Agitating for Middlemen or Farmers?

Context: All attempts at agricultural sector reforms have seen resistance, but the incumbent government has shown the courage to implement them. The point of concern now is how the chaos that ensued will be managed.

Past Attempts at Farm reforms: Manmohan Singh in 1991, Yashwant Sinha in 1999 and Jaswant Singh in 2003 attempted to reform fertiliser subsidies, but all faced political backlash. 

Significance of the reforms:

• Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act does not encroach upon the Agricultural Produce Marketing Committee (APMC) Act.
• It promotes free movement of farm produce, inter-state and intra-state trade.
• It encourages the development of new mandi-farm infrastructure, thereby:
• Improving market access and reducing logistic costs for farmers.
• Increasing the level of competition.
• Bringing better prices, higher income and revenue for farmers.
• Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act: draws inspiration from states who have passed separate contract farming laws earlier.
• Large farm-holders have gained from contract farming with multinational companies such as ITC, PepsiCo, as against expectation.
• Small farmers are encouraged to form Farmer Producer Organisations (FPOs) that will increase their bargaining power, enabling economies of scale in production and post-production activities.
• This will help small and marginal farmers reap benefits of higher price and income, lower interest rates on loans, help in adoption of the latest technologies and use of modern farm implements.
• Minimum Support price to continue: The Centre has reinforced the fact that even with these reforms, that the practice of procuring farm produce at MSP will not be done away with.

Conclusion: Without standing on prestige or protocol, the government should directly engage the agitating farmers, and convince how the three farm laws are in their interests.