports etc. to attract (including Foreign) Investments and indulge in aspirational projects like bullet trains, statues, Parliament buildings, railway station modernization (and the list can go on) but has no money to invest in infrastructure for agriculture that would cost a fraction of this for building basic infrastructure like silos, warehouses, deep freezers, drip irrigation, technology equipments, for the farmers to help them store their products and wait to get better prices instead of distress sales?
|The cost of landed wheat from Australia is lower than the MSP costs and therefore we need to bring in production efficiencies.
|Australian prices are lower than MSP mainly because of agro- input costs like fertilizer, electricity, water etc. and not because of labour. Indian subsidies are far lower than what other developed countries give to their farmers. Moreover, international productivity is mainly due to mechanization and technology.
|There are excess of 3.5 times buffer stock than required and rotting in the Godowns. Government cannot go on buying in the market to stock at such high prices.
|India is ranked 144 in its human index and there are so many poor that need to be fed. So, to say there are excess stocks in the warehouses displays lack of governance.. If shows the inability of the government to manage distribution. Moreover why not export the excess stocks instead of allowing them to rot? Moreover, excesses are because of the low purchasing power of the consumers.
|There has to be trust in a popularly elected government and parliament that passed the laws
|The government cannot be trusted because: (a) No farmer or farmer organizations have been consulted before these three laws were brought in. The least a govt. can do is to consult and seek the opinions of the people they are attempting to help (b) Farmers efforts to get the government to hear their views (went in vain for months)were not even acknowledged or invited for discussions. (c)the government not only created all kinds of hurdles ranging from digging 10X 10 feet trenches on the national highway; water cannons etc. to prevent the protests but also went to supreme court to stop the protest which is a fundamental right of a citizen. (d) When the Tamil Nadu farmers protested in Delhi for over 2-3 months to be heard, not even a minister or PM gave them a hearing (e) Inflammatory statements made by the government (f) Laws framed to benefit the corporates.
|Govt has mandate of the people and has the right to bring about laws. Laws have been passed by parliament and cannot be repealed. The govt agreed to two of their demands to show faith. Despite this, the govt is willing to talk to the farmers to persuade them that it is good for them.But farmers are not willing. Agitating farmers do not represent all farmers. Govt has to work for all farmers and not just those protesting.
|If mandate justifies decision of the government, for 70 years congress was given the mandate. Does that mean that all their decisionswere correct and could not be challenged? Even BJP had also held demonstrations then. So, this argument is mischievous. Constitution empowers only the States to formulate farm laws. Trade laws can come into effect only after the Mandis sale. So, center has no right to form such laws without even consulting the states. Further, the Laws passed by the parliament have been done in an unconstitutional manner.The speaker deliberately passed the voice vote(videos prove the speaker wrong) even when members demanded division. Parliament is the forum to seriously discuss and debate in detail such important policies & should not be rushed thru. As per norms, it should have been referred to select committee(s). In the govt. convened meetings, accepting non- issues like electricity without taking up the only main issues of MSP & repealing of laws raised by the farmers, is more a tactics of the government and does not show good faith. It is the government’s responsibility to create a conducive environment and convince.
|Laws cannot be repealed at the insistence of a few groups that do not even represent the farmer community but limited to a few organizations in a few states. They are naxalites, khalistanis, Pakistan agents etc. These people are holding the country to ransom.
|It is the obligation of a duly elected government to convince people who do not share their perspectives. Instead, Government vitiated the atmosphere by going to great lengths to prevent protests and discrediting them. They indulged in highly unethical tactics of branding protesters as traitors, anti nationals, apart from adopting aggressive tactics like using water cannons, digging roads to prevent protesters from conducting peaceful protests. Planting miscreants in the camps. Mischief-makers were caught in the camps (who confessed on camera in front of the police before being handed over to the police by the demonstrators). THEREFORE, THERE IS DISTRUST. Moreover, even ahead of the talks all BJP leaders, ministers including the PM declared that the laws will not be repealed and addressed others around the country without once coming to the protesters. If they can be adamant why not the farmers? Farmers have been demanding government to arrest the mischief makes but no arrest made or evidence provided to date. On the contrary, the govt departments like the ED have harassed those supporting the movement. Government has prevented farmers, in their states itself, from joining the protest in Delhi. Despite this many farmer leaders from across the country have visited to express solidarity with the movement and provided financial help.
|There have been wide consultations with a wide section of stakeholders in past. Congress did not have capability to bring in the law but BJP had guts to take this step. Opposition parties have changed their stand now. Despite all efforts to strike an amicable settlement, farmers do not budge from their one point agenda.
|All farmers and parties had recognized the need for APMC reforms and were consulting to find the optimal way forward on a comprehensive basis. Modi, as the CM, and BJP had opposed reforms and have changed their stand now. In any case, old consultations cannot justify non-consultation of NEW LAWS. BJP brought an MODEL APMC Act in 2017 with limited consultations with some states. The New laws have been brought without even this minimal consultation. RTI to the government claims showed lack of evidence on their claims of consultation.Govt. invited the protesting farmers to meetings (dictated whom they do not want in the meeting)with a prior declaration that there will be no repeal. They did not take on the agenda of MSP & repeal, which were the only demand of the farmers. 9 futile meetings went with neither side willing to show flexibility. How did the government go out of its way as claimed?
