The farming community had been up in arms ever since the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government’s issuance of three ordinances pertaining to the agriculture sector. On September 14, three Bills — The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, and The Essential Commodities (Amendment) Bill — were tabled in Parliament to replace these ordinances.
While the protests were sporadic till last month, they have intensified in Haryana and Punjab after September 14. Agitators in Haryana, under the aegis of the Bharatiya Kisan Union (BKU), blocked the Delhi-Chandigarh National Highway. On September 17 the Bills were passed, following which Shiromani Akali Dal’s Harsimrat Kaur Badal, who held the Food Processing portfolio in the Narendra Modi Cabinet, chose to tender her resignation in solidarity with the protesting farmers.
The misgivings of the farmers seem to be on account of the impression that has gained ground that these reforms are a precursor to the Modi government’s move to do away with the Minimum Support Price (MSP) regime, thus making farmers vulnerable to the vagaries of the fluctuating market. The farmers have largely been protesting The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, which is, in fact, a much-anticipated reform that is set to transform the marketing of agricultural produce.
The monopolistic Agricultural Produce Market Committees (APMCs), which have been setting and controlling the prices of farmers’ produce through cartelisation, will cease to exert control over farmers with this far-reaching reform. The farmers will henceforth be free to sell their produce at farm gates to any trader willing to buy it at a mutually agreed price, bypassing the mandis.
The protests being witnessed in Punjab and Haryana seem to be engineered by commission agents and middle-men, feeding on the insecurities of gullible farmers. That the Left parties would oppose these reforms was a foregone conclusion owing to their trade-unionist approach to issues, but the fact that the Congress too would raise objections is rank opportunism, as the APMC reforms have had bipartisan support for nearly two decades.
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill is an equally important reform which would make it possible for farmers to get into formal contracts with traders/businessmen before sowing and, which would assure them a guaranteed price for their produce.
The formalisation of such contracts would give a sense of security to farmers, unlike the present situation, which render them vulnerable to trading cartels and price fluctuations. For a country that is often witness to farmers hitting the streets for government hand-outs, these Bills would truly empower them to take informed decisions and be masters of their own destiny.
In fact, the long-term exploitation of farmers by various stakeholders, including state governments through the arbitrary demarcation of APMCs (often extending to an entire taluk or even a district) and taxing farmers (as high as 8 percent in Punjab) on the selling of their own produce was rank exploitative. It is actually the small and marginal farmers who are going to benefit the most out of these two reforms as farmers with large landholdings already have some form of protection by way of MSPs.
The possibility of forward contracts will also empower smaller farmers to seek more profitable crops than go for the safest choices. This will increase productivity, crop diversity and lead to better demand-supply outcomes.
The Essential Commodities (Amendment) Bill warrants a closer inspection. Although it is an extension of the other two Bills, as the amendment would result in the development of cold chains and storage facilities, the possibility of hoarding and price manipulations need to be factored into. The Bill does give the government powers to impose restrictions in case of a 100 percent increase in the prices of non-perishables and 50 percent in perishables.
By and large, the only logical argument put forth by the Opposition against these reforms pertain to the powers of the Centre to enact such laws as agriculture and markets are State subjects — entry 14 and 28 respectively in List II. The Centre’s contention that trade and commerce are part of the concurrent list would probably hold them in good stead if these were to be judicially challenged.
The government will also have to explain the under-allocation of funds to the Food Corporation of India (FCI), which is being extrapolated as a sign of the government’s lack of commitment to procure grains at MSP.
Conspiracy theorists suggest that the timing of the introduction of the ordinances, followed by the Bills, is suspect, but then there is never a wrong time to do the right thing. It was high time that the government concentrated on agricultural reforms in any case. Anand Kochukudy is a political commentator. Views are personal.