The New Agriculture Bills Tug-of-War:

The three Farm Bills passed in the Rajya Sabha in September 2020 to reform the agricultural sector has been strongly opposed by both - the opposition in the Parliament and also by the farmers of Punjab and Haryana and is now gradually spreading into the whole nation. The importance of the reforms can be gauged from the fact that 60% of country's population is engaged in agriculture directly or indirectly and agriculture contributes 18% of the country's GDP.

To comprehend it, let's see what the bills are like:

  1. 'Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020:
  2. The farmers were initially restricted from selling their agricultural produce anywhere other than government-approved Mandi's where the middle men play a dominant role. This bill is introduced with the concept of 'One Nation-one market' that allow farmers to sell their agricultural produce anywhere in the country.

  3. 'Farmers' (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020:
  4. This Bill is intended to empower farmers to engage in contract farming with other private parties so that they will get the price assurance before sowing the crop.

  5. 'Essential Commodities (Amendment) Bill', 2020:
  6. This bill removed some agricultural products like pulses, oilseeds, onions etc from the essential commodities list, and thereby removed restrictions on the storage of these items.

Pros:

It is presumed that the Farm Bills have some positives

  1. It will end the monopolies of Mandis and free the farmers from the clutches of middle men
  2. Make the farmers free to sell their produce anywhere, where they can fetch better price for their produce
  3. It will help to stabilise the demand and supply and thereby stabilise price
  4. Remove the middle men, where the corporate houses can bridge the gap between the farmers and ultimate consumers
  5. Private investment will help to modernize the agricultural sector in different aspects
  6. Contract farming will help the farmers get price before hand also reduce the input cost as some private companies provide, fertilizers, pesticides, seeds and equipments to farmers.

Cons:

  1. Primarily what the farmers fear is that the Farm Bills of 2020 will eventually close the Mandi System and Minimum Support Price (MSP)
  2. Agriculture and trade being state subjects, the states are not consulted and the farmers voice were also neglected before passing the bills.
  3. The bills are considered un-parliamentary because they are not ethically passed. There was no clear voting. They passed the bills on a mere voice voting.
  4. Even if the big affluent farmers get a good deal from the corporate houses, the majority of small farmers will be dire straits and might lose everything. Also the states will be losing revenue from the APMCs / Mandis which comes in crores.
  5. Yes, APMCs have some serious problems but that could be rectified and strengthened within the concerned state itself. The fact also cannot be denied that APMCs are very helpful for small and marginal farmers for not just in selling their produce but also to know the prices & production choices. However many states have liberalized the APMC acts.
  6. Again there is no guarantee that the farmers' income will be increased by these bills.
  7. In a country like India, where transportation is a big issue, One nation - one market concept may not be much useful to small and marginal farmers, because of high transportation cost and transportation bottle necks. Thus, for the farmers selling their produce at the nearest APMC is logically more viable.
  8. The farmers also apprehend that in contract farming they may turn to be weaker when it comes to price negotiation or disputes. They may also be slaves of the corporate houses in the near future.
  9. Also for the small farmers, it will be impossible for them to reach to corporate houses for the produce.
  10. The new farm bill, by removing the restrictions on the storage of some food grains, big business entities may hoard commodities and dictate terms to farmers which might eventually fetch them less price and also increase the ultimate prices artificially.
  11. Unless the prices are regulated by the government with written MSPs, the market will go into the hands of big businesses putting both the farmers and the consumers at the risk of exploitation.

Looking at the size of the India's agricultural sector two points need to be considered for its betterment:

  1. One is to strengthen the agricultural procurement system and ensure that products that farmers bring to the Mandi are bought at the announced floor price. Build more Mandis, bring mandis closer to farmers, facilitate better transportation and gradually remove the middlemen form the mandis. I'm using the word "Middlemen" because in the current scenario, the farmers are directly or indirectly under the clutches of the middlemen. But for changing all these, intension has to be there and the onus is on the Govt. ( be it State or Central)
  2. The other is those who favour privatization must also be religiously committed to the corporatisation of agriculture. It should be assured that corporatisation of agriculture does not harm the sector in any way but cut down costs and reduces trade margins so that the ultimate prices for the consumers can be justified. This can be possible only if the capitalists with a noble vision of not only profit but also growth and development of the farming community enter the farming sector directly with efficiencies of scale and improved labour productivity cutting down cost and thereby increasing profits. All these are to be done under very strict vigilance, adherence of rules and guidelines for the corporate sector. But it is better said than done.

Globally, the history of privatization in agricultural sector proved that small and marginal farmers could not stand the competition and got uprooted after the private players entered the sector. So, the question of farmers surviving in India post privatization is very trifling.

Having said this, the fact also cannot be denied that India is facing stiff disguise unemployment in agricultural sector due to high population growth. But even than farm bills can hardly be justified because there is no or hardly any job security in the organised services sector. Most of those who were forced to leave agriculture had to become self-employed, fight out for very existence. To make things worse, demonetization and GST broke the backbone of India's unorganised sectors that so long absorbed and employed so much of country's population and that the organized sectors are not operating at par to their capacities and where expansion is farfetched dream. As such, how can one believe that farmers who give up farming will end up getting better jobs outside agriculture?

Now, if the govt. strongly feels and believes that privatisation or corporatization will benefit the farmers, what is preventing the BJP Govt. to make some legal changes and make MSP a Law? What is the harm in fixing MSP every year if the farmers get a better price in the open market? Also, technically, if private players, procures the agricultural products paying more than MSP, the government actually gains financially, as it will not have to pay a penny for MSP from the govt. exchequer.

What I fail to understand is that knowing very well that farm bills will create a nationwide uproar primarily among the farmers, the opposition, individual States, "Why is the Farm Bill 2020 passed in such controversial a way?" This attitude and approach of the ruling Central Govt. has created an air of suspicion all around and has also cracked the very federal structure of the country as a whole.

Once again all eyes on India and this time for Farm Bills not very well conceived and implemented. Perhaps the government needs to assure farmers with a written law that MSP and the Mandi System will not be withdrawn.