Economic Highlights
New Delhi, 4 February 2011
Monopoly In Farm
Sector
MNCs PLAYING HAVOC
By Shivaji Sarkar
The US
has suffered and leads a global meltdown. India may set a global trend in
pawning agriculture to lobbyists who are using price rise in a conspiratorial
way to dismantle a significant tool, the Agriculture Produce Marketing
Committee (APMC), created for ensuring fair prices to farmers and create food
security for the country.
Scandalously, food inflation continues to hover around 17 to
18 per cent. It had touched 20.56 per cent a year back. One needs to realise
that the present steep hike is over the figure last year. Since the lobbyists
are having support of the Planning Commission’s Deputy Chairman Montek Singh
Ahluwalia, the country may be in for severe trouble.
The poor might die of hunger and the rest of the population
could suffer severe nutritional issues. Ahluwalia’s statement that prices must
not be curbed “as it signifies affluence” is a crude way to pave the mode for
companies who are keen on capturing the farm trade and creating monopolies.
Recall, India’s first Prime Minister Nehru had set-up
the Planning Commission for ensuring creation of infrastructure, quality of
life, stopping exploitation of people and equitable distribution of wealth. In
the initial decades it contributed significantly by achieving the objectives.
But of late, it has started speaking a language that is certainly not
pro-people.
Ahluwalia’s view that the solution does not lie in imposing
price or monetary restriction but lies in exempting horticulture and vegetable
produce from the ambit of the APMC Act is certainly not a pro-people view.
It also exposes the present Government’s mindset of how it
wants to act for the benefit of large companies who see agriculture trade as
cash cow. The Planning Commission should be well aware of its dangers. Not all
experts in the Commission think the way Ahluwalia thinks. They have expressed
the dangers of his moves of opening up the farm and retail trade to
multi-nationals (MNCs).
The MNCs have partially succeeded in eroding the market
structure by manipulating their controls in the butter trade and trading of
some vegetables like tomato. It is apprehended that even in jacking-up onion
prices they have played a significant role directly or indirectly.
The Planning Commission does not see these as danger signals
as big money flows. However, mandis created
in the mid-1960s for marketing agricultural produce have come in the way of this
laundering. So a concerted move is on by the MNCs backed by industry
organisations like FICCI and CII. As the Government was not expected to toe
their line.
Notwithstanding poor management, mandis have played a critical role in ensuring remunerative prices
and timely purchases for the benefit of farmers. The system needs to be
strengthened and not dismantled.
Before the creation of mandis,
farmers were paid low prices at the time of harvest and distress sale was a
normal phenomenon. The green revolution backed by procurement prices --- minimum
support prices for wheat, rice, cotton and other crops --- helped farmers earn
not only a remunerative price but also filled Government warehouses for
effective intervention for keeping prices under check.
The mandis created
in 1966 provided an assured market for farm produce. During the global food
price increase in the 1980s, India
remained insulated. It also ensured that food reached the poor through the PDS which
contributed to the national growth.
Ahluwalia’s suggestion for a free rise of prices is
apparently becoming a reality. Rating agency Crisil’s chief economist DK Joshi
says, “Overall inflation will remain high for the rest of 2011 as non-food inflation will dominate the
months ahead”.
Importantly, price rise of essential commodities and food
should be treated as a grave concern. As it affects the overall quality of life
and makes living expensive. But that is for the common man. For the large
companies it ensures huge profits. Yes, the higher the prices the fatter are
their coffers.
This is not all. During the past few years the companies
have been subverting labour laws. This has reduced the average working life of
not only a blue collar worker but even in most cases hit the white colour employees.
Thus, the quality of life is decreasing.
A Government is elected by the people, the working class,
and is expected to protect it. It needs to note that large corporate profits
have driven countries like Brazil,
Argentina and Mexico to most
severe inflationary trends. Markets in these countries are controlled by US
multi-nationals. Is India
now repeating what has happened in Latin America?
If that is so the kind of unrest these countries have seen may not escape us as
well.
The way the Planning Commission as well as the Agriculture Ministry
are trying to dismantle the procurement structures and are looking for an early
opportunity to hand over the mandis
to private companies may put the last nail in the comfort the nation enjoyed on
the food front.
Remember, the 2005 amendment to the APMC Act allowed private
traders to bypass the mandis. The
present price situation is a result of this anti-farmer provision. Whereby, it is actually passing on the
control of food into the hands of a few big players, who are manipulating
prices at will. The nation needs to understand the dangerous game being played.
In 2006-7, companies
like Rallis, Hindustan Lever, ITC, the Australian Wheat Board and Cargill had
purchased wheat directly from farmers. Since the companies purchased directly
from the farmers, the Government godowns remained
empty. To meet the requirement for the PDS, India had to import roughly 8
million tonnes of wheat.
Ahluwalia’s advocacy for exemption of onions, apples and
vegetables from the APMC laws would ensure double exploitation of the farmers
and as well as the consumers. It is likely to kill the procurement system. He is
suggesting the destruction of the foundations of food self-sufficiency built
over the past five decades.
Certainly, the APMC law is not responsible for food
inflation. Instead, its subversion by the MNCs is. Let us protect what the
people-oriented leaders of the 1950s and 1960s have created and start the
process of cleansing the “think tanks” like the Planning Commission and its lobbyists.
The country needs be led by leaders like those in Bihar or Gujarat
and not “experts” unconcerned with realities. ---- INFA
(Copyright,
India News and Feature Alliance)
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