The farm laws enacted by Parliament would soon become a hanging rope for farmers, because farming has not only become a fight against vagaries of nature but is also increasingly becoming a battle with governments. Despite being an agrarian country, when will the rulers understand that if agriculture goes wrong, nothing else will have a chance to go right? In spite of this rudimentary principle, why has the Union government enacted farm laws that are detrimental to farmers?
It is no rocket science to understand why the government has introduced these laws. Its innate objective is to facilitate corporates to capture the Rs 62-lakh-crore worth Indian food market. Agriculture accounts for 30-32% of India’s total trade. If the Union government is sensitive towards the farming community, instead of protecting farmers, why is it pitting 86% of small and marginal farmers against the mighty corporates? Will these poor farmers ever stand on an equal footing, leave alone having an upper-hand, against the mighty? Certainly not.
Minimum Support Price
The Minimum Support Price (MSP) is given to stabilise price environment and push agriculture production which, in turn, helps in ensuring food security in the country. Even though there is MSP for 23 crops, procurement at MSP is done only for paddy and wheat. There are demands and counter-demands for providing legal backing to MSP for all 23 agri-commodities. It is a genuine demand and the government has to accept this even if it defies economic logic, because MSP is an assurance to farmer, ensures threshold limit for his produce and prevents distress sale.
One can ask whether MSP makes a difference to farmer. Let me give an example. If you look at the market price of paddy during the last five seasons, it is less than the MSP. It means, if the States procure paddy at MSP, the market price will converge with MSP and farmers will never resort to distress sale. MSP becomes all the more important to States like Telangana, which procures almost entire paddy from farmers by giving more than the MSP. But media reports state that the Union government has issued a directive that if any State buys paddy at more than the MSP (Rs 1,888), then the Food Corporation of India (FCI) will not procure grains.
Not just this, Telangana is one of the top three cotton-producing States in the country, quality of cotton in Telangana is considered the best and it has a great demand in the international market. Initially, the Cotton Corporation of India (CCI) agreed to procure cotton from farmers for this season. But a couple of days ago, the CCI gave an order that farmers have to bring one of their relatives to the procurement centre along with them for selling their cotton! This condition appears to be weird. Here, the objective of the CCI is to discourage farmers – every farmer cannot bring his relative to market yard – to sell his produce at MSP.
Secondly, the Government is not giving the MSP recommended by the Dr Swaminathan Commission, instead is giving only 50% of it. And even that is not given to farmers in its true sense for it has no legal backing. Thirdly, the BJP manifesto said that if it comes to power, it will ensure farmers get 50% more than the production cost. So, why did the BJP government not include this in the Farmers Agreement on Price Act enacted in the Monsoon Session?
R3 in Telangana
Telangana, under the leadership of Chief Minister K Chandrashekhara Rao, is galloping in agriculture. Before the formation of the State, paddy was irrigated in 20-25 lakh acres. Now, it has gone up to 1.03 crore acres annually and once Phase-III of Kaleshwaram is completed, production of paddy will go up to 1 crore acres in each season. So, if MSP is diluted or junked, States like Telangana, Punjab, Haryana, MP, Chhattisgarh and UP, which are aggressively procuring at MSP and helping farmers, would be at the receiving end.
Telangana is implementing R3– Rythu Bandhu, Rythu Bima and Regulated Farming. Under these, a farmer is given Rs 10,000 under Rythu Bandhu as input subsidy; insurance is provided to her produce under Rythu Bima; and farming is regulated through intervention by agriculture scientists and extension services as to which crop is to be sown for better price realisation. Telangana also provides 24-hour power, water supply for irrigation, storage facilities, including cold storage, and systematic procurement process.
The Chief Minister is also thinking of creating a corporation so that right from sowing to selling of farm produce is taken care of by this corporation. This will assure the farmers about the amount that they are going to get for their produce right before sowing, rather than leaving them at the mercy of big corporates.
APMCs
The second contentious issue is about Agricultural Produce Market Committees (APMCs). On one hand, the Farmers’ Produce Trade and Commerce Act indicates that APMCs would not be disturbed. On the other, this Act creates new markets, such as ‘farm gates’, ‘factory premises’, ‘warehouses’, ‘silos’, ‘online platforms’ and ‘cold storages’, and farmers are free to sell their produce through these platforms. The Act also restricts States from imposing any market fee/cess or levy on farmers or traders or electronic trading platforms or Farmer Producer Organisations. This means now there are two markets – APMCs where States impose development or mandi fee/tax/cess to provide them infrastructure and expansion and the other platforms where you have no levy at all! Through this, we are not creating a level-playing field; rather, we are creating two markets for buying the same commodities but only one of them levies tax.
So, trade will obviously shift to the one without tax. Secondly, there is no guarantee that corporate or big private players or multinationals would buy from our farmers if the price is more than the global price. But this is not the case with APMCs. So, the prudent approach would be to keep both on a similar platform, so that farmers will have two options to sell their produce.
Price Assurance
Another contentious issue relates to Farmers Agreement on Price Assurance Act. The Act says that there can be an agreement between farmer and buyer who may be a corporate entity or multinational company or private party. The agreement would be for a maximum of five years. Then what will happen is: the company uses farmer’s land extensively for five years by using maximum chemicals, fertilizers and pesticides for more production since it needs to earn maximum profit from that land in the five years. After five years, the land will become unproductive. So, where the farmer will go?
Finally, it is obnoxious on the part of the government that it is treating ‘agriculture’ as ‘trade!’ It means, the government is treating farmers as ‘traders’ and not as ‘agriculturists’ who sell their produce for a better price in the market. How is it justified that right from sowing, field preparation and cultivation you are treating it as a farming activity and the moment farmer cuts his produce and takes it to mandi for sale, he becomes a trader? Selling produce at mandi by farmers is as much an ‘agricultural’ activity as production in the field. And, ‘trade’ begins only after the farmer sells her/his produce in mandi or anywhere s/he wants. The government is within its right under Entry 33 of the Concurrent List to make laws, even if they override State laws – APMC Acts in this case – to carry out inter and intra-State trade and commerce after APMCs, etc, procure farm produce from farmers, not before that.
The Union government needs to call for a Special Session of Parliament to discuss these black farm Acts threadbare, make amendments in favour of farmers or repeal them altogether.
(The author is Member, Lok Sabha [Chevella], Telangana)
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