CHANDIGARH: Justifying Punjab’s changes to the APMC Act in the wake of the controversy over Centre’s new farm laws, state chief principal secretary to chief minister Suresh Kumar said the state laws came with caveats for the private buyers.
With the focus on the agriculture sector, Kumar also sought to defend Punjab’s power subsidy worth Rs 8,000 crore to the farmers, claiming that it goes to maintain food prices affordable.
“One of the demands of the farmers is that the amendments done by Punjab to the Agricultural Produce Market Committee (APMC) Act in 2017 should also be repealed. The amendments included allowing private market, allowing digital marketing, facilitating access to distant markets through e-NAM and creating commodity exchange,” he said while speaking at ‘Business and Policy Dialogue’ organised by the Indian School of Business (ISB).
“Punjab was one of the few states that did this with vetting by the Centre to facilitate alternate marketing options. These operations were started in 28 of the principal market yards in the state. The ITC buys 1 million of tonnes of rice, besides over 2.5 million tonnes of wheat is exported through digital trading, chill and kinnow are sold using electronic connections,” he added.
“But even though ITC and Pepsi have private markets, Punjab had added a caveat there. The difference in the legislation of 2017 and the 2020 laws is that even the private markets are fully regulated under Punjab’s Act. They (private buyers) have to comply with the transaction recording system with stocking and warehousing norms. We had finalised our rules and they also had to pay the mandi taxes. Globalisation does not mean that the state revenue has to be compromised. In GST, 5% of purchase tax has been withdrawn from Punjab, which is about Rs 5,000 crore and now 6% will go with the new laws (Rs 4,800 crore). The state’s capacity to raise revenue for development has to be maintained
Doubts about contract farming
Punjab already has Punjab Contract Farming Act, 2013. “It is under my signature as I was the agriculture production commissioner at that time. After that I was the chief settlement commissioner and there was not even a single contractrelated case registered in the office and even till today no case is registered. The new Contract Farming Act is a shade improvement as it has nothing to do with the land and whatever is grown as growing as per the conditions of the buyer,” he said.
“The apprehension of the farmers is that they won’t get contracted price paid if the market is down. Farmers want the minimum price paid to them. Punjab laws were based on land leasing. However, even the Central laws have a catch. The farmers say that the land is not leased but there is a recovery dispute on remuneration, it will be recovered as arrears of land revenue. The matter will be resolved under Punjab Land Revenue Act. If a recovery suit comes, the collector has the power to attach the land. If a big company has a dispute, they will bring in a whole battery of lawyers. The farmers are not foolish and understand this. They want the land attachment aspect removed,” he said.
Pb spends 10% on farm subsidies
Do the farming subsidies really benefit the farmers? “The farmer gets the MSP based on the actual cost, so there is no net benefit to the farmer because of the subsidy. The farmer is given cheaper insecticide, fertilisers because as a country we want to keep the prices of food affordable. It is actually a subsidy to the consumer and not the farmer,” he added.
“Rs 7,000 crore Punjab is paying by way of free electricity to the farmers, water is also free. This is not even counted by the Centre. The state is spending Rs 8,000 crore every year, which is 10% of the state’s budget. People keep asking so much of subsidy but farmers are still poor,” Kumar said.
There is the system of ‘markets of faith’ in practice without the Punjab Tenancy Act. There are no disputes and the culture has worked well by leasing to known people.
‘Not all is lost’
“All is not lost with the farm laws and this is what I keep repeating in my meetings with my colleagues. The only thing is that we need to engage with the farmers to get to know what their apprehensions are and try and resolve them,” said Kumar in reply to a question.
If you read the language of the Food Security Act, it says that the Centre shall procure food for the public distribution system through the state and central agencies. We are only saying just as that the foodgrains will be procured at a specified price and that assures the farmers the minimum support price (MSP),” he said.