It’s a No Green Signal from the Farm World

Context: Prime Minister blamed the Opposition parties for misleading farmers about the three Bills on agriculture

The 3 Bills: 

• The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
• The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 
• The Essential Commodities (Amendment) Bill, 2020.

Farmers concerns are not politically motivated because

• Not a sudden protest: Farmers have been protesting against the Bills ever since it was promulgated as ordinances in June. 
• Concerns within the government: The resignation of Food Processing Industries Minister (and Shiromani Akali Dal MP), Harsimrat Kaur Badal.
• Dissenting voices from various mass organisations.

Significance of the Bills

• Does away with government interference in agricultural trade: By creating trading areas free of middlemen and government taxes outside the structure of Agricultural Produce Market Committees (APMCs)

• Remove restrictions of private stockholding of agricultural produce. 

Concerns with the Bills

• No consultation:

• No consultation with State governments even though the subject of trade and agriculture are part of subjects on the State list. 
• No consultation with other stakeholders including farmers, traders and middlemen.

• Corporatisation of agriculture and a withdrawal of government support

• Poor understanding of functioning of agricultural markets: 

• APMCs do play an important role of price discovery essential for agricultural trade and production choices.

• The middle­ men are a part of the larger ecosystem of agricultural trade, with deep links between farmers and traders.

• Farmers participation outside is already relaxed: APMCs account for less than a fourth of total agricultural trade.

• Fears of withdrawal of Minimum Support Prices (MSP): 

• Lack of regulation in non-APMC mandis is seen as a precursor to the withdrawal of the guarantee of MSP-based procurement.

• Fear of crony capitalism: Preference for corporate interests comes at the cost of farmers’ interests 

• For E.g. Coincidence of the entry of two of the biggest corporate groups (Adani and Reliance) in food and agricultural retail and the timing of the Bills have not gone unnoticed.

• Previous Failures: Bihar abolished APMCs in 2006, led to lower average process compared to the MSP for most crops.

• For E.g. as against the MSP of ?1,850 a quintal for maize, most farmers in Bihar reported selling their produce at less than ?1,000 a quintal. 

• Declining farm gate prices: Lack of government regulation amidst fall in Wholesale price Index representing farmgate prices will add to the farmers’ woes.

• For. E.g. Decline in basmati rice prices by more than 30%
• Decline has been sharper for most crops where MSP-led procurement is non-existent
• Cash crops such as cotton have seen a collapse in prices in the absence of government intervention.

• Declining farm gate prices: Lack of government regulation amidst fall in Wholesale price Index representing farmgate prices will add to the farmers’ woes.

• Reflection of mistrust: Ad hoc interventions by government such as raising import duties on masur and a ban on onion exports raise suspicion about the intent of the government to leave the price discovery mechanism on the market.

Conclusion: It is important to take all stakeholders into confidence as the current protests by farmers are essentially a reflection of the mistrust between farmers and the stated objective of these reforms.