Thousands of farmers are camping along the borders of Delhi and have said they will not move until the three farm laws that the government recently passed are taken back.
The farmers’ protest against the three farm laws that seek to liberalise the market for agricultural produce and commodities has entered the fourth week.
A survey by Network 18, however, showed that the support for the reforms is strong in most agrarian states barring Punjab, where this issue has become highly politicised because of intense political activity.
The survey showed that farmers from Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, and Telangana favoured the reforms.
In September, the government legislated three laws— the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, and the Essential Commodities (Amendment) Act, 2020—as part of a broad strategy to reform India’s agriculture.
The government has argued that these laws are aimed at shifting the terms in favour of farmers by getting rid of unscrupulous middlemen and vested interests that distorted markets.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 seek to facilitate barrier-free trade of farm produce outside the markets notified under the various state Agriculture Produce Market Committees (APMC) laws.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 define a framework for contract-farming.
The Essential Commodities (Amendment) Act, 2020 removes stock limits on agricultural produce to enable merchants to directly purchase produce from farmers in large quantities in times of bumper harvests.
The Network 18 survey showed that more than six out of the 10 respondents to the survey (60.90 per cent) believe farmers can get better prices under the new farm reform laws, while nearly three out of four (73.05 per cent) of the farmers surveyed were in support of reforms and modernisation of Indian agriculture.
Seven out of ten (69.65 per cent) of the respondents welcomed the government’s move to give farmers the choice to sell their produce outside APMC mandis.
These findings run contrary to the protesting farmers’ fears that the new laws would usher in big corporate groups into agriculture produce markets. This could create monopolies, allowing them to fix prices at low levels, hurting farmers.
APMC regulations require farmers to only sell to licensed middlemen in notified markets, usually in the same area where farmers reside, rather than in an open market. This limited farmers’ ability to sell their harvest outside their local APMCs.
APMC markets were initially set up in the 1960s, primarily aimed to prevent distress sale by farmers, and enable better price discovery for their produce by creating critical infrastructure.
Over the years, however, these APMC-driven markets had become barriers for farmers to get a fair price for their produce as they were forced to sell it through these committees.
The APMC system primarily rests upon a commission-based network. Only licenced intermediaries can operate in these markets. These intermediaries include commission agents, wholesales, transporters, railway agents and storage agents, among others.
In December 2010, the Competition Commission found out that nearly 20 per cent of that month’s total onion trading at the Lasalgoan APMC, Asia’s largest onion market in Maharashtra’s Nashik, was accounted for by one firm.
This resulted in a large “price spread”, meaning many groups of middlemen pocketed their share before it reached the final consumer, leaving a yawning gap between the price the farmer received and the eventual retail selling price.
A 2012 report by the National Council of Applied Economic Research identified collusion as a major hurdle in fair trade, with a handful of traders monopolising almost all big markets.
The government has now said that the new central law— Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020—will enable farmers to sell their produce at attractive prices. The new law will also remove barriers in inter-state trade, allowing farmers from UP, for instance, to sell to buyers and merchants in Gujarat through an e-trading framework.
The Network 18 survey showed that nearly six out of ten (56.59 per cent) respondents believe it was time for the protests to be called off. More than half (53.6 per cent) of the farmers surveyed said they supported the new farm reform laws, while less than a third (30.6 per cent) do not support and another 15.8 per cent were not sure.
Nearly half (48. 71 per cent) of the respondents believe that protests against the farm reform laws were politically motivated while about a third (32.59 per cent) believe these are not politically motivated, while about a fifth (18.70 per cent) said they were not sure.
More than half of the respondents (52.69 per cent) believe that the protesting farmers should not insist on repeal of the farm reform laws.
A majority of the respondents (53.94 per cent) also supported the government's offer of a written assurance that minimum support prices (MSP) would continue.
Protesting farmers fear that the new law could imply that the government will, eventually, stop buying from them at MSPs, leaving peasants at the mercy of large corporations.
MSPs, which began with the Green Revolution, is the price at which the government buys crops from farmers. It acts as a kind of guaranteed floor price, aimed to prevent distress sale by farmers.
Farmers want a law guaranteeing that all major produce will be bought at these government-fixed prices. The idea is to ensure that no minimum state-set prices for all major farm produce.
The government has already offered broad concessions to farmers, proposing to amend two farm-reform laws, and offered in writing an assurance to continue the system of minimum support prices (MSP).
Protesting farmers have also opposed penalties on pollution-causing crop-stubble burning, invoked through an ordinance in October. The government has said it will come up with a solution to this issue.
In October, the government promulgated an ordinance to set up the Commission for Air Quality Management in the National Capital Region (NCR) and Adjoining Areas. The law is aimed at lowering air pollution in the NCR region that is significantly driven by burning of crop stubble.
The survey, however, showed that more than two of three respondents (66.71 per cent) disagree with the demand for withdrawal of the ordinance banning stubble burning.