Opinion

Repeal of farm laws will hurt farmers

Updated on: Nov 29, 2021
Jalandhar: Farmers thrash rice paddy at a field, in Jalandhar, Friday, Oct. 2, 2020. (PTI Photo)(PTI02-10-2020_000240B)

Jalandhar: Farmers thrash rice paddy at a field, in Jalandhar, Friday, Oct. 2, 2020. (PTI Photo)(PTI02-10-2020_000240B)

MOHALI, PUNJAB, 12/06/2020: Farm workers from Sitamarhi, Bihar, who arrived in a chartered bus on persuasion of farmer, busy working in paddy fields transplanting the seedlings at Deh Kalan village in the outskirts of Mohali on June 12 2020. Farm sector is reeling with severe scarcity of manpower after the migration of labourers to their native places. Photo: Akhilesh Kumar

MOHALI, PUNJAB, 12/06/2020: Farm workers from Sitamarhi, Bihar, who arrived in a chartered bus on persuasion of farmer, busy working in paddy fields transplanting the seedlings at Deh Kalan village in the outskirts of Mohali on June 12 2020. Farm sector is reeling with severe scarcity of manpower after the migration of labourers to their native places. Photo: Akhilesh Kumar

Small farmers will not be able to shrug off the hold of middlemen, and malpractices are unlikely to be arrested

The decision of the Central Government to withdraw the three farm laws was quite unexpected. This will put the 126 million small and medium farmers at the mercy of market sharks. The farmers’ agitation over the last one year made the government yield to their demands.

The pretentious leaders whose interests are tied with the rich trading lobby have steered the fate of these 126 million farmers into hands of ruthless traders; the 13 million kulaks (prosperous peasants) and trading double-dealers are the ones who will benefit.

Withdrawal of the Acts will inhibit the farmers from selling anywhere in the country, and instead force them to sell only to the rich mandi agents. In this context, a case decided by the Punjab and Haryana High Court comes to mind, wherein farmers from Punjab were arrested for selling their wheat in Rajasthan. Therefore, restrictions and malpractices will be back. Was this the outcome the kulak lobby wanted?

The traders’ lobby spread many myths about the farm laws, including one that farmers will be compelled to sell only to two corporates. Can this really be the case in a democratic country like India? Will the withdrawal of the laws ensure these or any other corporate not buying from the middlemen? Or is this the design with which kulaks continue to dupe the poor farmers and sell the produce to the corporates? Now, all the State governments will be back with cess and market fees. Is this what the poor farmers needed? It is well-known that these market charges are cut from the farmers’ dues by the traders.

Under the farm law, all traders were required to give PAN numbers. Now, with its the repeal, the trader is free to have unrecorded purchases and flourish at the cost of the farmers. Was this the aim of the entire agitation? Under the Act, the payment to the farmer will have to be made within three days of the purchase.

But once the Act goes, payments to the farmers will be made at the discretion of the traders. Was this the real agenda?

The law provided a quick dispute-settlement mechanism within the trade area, but the kulak lobby wanted disputes to be taken to courts where a case may go on up to 5-10 years. This means the poor farmers will have to hang around civil courts or settle the disputes by taking bullets on the chest; this happened inside the APMC (Agricultural Produce Market Committee) market of Sira in Tumkur.

Long-time demand

The farm laws were not unexpected. There is a long history of reforms in the agricultural marketing sector that began with the High-Power Committee in 1992, the Working Group of the 12th Plan, the SS Acharya Committee under UPA, the Model APMC Act of 2003 which was modified in 2007, the Committee of the Agricultural Ministers of the States 2011, the Gokul Pattnaik Report 2011 and, finally, the High Power Committee of Chief Ministers.

Most of the study groups indicated removing the market imperfections in APMC. On these lines, the first Act provides free intra-State and inter-State trading of produce; recognises only traders with PAN; does not allow payments to be delayed beyond three days; levies no market fees, cess or any other charges; and puts in place a dispute resolution mechanism.

The second law promises contract farming with a fully secured safety net for farmers. Farmer and sponsor may enter into an agreement as per their agreed clauses. The law prohibits any leasing or transfer of land of the farmer.

The third Act is about controlling speculation to get hedging advantages, and has two triggers of price difference — 100 per cent rise in price in the case of perishables, and 50 per cent rise in the case of grains, etc.

What is wrong with these Acts?

Farmers are certainly incentivised through MSP (minimum support price) to grow certain crops. But the scheme functions only in Punjab, Haryana, Rajasthan Madhya Pradesh and Uttar Pradesh.

For instance, these five States’ procurement of wheat was 30.807 million tonnes (mt) in 2017-18 as against the total procurement of 30.824 mt in the country. More than 90 per cent of the total procurement budget is absorbed by these five States.

In paddy too, Punjab and Haryana together accounted for close to 40 per cent of the total procurement. The skewed marketing process has led to the development of strong links between the “operators and the clients”; the procurement is plagued with corruption in grading and weighing. Freedom to sell is a farmer’s basic right established by this law. Similarly, storage and stocking of grains to a certain limit are also important for making the commodity available in the market at the time of emergency. The law brings control on the stocks based on price triggers.

Contract farming has always been present and up to now it has been unprotected where the contractors had the upper-hand on the farmers. The law provides protection against land alienation and the terms of contract include arbitration by an independent agency.

Missed opportunity

The Centre has been denied the opportunity to enhance the welfare of millions poor farmers by the ruthless kulaks . When the farmers had come to the table for talks, the negotiators at that time should have suggested that the Central government issues an advisory to all the States that the farm laws passed be discussed in the State Assemblies and take appropriate decisions about implementation. Similarly, it is time the entire MSP operation becomes a joint obligation of both the Centre and the States in terms of implementation and financial responsibility. If the States are really serious about protecting their farmers, why are they not procuring crops from them?

Also, the Centre could have made a nationwide survey to understand the pulse of the farmers on the laws before repealing them.

The withdrawal of the Acts has stalled the move towards liberal market-centralism. While the missed opportunity certainly goes against the poor farmers, it will help those with clout in mandis and APMCs. The chance given to the resource-poor 126 million farmers to get ahead economically has been snatched by a few disgruntled elements for their self-interest.

Deshpande is former Director, Institute for Social and Economic Change, Bengaluru, and Narayanamoorthy is former full-time Member (Official), CACP, New Delhi. The views are personal

Published on November 29, 2021

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