|Govt recommended that farmers must approach Supreme Court and set up committee to discuss further. The farmers do not even care for Supreme court or their appointed committee.
|This is not a legal case. It is a policy issue between the farmers and those who make the policies ie. The Government/Parliament. Await Supreme court decision on legality of farm laws etc.Farmers took a principled stand in not approaching the court. As time has shown, the government’s strategy to approach Supreme Court and the set up a committee of members who favour of the laws, exposes their attempt to manipulate the verdict and get the supreme court to endorse their laws.
|IMF has endorsed the government’s action.
|Has IMF dissuaded or prevented USA or European or other countries to stop their farm subsidies? Track record shows that India/China did much better when they did not heed the IMF advice. Since 1990’s, following most of the advice of IMF proved to be a disaster. The India’s indebtedness has increased to Rs 40 lakh crores since the last 6 years from Rs 29 lakh crores (mainly during 1990-2014. IMF advice is mainly tailored to benefiting free trade and Globalization. This has mostly benefited developed countries. Does Government of India have the ability to withstand the IMF push to take decision on merits of the farmer’s issue?
|Opposition parties are misleading farmers.
|Farmers have not allowed any political party (of significance) or any political leader to share their stage. So, government to make such false claims only reflects on their intentions. The farmers have openly challenged the government to name any Political leaders who have been given a platform to instigate the farmers? To date the government has shown none. BJP is known for its effective communication skills. Why have they not been able to convince the agitating farmers?
|The agitation is by rich farmers and middlemen and there are no marginal farmers. They are receiving foreign donations and living in luxury.
|It is the rich farmers with large landholding who would be preferred by large corporations as has been witnessed in the contract farming of the past especially in Punjab. Also, any logical argument will show how important the middlemen will be for the large corporations. Media personnel have roamed around freely in the camps and have not found any evidence to this charge. Sympathizers around the world support the cause. What’s wrong with this? Have the Modi supporters not funded his campaigns in USA and India?
The Way Forward
Farming has been unsustainable all around the world. Over 75% of our country’s population is dependent in farming. In the initial days after independence, government undertook so many projects like irrigation dams and other projects to boost agriculture. After Green Revolution, the government’s attention shifted away from farming and neglected investments in agriculture. Also, small and marginal farmers today characterize agriculture.
India cannot succeed without a profitable agriculture and agricultural sector. There is a lot of scope for agriculture industry to be developed. It must be the government’s responsibility to provide the needed infrastructure for farming as they do for industry.
So, the key issue is to make agriculture a profitable business. Adoption of the M S Swaminathan committee would resolve the issues and no committee are further needed. To make agriculture successful, it needs to have investments in warehouse, deep freezers, drip irrigation, good quality seeds, transportation and other farming inputs at reasonable price and access to markets. All this calls for a lot of investments. Government is faced with a weak economic structure and heavy indebtedness and does not have the money to invest. There is a need for private sector involvement to achieve all this.
The following are some of the ways that could be considered to make headway:
- MSP should be made mandatory for all commodities calculated on the best practices. This will incentivize the farmers to produce as efficiently as possible to maximize profits and also get assurance that his efforts will not be in vain.
- Just like Planning Commission used to prepare market projections for industry, Government must bring out crop patternrequirements and market potential for all commodities, fruits and vegetables. Farmers, like industry, will optimize theirproduce.
- Set up an independent Regulatory Mechanism that will prepare standard equitable contracts, provide insurance to farmers against fraudsters etc. Even the most privatized markets have required more regulatory controls.
- Build More APMCs and cooperative/ private markets in most places to test the efficacy of the same before bringing these laws. Remove some of the bureaucratic barriers thru administrative mechanisms.
- Incentivize and motivate farmers to form their cooperatives by removing political patronage, bringing in transparency and providing checks and balances. Marginal farmers to prevent the present influence by the rich landlords, middlemen and powerful people, can control cooperatives. Independent advisors& technical helpcan be appointed whose compensation is decided by the marginal farmer management and linked to the performance. Additionally, auditors can ensure transparency by publicly displaying the financials and their observations. There is no reason even government bodies cannot be run efficiently transparently and unshackled from bureaucratic controls.
- Facilitate industry to setup infrastructure like silos, warehouses, freezer units and earn from renting the facilities to the farmers.
- Incentivize and give fillip to agro industries which can source directly from farmers along the lines of
- Make rich farmers having more than 10-20 acres pay income tax.
Farmers need to partner with businesses that have the resources to help them. Private sector can not only bring in investments but also inputs, working capital funding, quality systems, planned approach, technical and managerial inputs to help the farmers. However, this can be workable only if government sets up a regulator mechanism that will ensure a 50% partnership between the farmers and the businessmen. Without a forged partnership framework between the farmers and businesses on an equitable basis, the farm policies will only destroy the farmers.