After the CAA protests, now the centre government is facing yet another major backlash. The new farm ordinances promulgated in June this year, have not gone well with the farming community, especially of Punjab and Haryana. The reforms in the agricultural markets include deregulation of farm foods from the Essential Commodities Act (ECA). Farmers are also allowed to sell their produce to the government regulated market yards (mandis) or Agricultural Produce Market Committees (APMCs), as well as to private firms outside this set up. They have also been allowed to enter into farming contracts. The government says that these bills have rid the farmers from the shackles of middleman, increased the profit margins for them, increased their bargaining power and hence a freer trade. However, the farming community refuses to accept these as pro farmer legislations and they have strong arguments to make which should not be overlooked.
The farming community believes that with the coming of private players it will be difficult to hold them accountable for any malpractice or harassment. The eventual phasing out of the Minimum Support Price (MSP) will take away the farmers safety net and the farmers already have many issues to tackle with from depleting water levels, rising input costs for farming and debts. Least government involvement in the entire process of crop procurement will snub the small and marginal farmer decreasing their bargaining power instead of increasing it. The parallel mandi system that has been allowed to be carried out along with the entry of agribusiness firms will become redundant over a period of time – handing the baton finally to the big corporations. It is to be pointed out here that although the government claims that it is trying to help the farmers by ridding them of the monopoly of APMCs, the farming community has never been entirely against the APMCs work ecosystem in the first place. Many farmers are hugely dependent on artiya system (government licensed commission agents which gives them credibility with the farmers) for loans and smooth functioning of their daily lives. Even the banks could not provide as healthy an alternative to the farmers. Secondly and more importantly if the government could assure the provision of MSP in the legislation itself, they would not have faced such protests. The problem is not the private player but the lack of legal binding of MSP in the new bill.
Here is a deeper analysis.
Small Threat v/s Big Threat
It cannot be denied that traditionally farmers have faced some problems at the hands of APMCs. However, the farmers have a collective strength as the government is answerable to them locally and nationally, which makes sure that APMCs never overreach themselves. Hence, it is a smaller threat to their progress. On the other hand, with big corporations coming in and no government involvement, the farmers will have no backup. A mutual agreement can only take place or rather hold its place if all the parties involved can exercise their strengths equally. With no strong protective measures from their democratically elected government, the farmers will definitely have a bigger threat from these corporations who have the financial power and the digital behavioral data of millions of people. Till date the American government could not completely round off Facebook founder Mark Zuckerberg for his mega company’s data malpractices that have impacted daily life and electoral decisions of people around the globe. How will the simple farmers ever round up private players and big corporations in case of any injustice?
One size does not fit all
Punjab and Haryana are states where the agitation against the new reforms is the most severe since they have higher contribution in filling the food security pool of India. Therefore the legislation needs to be flexible in its application. 34 % of wheat and 22% of rice is contributed to the nation by Punjab alone. The Punjab government too collects handsome mandi tax which is also outside the GST. This tax helps create and maintain robust infrastructure like roads connecting rural areas, mandi infrastructures, etc. It is used for the welfare of people and hence should not be done away with. By removing the fee on trade and excluding the mandis from the definition of trade areas the government is clearly incentivizing the traders. Earlier the traders came to a defined and well allocated area for trade with the farmers. Now a marginal farmer is expected to carry around huge quantities of produce directly to various bases of traders. This new provision is unviable for the farmers of Punjab and Haryana. This predicament is not as strongly applicable to other states as they have a weak APMC structure. In Bihar not even 1% of targeted wheat procurement happened at MSP in this past rabi season which ended in April this year. The overall contribution of the state in terms of produce is also lesser than Punjab and Haryana. Therefore, entry of a private player might be a good alternative in this state. Yet, without government back up or intervention no trader or private company will give a decent price for the hard labour of a farmer even in these states. The main point to be taken here is that one size or one approach does not fit all.
Why rush it through?
The APMC structure came to fore legally in 1956 in the face of famine in order to check unlawful trading. The system evolved to accommodate the changed circumstances of farmers over the years. Now when it has become an integral part of many state economies, where is the need to suddenly overturn it without a proper dialogue with the stakeholders? Why ram it through with these bills in the already troubling time of coronavirus pandemic? There was no need to issue an ordinance. Normally these ordinances are issued only as an emergency law. These have to be converted into legislation as soon as the parliament reconvenes. More importantly it needs to be highlighted that any law related to agriculture, agriculture processing and marketing is not even a subject of Union list. It is constitutionally a State subject.
The government is free to introduce reforms for the betterment of its people. Precisely, it is for this very reason the elected representatives have been sent to parliament by the people. But firstly, where is the emergency? To do it behind the façade of a pandemic is not the right way ethically and morally. Secondly, does it hint at something else too? Internationally, a new business climate is trying to emerge from the moribund economy due to the ongoing pandemic. There is a visible monopolistic behavior on the rise, with supersized deals taking place between various corporate giants who have strong access to capital market. The recent deals to boost Jio ecosystem is one such case in point. The accelerated digital transformation for these bigger corporations in turn primarily means enhanced “surveillance capitalism” making the governments across the globe more in sync with such deals since they can become the biggest buyers of this surveillance data, giving a more potential rise to ‘Cambridge Analytica’ like case. In times like this, when a new dangerous world wave is emerging do we really want private players to come in.
Even if it is just hysteria, why risk crushing the Anndatta by passing such ordinances in such a hush which might weaken the economy of states, and who knows…might also become entry point for a new East India company!