Pro-Farmer or Pro-Corporate?
The Indian Government has worked hard on convincing the world that the farm bills introduced by them are a major step in reforming Indian agriculture. Even though they did not consult a single farming union across the country while preparing them.
From assurances of MSP to contract farming and everything else in between, the farmers say that these bills are pro-corporate and no pro-farmers, and will end up devastating their livelihoods while increasing the fortunes of already large corporates.
We break down the various claims made by the Government and help you identify the Myth from Reality.
The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act 2020, seeks to provide “competitive alternative trading channels” for the sale of agricultural produce and to promote “barrier free Interstate and intrastate trade”.
A farmer with small landholding in Bihar does not have the means or resources to take his harvest to a trader in Maharashtra, inter-state trade may benefit only the big farmers if at all.
In reality, this bill aims to create 2 separate and unequal markets, the government-run APMC being one of them. The private run market is exempt from taxes unlike the APMC, giving it a leg up in the business. This will lead to demolition of the APMC markets across the country.
APMC markets across Karnataka are already seeing nearly 60% of the trade move out of the APMC markets in just a few months since the introduction of the laws. This is also the reason why farmers from Bihar, where the APMC markets were abolished in 2006, work as field laborers in Punjab rather than the other way round.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, strangely leaves the farmer to negotiate a contract price with the sponsor.
The farmer is left to his own devices to negotiate aspects such as farm produce, produce price, quality, quantity, effects of pestilence, force majeure, food safety standards, labour to be employed. An average marginal farmer is ill-equipped to perform all these tasks.
There is no legally binding minimum support price guaranteed based on his input costs. The purchaser may refuse to buy his crop based on his arbitrary inspection. There is no provision for independent and fair inspection. This is likely to lead to distress selling.
The Essential Commodities Act
The Essential Commodities Act, 1955 was enacted to regulate the distribution and sale of essential commodities such as food items. Prior to the current amendment, items such as pulses, cereals, rice, onions were under its ambit.
The objective was to ensure procurement and sale at an appropriate price and ensure equitable distribution of food which was often subject to hoarding and black marketing.
The Essential Commodities (Amendment) Act, 2020 marks a huge departure from this, and takes the above mentioned food items out of the purview of the Act, allowing for a 100% increase in price for perishable items and a 50% increase for non-perishable items, overnight.
This gives purchasers the liberty to now hoard as much as they like without any restriction, thereby influencing market prices to the detriment of the ultimate consumer. This was indeed the very mischief the enactment sought to remedy in 1955.
Myth: The Farm bills do not get rid of MSP
Reality: MSP has no significance without procurement. Farmers are free to grow crops every year because APMC markets will purchase from them. The private market is not obligated to procure from farmers and neither is MSP made into law.
Myth: MSP has consistently increased in the last 5 years
Reality: There was a better and much sharper increase in MSP between 2006-7 to 2013/14 during the period of the UPA government. The year 2020 has seen the lowest increase in the last 10 years.
Myth: MSP is assured by the Government
Reality: Modi has offered "assurance" in Lok Sabha and Rajya Sabha Speeches, that the MSP will continue. The assurances are merely verbal and will not hold up in the court of law.
Myth: Are Amendments to the laws a solution?
Reality: Any amendments proposed still give the private markets an upper hand over the APMC Markets. This will still ensure the elimination of the APMC mandis in the future, thus leading to farmers falling into the hands of corporations with no remaining alternatives.
Legislation of Bills
Myth: The Government has passed the bills in democratic fashion for the benefit of farmers
Reality: The bills were introduced as emergency ordinances instead of standard legislation to avoid formal voting procedure. The BJP Government does not enjoy a majority in Rajya Sabha, the Upper House of Parliament.
Ordinances were introduced to the President by the Union (when Union is not in place) for "urgent/immediate issues" and passed with a "voice vote" (whichever side votes louder*) and not by actual voting (division voting), despite heavy protest by the opposition. These are undemocratic ways of making legislation.
*https://rajyasabha.nic.in/rsnew/practice_procedure/book19.asp - in case the voice vote is challenged, the speaker needs to count the voice votes or take an actual division vote
The Issue of Middleman
Myth: Middlemen will be removed from the process
The Government claims that farmers can sell their produce directly to anyone without interference from middlemen.
