Sunday 21 July 2024

News Analysed, Opinions Expressed

Why we must support the protesting farmers


Basically, the farmers want a law that no agri-business company can buy at a price lower than the MSP. But the central government is refusing. This exposes its real intentions

Farmers protesting on the outskirts of Delhi against the central government’s new agricultural laws


Farmers protesting on the outskirts of Delhi against the central government’s new agricultural laws have called for a Bharat Bandh on Tuesday. The farmers want the withdrawal of three new laws that they say will leave them at the mercy of large corporations.

What are these laws?

(1) ‘The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020’ gives farmers and traders the freedom to sell and purchase farm produce outside registered 'mandis' under states' Agricultural Produce and Livestock Market Committees (APMCs). It says this will reduce transportation costs, eliminate fees and commissions, and give farmers better prices.

Agri-business companies, corporates and traders can open their own agri-markets and buy directly from farmers. But agri-trade outside APMC mandis is virtually unregulated. In case of a dispute, farmers have to approach a sub-divisional magistrate’s court, which is beyond their financial capacity.

The bill also directly hits at the rights and finances of state governments. Under the Constitution, agriculture is a state subject. But the law prohibits state governments from levying market fees and cess outside APMC mandis. The central government is intruding into a domain that is not in its jurisdiction to regulate.

(2) ‘The Farmer (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020’ enables farmers to enter into contracts with agribusiness companies, processors, wholesalers, exporters or large retailers for sale of future farm produce at a pre-agreed price. The government says the bill will insulate farmers from unstable market prices, enable them to get access to technology and better inputs, as well as eliminate middlemen, so farmers get better prices for their crops.

But the law doesn’t make it mandatory for a company to make a written contract with the farmer. It does not have any provision to penalise companies that don’t register contracts. Most important, it doesn’t specify that the contract price of the crop should be equivalent to or above the minimum support price (MSP).

India’s experience of the contract farming so far has been poor. Farmers usually get lower rates through contract farming when compared to selling in government mandis at MSP.

(3) ‘The Essential Commodities (Amendment) Bill, 2020’ removes cereals, pulses, oilseeds, onions and potatoes from the list of essential commodities. There will be no stockholding limits on these items except under "extraordinary circumstances" like war. The government can intervene only if there is a 50 per cent price rise over the previous year for non-perishable goods and a 100 per cent price rise over the previous year for perishable goods.

Till now, only farmers, farmer cooperatives and other farmer organisations didn’t have any limit for stocking agri-commodities. This bill gives farmers no new freedoms. But by allowing companies and traders to store as much of food as they want, the government is giving up its power to prevent hoarding and control runaway price-rise in food items.

We live in a country where onion and potato prices rise to unimaginable heights two or more times each year, basically owing to hoarding and price manipulation. This bill virtually legalises hoarding.

Prime Minister Narendra Modi has gone on record in his ‘Mann ki Baat’ radio programme to say that these bills will help small farmers, and it is only the middlemen who will lose. Why is it then that the farmers of Punjab and Haryana – which together have just 3 per cent of India’s land area but produce over 50 per cent of our wheat and 33 per cent of our rice – are up in arms?

The answer lies in one small phrase: ‘Minimum Support Price’ (MSP). MSP is announced at the beginning of the sowing season for certain crops, on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP). It serves to insure farmers against any sharp fall in foodgrain prices. In July 2018, the Modi government fixed MSP at 1.5 times the cost of production for 14 kharif crops.

The farmers want the government to scrap all three farm laws. If they will not do that, at very least, they want the government to amend these laws to state that no agri-business company can make contracts with or buy directly from farmers at a price lower than the MSP. They also want the government to prescribe MSP for all crops; not just a few as at present.

The central government is refusing to do this. It is spinning a legal fiction that the MSP has always been an administrative mechanism and can’t be a legislative tool. This exposes its real intentions.

It is instructive to note here that in 2011, when Prime Minister Narendra Modi was Gujarat Chief Minister and the Chairman of a Working Group on Consumer Affairs, he had submitted a report to the then Prime Minister Manmohan Singh recommending that no farmer-trader transaction should take place below MSP for any crop. Mr Modi’s panel recommended that a law should be enacted for this. 

How times and people have changed…!

Disclaimer: Views expressed above are the author's own.

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Ashwin Tombat

Ashwin Tombat has been the Editor of Gomantak Times and Herald. Worked as an Associate Editor of national magazine Gentleman in Mumbai, before shifting to Goa. Loves sailing, also participates in Marathons. Has worked as an activist in students's union and trade unions in Maharashtra. Also an artist of Street Theatre during student days.


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