Economic Highlights
New Delhi, 26
September 2020
‘Landmark’ Farm Bills
DON’T SOLVE PROBLEMS
By Shivaji Sarkar
The bulldozing of the
two bills -- Agricultural Produce Trade
and Commerce (Promotion and Simplification) Bill and Farmers (Empowerment and
Protection) Price Assurance Bill amid pandemonium in the Rajya Sabha and
rushing through next day with Essential Commodities Act raises concerns that
may not be real but certainly a responsibility of the movers to remove.
The stormy Sunday in the
Upper House has changed it all. The two farm bills are crucial not only for the
farmers but for the economy and social well being of the country. A “smooth
sailing” with voice vote even in that chaos does make people wonder about the Government’s
tearing hurry and intent.
The protests, both of
the farmers and the Opposition, because of their ignorance or better
understanding of the ground situation, do stretch a bit too much. Rajya Sabha Deputy
Chairman Harivansh Narayan Singh could have given time to the Opposition to
debate or even refer it to the Standing Committee for the wearisome situation
to cool down. But it wasn’t the case. And while Prime Minister Modi said it’s a
“watershed moment in history of Indian agriculture”, the Opposition retorted
saying it is “historic for the wrong reasons”. Such moments need more care to
convince the beneficiaries.
There is uproar across
the country-- not only in Punjab, Haryana but even in Telangana and other States.
The Opposition acted on its nerves in the pandemonium and certain unprecedented
scenes were created. Eight MPs were suspended, which was avoidable.
The Deputy Chairman
should have been aware of the countrywide concern, which may have been
misplaced or not. A livid Opposition has gone further deciding to move
no-confidence resolution seeking his removal. The Chair is preserver of House norms
and democratic propriety and thus could have avoided the haste to push through
the bills. In fact, he should have had a division, so that doubts if any, even
by the farm community, on the passage of the Bills would have been cleared. The
Opposition has been provided with a handle.
The concerns that
rock the nation are that the Agricultural Produce Marketing Committee (APMC) mandis
are being dismantled, Minimum Support Price (MSP) would gradually be done
away with and the corporate are taking over the Indian farm market. None of it
may be true but still the nation wonders about the method adopted by either the
House chair or others. It may have or not served a political purpose but has
raised many more queries.
Difficult solutions
need patience and many have raised queries about the situation in Bihar. But
it’s certainly not an issue in Bihar Assembly elections. Recall, it dismantled the
APMC mandis in 2004. Even the Punjab traders are going there to buy food
grains at low prices, carry it back and sell it to the Food Corporation of
India (FCI) at the MSP and still make a profit. The buzz is that Bihar farmers get
20 to 30 per cent less than the MSP.
In the last season as
per data presented in Parliament, 1.24 crore paddy farmers and 44 lakh wheat
farmers got the MSP. The PM-Kisan scheme records 8.12 crore farmer families
having up to two acre of land, though actual numbers are higher. It means 94
per cent of farmers sell their produce at non-MSP rates. The concern of the
government that only a fraction of the farmers get the MSP is not misplaced. However,
it’s true that the MSP acts as floor price even for deals below it.
The slogan of ‘One
India One market’ has not succeeded there. The Upper House should have
discussed and debated it. Avoiding it has raised unseemly allegations creating an
impression that the nation cares not much for its people and may be working
under pressure.
The argument that the
first bill would liberate the farmers from the unjust situation that they are
locked in also may not be correct. The new bills may be well intended but
ground realities of multiple markets do not exist to give farmers the benefit of
better price the bill promises.
The APMC mandis
do not promote competition. Presently, there are 2477 principal regulated APMC
markets and 4843 APMC sub-market yards. The APMC functions under State
governments. In 2003, during NDA-I, the Union Agriculture Ministry prepared the
model APMC Act and for over a decade, since 2009, UPA-II, has been pursuing the
States to change their laws to provide for direct sale of farm produce to
contract sponsors; setting up special markets for “specified agricultural
commodities”; permit persons, farmers and consumers to establish new markets
and provide for direct sale by farmers to consumers.
The Ministry in a
document stated that if persuasion with the States fail, it may be necessary to
see what the Centre can do. The new bill echoes it as the ministry propagated
to increase “competitiveness” and impliedly better price. At various stages it
was opposed and the arguments that the Opposition is now presenting were presented
before. The UPA government did not pursue it finding the provisions contentious
and uncertain.
The new law allows
sale of produce outside the APMC purview. In reality the number of markets will
not grow. Anyone, however, can procure from farmers without the need for a
licence and payment of mandi fees and taxes to States. Most traders are
likely to abandon the official mandis and set up informal markets
outside mandi gates. Gradually the mandis might be abandoned. It
means the bidding process to establish the highest price for a produce might
also vanish. This would make MSP redundant and the fears that farmers would be
exploited by a cartel of businesses may stalk them.
The misgivings among
farmers emanates from it as also that the new bill does not mention that a deal
would be deemed proper if the price paid is at MSP or higher than it. Since
multiple mandis do not exist where the buyers may have to compete, the
farmers would continue to lack bargaining power. In the new situation too the middle man is
likely to thrive.
The second bill will
make farmers go for contract farming with trade firms, wholesalers, big
retailers and exporters including large corporate. Though it can supposedly
protect farmers from price vagaries as many of them can have contract even
before sowing but gradually might make them dependent and exploited as the free
mandis would vanish with its MSP. The EC Act was not deterrent. It has
become ineffective and it is good to decriminalise trading and unnecessary
harassment.
Let the nation
rethink, discuss, create more competitive markets and come out with concrete
solutions. Farmers have been tossed around and despite good intentions the new
laws do not seem to solve their problems.---INFA
(Copyright, India News & Feature
Alliance)
|