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Friday, April 16, 2021

Why is the Farm Bill causing havoc in India’s agricultural sector?

Farmers in India have been protesting. They have set September 25 as the day of an all-India protest. This comes after the Modi government introduced and then passed two Farmer’s Bills in the Parliament.

Though the government and the Prime Minister himself tried to explain why this is a ‘farmer-friendly’ bill, farmers themselves were not convinced. What really is the Farm Bill, and why is it causing havoc in the Indian agricultural sector?

The agricultural sector is the only sector that had prevented the Indian economy to crash worse than it did. The decline in GDP contraction would have been much more severe if the agricultural sector was not there to save us. The sector, even in normal times, accounts for a huge chunk of our State income or what you popularly call GDP. The Modi government went ahead and opened the agricultural market to the world. Now the farmers will not have middlemen but will also not have the protection of the MSP. This, many suspect, will lead to more polarization in terms of income as the big businesses and corporates will enter the market. But how bad is it really?


Know the Farm Bills

Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 were passed on the floors of the Lok Sabha and the Rajya Sabha. The latter aims “to provide for a national framework on farming agreements that protects and empowers farmers to engage with agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce at a mutually agreed remunerative price framework in a fair and transparent manner and for matters connected therewith or incidental thereto”.

Prime Minister Narendra Modi has called it historic and accused the opposition of standing against it as they feared they would lose control, “After these historic changes in the agriculture sector, after such a big system change, some people say that it is slipping out of their grip. So now these people are trying to mislead farmers on MSP (Minimum Support Price),” he said. “These are the same people who kept sitting for years under the recommendations of the Swaminathan Committee on MSP,” he added.

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, on the other hand, allows both intra-state and inter-state trade of whatever the farmers produce thus expanding the horizons of the markets beyond the physical premises of Agricultural Produce Market Committee (APMC) markets. State governments will not be able to levy any taxes or cess on activities.

“A farmer may enter into a written farming agreement in respect of any farming produce and such agreement may provide for — (a) the terms and conditions for the supply of such products, including the time of supply, quality, grade, standards, price and such other matters; and (b) the terms related to supply of farm services: Provided that the responsibility for the compliance of any legal requirement for providing such farm services shall be with the Sponsor or the farm service provider, as the case may be,” read the bill. “No farming agreement shall be entered into by a farmer under this section in derogation of any rights of a sharecropper. The minimum period of the farming agreement shall be for one crop season or one production cycle of livestock, as the case may be, and the maximum period shall be five years,” it further read.


The one that went past early

There was another bill that was passed a few days ago, the Essential Commodities (Amendment) Bill, 2020. This will allow the central government to govern the supply of certain food items only under extremely extraordinary circumstances. There might even be limitations on the amount of stock any farmer can keep, but this will come only if there is a steep increase in prices.

The ultimate aim of these three bills were to make the open up the agricultural market and make it competitive. The general idea is that this will make it a corporate’s game a all the big players will hog the space. The bills aim to get more buyers for farmers’ agricultural produce. But how will they do it? The government says, simply by allowing free trade in a market where there will be no license or stock limit. How does this help? In this system, ideally, an increase in the level of competition due to the farmers of similar ability. This will yield better prices for farmers, said the government. “The three bills aim to liberalise trade and increase the number of buyers, de-regulation alone may not be sufficient t'[ls are supposed to be the helping hand for those small farmers who don’t have the capacity to bargain and get better prices for their products neither do they have the option of using the hi-tech innovation which are supposedly revolutionised agriculture. The bill on the Agri market looks to permit farmers to sell their produce outside APMC ‘mandis’ to whoever they want to. The farmers, big and small, will show signs of improvement in costs through competition and cost-cutting on transportation. Notwithstanding, these bills could mean that states will lose ‘commissions’ and ‘mandi fees’.The enactment on contract cultivating will permit the farmers to go into an agreement with agri-business firms or corporate firms and retailers on pre-determined costs of their produce. The Essential Commodities (Amendment) Bill, 2020, tries to eliminate products like grains, pulses, oilseeds, eatable oils, onion and potatoes from the rundown of basic items.

Even though the government has repeatedly said that this will help the farmers and that the ‘mandi’ system and its price structures will not be done away with for a considerable time, the protesting farmers feel that their livelihood is under attack by the corporates. the opposition too has not left this opportunity to slam the Modi government. Congress leader Gaurav Gogoi told the Parliament that this has been a long-term plan of the government to acquire the lands of the poor so as to benefit the corporates with who, he alleged they are in bed with to ‘sell the country’. “This government has been eyeing, how they can take the farmers’ land to benefit their capitalist friends, whether is the Land Acquisition Act, whether in the industrial system through weakening the labour courts and now this three-pronged attack on the Indian agricultural system through the two bills on farming – one related to APMC, the other one is related to contract farming and the third bill which is on essential commodities… a three-pronged attack on the Indian farmers,” he said.


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