In the ongoing parliament session, the opposition has gone into protest mode over the two bills passed in the Lok Sabha. In the din created by the opposition one can hear the over-use of a phrase, “anti-farmer law”. How are the two bills passed in the Lok Sabha anti-farmers? Again, the scaremongering like, it will push farmers towards the exploitation of big corporates and the existing market system along with the end of Minimum Support Price, are available to hear. None of these have any factual basis. Here is a quick look of myths and reality in this regard.
Two Bills in a Gist
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 simply ensures freedom of selling for farmers. It opens up competitive alternative trading channels to promote efficient, transparent and barrier-free inter-State and intra-State trade and commerce of farmers’ produce outside physical premises of markets or deemed markets notified under various State agricultural produce market legislations.
Now what is “anti-farmer” here? Farmers can sell their produce to anyone or they can still sell their produce to APMC or any local mandi. This is a pro-farmer step which provides the community with choices.
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 brings a national framework on farming agreements that protects and empowers farmers to engage with agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce at a mutually agreed remunerative price framework in a fair and transparent manner.
Farmers with entrepreneurial spirit can explore such avenues. Staying away from such agreements is anyway the choice that the farmers always have. Here comes the vague argument that farmers can be cheated by the rich corporates. But the law provides safeguards. Sale, lease or mortgage of farmers’ land is totally prohibited and farmers’ land is also protected against any recovery. Effective dispute resolution mechanism has been provided for with clear time lines for redressal.
The Experts Opinion
All the experts in the domain of agriculture and economy do agree that these reforms will strengthen farmers. They are unanimous in claiming that the measures will weed away the middlemen from the agricultural market and the benefits will ease both farmers and consumers.
A long-time watcher of the agriculture policy space and an expert in that domain, Ashok Gulati has hailed the move when the measures were announced back in May. He wrote, “the proposed Central law to allow farmers to sell to anyone outside the APMC yard will bring greater competition amongst buyers, lower the mandi fee and the commission for arhatiyas (commission agents) and reduce other cesses that many state governments have been imposing on APMC markets. Our farmers suffer more in marketing their produce than during the production process. APMC markets have become monopsonistic with high intermediation costs. The proposed law will open more choices for the farmers and help them in getting better prices.”
Back in 2018, economists Anirudh Burman, Ila Patnaik, Shubho Roy, Ajay Shah together wrote an article in which they highlighted, “Unlike other commodities, agricultural products cannot be transferred freely throughout the country without being subject to state-specific restrictions. Markets in agricultural food products are governed by legal requirements or restrictions which were put in place with the intention of creating markets (such as APMCs) but have had the effect of keeping markets non-competitive, segregated and localised.”
Economist Sanjeev Sanyal highlighted the problem in his article, “The APMC system, meanwhile, forced farmers to sell their produce only through designated channels and mandis. The combination led to an inefficient regime of licenses, permits and inspectors. The drawbacks of the system were well documented over decades and many economists had argued for change. Some attempts were made to reform it piecemeal but the system had largely remained intact till now”
Then, Why Do the Political Parties Oppose?
So, if all the experts have for a long-time batted for a unified national market in agriculture, why do many politicians oppose this move?
While the opposition for the sake of opposition is also playing its role, it is also no secret that APMC administration has been a political playfield for a long time. More often than not, it is the card-holder of political parties who occupy and control the middlemen and traders in the agricultural market. Sample these headlines from media by themselves tell you the story of a political economy in the name of farmers welfare. A headline from Hindustan Times from this year’s January reads, Cong-NCP alter APMC election rules to regain control of cooperative sector, Another headline from Karnataka back in 2017 reads, JD(S) backed candidates win APMC election in Kolar.
Naturally, that the political fiefdom doesn’t want to lose control over the system and that explains the protest over this issue.
Glaring Hypocrisy of Congress
Congress in its 2019 general election manifesto has promised to repeal both APMC law and the Essential Commodity Act. The same Congress is now crying wolf when someone else did the much-needed reform.
This leaves us with the question- who is anti-farmer after all? Is it a government that is actually freeing farmers from the restrictions? Or is it them who are opposing this move and thereby not wanting freedom for farmers?