Reality: The ahrtiyas are NOT middlemen. They are licensed service providers who receive a fixed 2.5% commission. For that fee, they provide services, like loading/unloading crops, helping with auction, storing any grain after auction and maintaining the APMC Mandis.
Ahrtiyas are also a big source of informal loans to the farmers. Although they charge a high interest rate and the system needs to be remedied, they fill a critical gap in the farming process as not many institutions including banks prefer giving loans to farmers.
Myth: Farmers are currently forced to sell produce to middlemen
Reality: There has never been any law restricting farmers to sell crops in their own states or cities and to ahrtiyas only.
More than 86 per cent farmers in India own or cultivate on less than two acres of land and do not have resources to transport crops via trains or tractors to other states. This is only possible for private entities. And big corporations.
Reality: The Farmers “Empowerment and Protection” Act of 2020 will only add middlemen for the sale of produce by farmers.
Section 15 of the Act debars the jurisdiction of civil courts to look into any dispute; the farmer is left to the illusory right to seek legal determination of a dispute before the Sub-Divisional Magistrate (SDM) in the area where the private mandi is located.
Assuming, if a farmer in Haryana sells his produce at a private mandi in Amritsar, then in case of disputes he shall have to approach the mandi in Amritsar for redressal. SDMs form the backbone of the corruption process in India which private players will not hesitate to exploit for their benefit.
Myth: Abolishing APMC/Govt mandis is a good thing since farmers can sell their crop directly to private players.
Reality: Bihar, which abolished the APMC system in 2006, has the lowest farmer incomes across the country. A farmer with 10 acres of land in Bihar can be seen working as a laborer in Punjab for farmers with less than 5 acres of land even.
In a study of agriculture in Bihar last year, the National Council for Applied Economic Research found “Farmers are left to the mercy of traders who unscrupulously fix a lower price for agricultural produce that they buy from [them]. Inadequate market facilities and institutional arrangements are responsible for low price realization and instability in prices."
For maize they get 1000-1300 Rs instead of 1850 Rs (MSP)
For paddy they get 900 -1000 Rs instead of 1868 Rs (MSP)
For wheat they get 10-15% lower
Reality: Presently trade within the APMC mandi is taxable. Mandis charge rural development fee, market fee and the agent’s commission by the farmers. But with the reform for making sales anywhere to anyone, no taxes will be levied on trade outside the regulated mandis.
This in turn would entrap the farmers to sell in private mandis. Leading to an end of APMC mandis and zero govt regulation. After which the private companies will control the market prices.
Myth: Contract farming laws will not open farmers to exploitation
Reality: Contract farming laws have existed since 2013. Although on paper it sounds excellent for the farmer to get a contract upfront, there are lots of stipulations in the contract itself, which can allow the company to reject the crop, largely affecting the small farmers.
Also, the only legal recourse the farmers have is the district magistrate, not the courts. The inability to pursue legal justice is injustice in itself.
Andolan Jeevi: Who are the Protestors?
Myth #1: The protests are by terrorists, separatists and funded by anti-national agents
Myth #2: These protests are just restricted to a few groups of farmers in Punjab
Reality: Farmers from all across India have joined these protests. See below for reports on farmer protests from nearly a dozen states across India
Punjab, Haryana, Western UP, Karnataka, Tamil Nadu, Odisha, Kerala
Uttar Pradesh, Madhya Pradesh, Rajasthan, Uttarakhand, Bihar, Kerala
Karnataka - In Karnataka, the farmers held massive protests in Bengaluru and 29 other districts in the state between December 9 and 14, 2020, when the Karnataka Legislative Assembly was holding its monsoon session. Hundreds of farmers held protest marches almost everyday, demanding that the three farm laws be rolled back.
Reality: These laws will impact the common citizens, not just the farmers
Since staples such as grains and pulses are removed from the list of essential food items, they can be hoarded by the companies with immense resources and large warehouses. This will allow them to buy grains when cheap, and artificially increase the prices by hoarding and limited sales. Thus these bills impact not only the farmers, but also the common citizen and consumer.