Farmer protests against the farm laws have gathered steam. Talks with the government have been deadlocked. Farmer unions are seeking a full repeal of the laws. The government's assurance on continuance of the Minimum Support Price (MSP) regime and a promise not to dismantle the APMCs (Agricultural Produce Market Committees) has failed to allay apprehensions, genuine or otherwise.

The government has been taken by surprise by the scale of the opposition. On the face of it, the three pieces of legislation by themselves have no apparent anti-farmer intent. The stated objective and the economic rationale of the laws are to provide farmers with choice and freedom to sell their produce and buyers to buy and store, thereby creating competition in agricultural markets. The government expects that the new marketing framework would help build more efficient value chains in agriculture, enable better price discovery, and improve farmers’ price realisation. The government has called these laws transformative for Indian agriculture and stated that these laws would free farmers from exploitative intermediaries' clutches.

Farmers misguided?

So, have the farmer groups just been misguided? Why have the protests been so vocal and strong, especially in Punjab? Why has the government assurance that there is no intent to do away with the MSP regime, not stopping the protest? Punjab (and Haryana) have, over the years, developed well-developed infrastructure at all mandis ; MSP procurement operations take place on a massive scale smoothly and efficiently.

So, naturally, any radical central move to change this system, built over several decades, would bring in resistance and apprehension that this could be the precursor to a liberalising regime to dismantle the MSP.

It is nobody’s case that the APMCs are transparent in their working or efficient in operations. However, farmers are not convinced that they would get a much better price by giving them a wider choice outside the APMCs.

Today, they contend with many arthiyas (commission agents); they are uncertain of what the future would bring if there are only a few large corporate buyers. Is there any way to bring an end to this deadlock? Is there a way forward that does not appear a full retreat by the government and farmer groups feel that they have won?

The constitutional underpinning of the APMC legislation is tenuous. Agriculture is a State subject under the Constitution. The Centre has widely interpreted its powers relating to production and supply and inter-State trade and commerce to bring in these legislation. There are two steps that the government can offer to break the impasse. First, in keeping with the Constitution’s spirit, the Centre can permit any State not to implement the laws it feels are not in its interest.

Punjab, Rajasthan, and Maharashtra have already declared the three pieces of legislation would not be implemented in their States. The Central government can offer to amend the Acts to provide that any State would have the freedom to implement the laws partially or not at all. Second, there is a need to alleviate the fear that APMCs would lose their authority and resource base if purchases outside mandis are freely permitted.

The Act could be amended to provide that purchases outside the APMC market yards would continue to attract the mandi cess; this is the present position in several States. These steps could bring an end to this deadlock.

States ruled by the BJP would then have the opportunity to demonstrate that the laws are beneficial to the farmer community and pressure the recalcitrant ones.

The writer is Chairman, National Collateral Management Services Ltd

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