Context: The ambitious initiative of the Narendra Modi government to bring about far-reaching reform in agriculture through 3 bills has run into a strong push back from the farmers
Background:
Farmers’ agitation: Strong pushback from farmers against three Bills that seek to replace ordinances issued in June, on key aspects of the farm economy — trade in agricultural commodities, price assurance, farm services including contracts, and stock limits for essential commodities.
Issues with the introduced reforms:
Abolition of Minimum support price (MSP): Fears that the free market philosophy at its core could spell the end of MSPs for produce that has so far been centrally procured by the government.
Intruding into State subjects: Some states suggest that as the agriculture and markets are State subjects, there should be no tinkering with the MSP and Agricultural Produce Market Committees (APMC)
Fall in revenue for states: provisions in the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, providing for unfettered commerce in designated trade areas outside APMC jurisdictions without levy of any fee
Centre becoming all the more powerful: Empowering the Centre to issue orders to States in furtherance of the law’s objectives.
Impact on small farmers:
Low accessibility: There is currently one market under the APMC system for 434.48 sq. km on average — well below the recommendation of the National Commission on Farmers (NCF), at one market for 80 sq. km.
Without strong institutional arrangements, laissez-faire policy may harm lakhs of unorganised small farmers.
Mere liberalization does not lead to private investment: Fore, E.g. When Bihar removed the APMC system; markets suffered a loss of fee revenue, with no significant private investments in the sector.
Way forward
Repair the existing system: Fund the expansion of the APMC market system, removing trade cartels, and providing farmers with good roads, logistics of scale and real-time information.
Empowering the famers: Emphasis should be on empowering farmers through State Farmers Commissions rather than opting for heavy centralization