The forces behind the farm agitation in India
The farm protests or the kisan strike today has entered its 28th day. Congress leaders led by Rahul Gandhi have started a signature campaign against the new farm laws. Congress claims that it has already received around 20 million signatures. The same would be submitted to the President of India on Dec, 24. Some 40 farmer groups are undertaking farm protests against the laws on various Delhi borders. A UP based farmers group called Kisan Sangharsh Samiti has lent its support for the laws yesterday.
In September 2020, the Central Government tried to overhaul the agricultural sector with three agri-reforms. The stated aim was to reduce the continued exploitation of farmers by intermediaries and middlemen. Farmers, on the other hand are continuing farm protests against these new laws, claiming that these will destroy their livelihood. Whether the laws are for or against the farmers, let us delve deeper ourselves.
What are these new laws?
Bill on Agri-markets: Farmer’s Produce Trade and Commerce(Promotion and Facilitation) Bill, 2020
This Bill aims to give freedom to the farmers to sell outside APMC Mandis and promote barrier-free interstate trade. This is also aimed to create a facilitative framework for electronic trading as envisioned in the e-NAM project.
The grievance against this bill is mostly by state governments who will stand to lose a large part of revenue in the form of ‘mandi fees’. Fears remain that it may eventually bring an end to the much loved MSP based procurement system. The government has, however, clarified that the MSP as well as the mandi system will continue. Farmers will have the additional choice to sell outside mandis as well.
Bill on Contract Farming: The Farmer (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020
Under its provisions, farmers can enter into a contract with agribusiness companies to sell future farming produce at pre-agreed price and service conditions. It also lays down an effective dispute resolution mechanism with redressal timelines. Now the small and marginal farmers who stand to benefit from such a clause stand at around 86% of the total farmers in India. These farmers gain access to modern technology and farm inputs as well a price assurance for their crops.
The only opposition against this bill stems from the fear that farmers in any contract would be the weak players in terms of their ability to negotiate. Also, the land-owning farmers fear the loss of their land rights under the contract farming arrangement.
Bill on Agri-commodities: The Essential Commodities (Amendment) Bill, 2020
By removing many agri-commodities like cereals, pulses, oilseeds, onions, and potatoes from the list of essential commodities, this bill does away the imposition of stock holding limits. This provision will remove the fear of regulatory interference in business operations and bring price stability.
The grievance against this bill stems from the fear that big companies with large warehouses will still stock hold and have an unfair advantage. This fear is not far-fetched. Also, a recent announcement of export ban of onions raises doubts whether government is really ready to stop interference in the agricultural market.
Is it the farmers who are protesting?
As we have seen, all these three Bills aim to grant greater freedom to the farmers. They majorly benefit the small and marginal farmers who constitute the major chunk of our population. It is the middlemen (or ‘Arthiyas’) who stand to lose out in the process. Also, if we look closely, most of the provisions that the new laws state to bring, were already in place since 2017 through the Agricultural Produce and Livelihood Marketing (Promotion and Facilitation) Act. The grievance against weakening of Mandi system is not pan-India. Majority of agricultural marketing already happens outside the mandi-network. There are only 7,000 APMC markets operating across the country, mostly located in Punjab-Haryana belt. Bihar, Kerala and Manipur do not follow the APMC system at all.
Most of the slogans at the farmers’ rallies are aimed around the need to protect MSP regime, which they feel will be threatened by the new laws. Whether the MSP system actually benefits the farmers is a topic for another debate. In reality, only about 6% of farmers actually sell at MSP according to the 2015 Shanta Kumar Committee Report. Most of the protests are being led by rich and prosperous farmers of the Punjab-Haryana belt. This is the region from where more than half the government procurement of wheat and paddy takes place.
The concern raised by non-BJP state governments is that agriculture falls in the state list and Centre is trying to curb state rights. They are concerned about the loss of revenue which the 6% Mandi tax brings. The farmers here stand nothing to lose.
Thus we can clearly see that the new laws bring more good than harm to the farmers. Majority of the small and marginal farmers will enjoy greater freedom of market and price realisation for their produce. They do not form part of the disgruntled lot. It is the opposition state governments and few large farmers that are actually vociferous against the new Bills. Now it is not difficult to decide who is actually leading the farm agitation.