By Michael Ani
Jalandhar, Sept 20, 2020: The Green Revolution of the 1970s had enabled the state of Punjab along with Haryana to produce the maximum food grains for the entire nation. The successive governments contributed much to build up the infrastructure for a well-organized Agriculture Produce Marketing Committee (APMC) that facilitated procurement of the produce of farmers.
Today, the Farmers in Punjab and Haryana are up in arms against the Centre’s agriculture-related Bills as they fear their enactment would be a step towards the abolition of the Minimum Support Price (MSP) regime and that could leave farmers vulnerable to possible exploitation at the hands of big corporate houses.
Why are farmers in Punjab and Haryana opposing the Bills?
The three Bills in question are The Famers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, the Farmers (Empowerment and Protection Agreement on Price Assurance and Farm Services Ordinance, 2020, and the Essential Commodities (Amendment) Ordinance, 2020.
“The three farm-related Bills, which are all set to become law after being passed in the ongoing session of Parliament, are anti-farmer. The one on essential commodities removes all cereals, pulses, oilseeds, potato and onion from trade restrictions and price control — this will ultimately benefit only the middlemen and traders.
Private players will buy the produce in harvest season, when prices are generally lower, and release it later when prices firm up. Small and marginal farmers will suffer the most as they depend immensely on the intermediaries to sell the produce,” says Jagmohan Singh, general secretary, Bharatiya Kisan Union in Punjab.
The apprehension of the people is that the BJP government, through the new bills, has given a free hand to private corporate houses to exploit the farmers. After the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, which aims to open up agricultural marketing outside notified ‘mandis’ for farmers, now private companies will establish private ‘mandis’ on which there will be no government regulation.
The ramification is that all state bonuses on MSP (Minimum Support Price) and purchase and other protections will be lost. “Companies will benefit as trading rates will not be under pressure of government procurement and they will be able to force farmers to reduce their rates.
While the Centre has stated that the creation of additional trade areas outside the mandis will improve the freedom of farmers to trade wherever they wish, protesters have stated that the provision will allow large corporates to enter and dominate the market at the cost of the common farmer.
Here are what the reforms in the farm sector entail and why have they angered farmers in India, especially in the Punjab:
1. The legislation seeks to free up agricultural trade from all restrictions.
2. It provides for opening up the farm sector to more competition, modernisation of supply chains by enabling bigger agribusinesses to engage with farmers more directly and creating seamless access to fragmented markets.
3. The Farming Produce Trade and Commerce (Promotion and Facilitation) Bill seeks to allow barrier-free inter-state and intra-state trade of primary agricultural commodities. Farm produce has been for decades sold mainly in notified wholesale markets run by Agricultural Produce Marketing Committees (APMCs).
4. The APMCs require farmers to only sell to licensed middlemen in these notified markets, usually in the same area where the farmers reside, rather than in open markets, which economists say scuttles price discovery, and hurt farm profits.
5. The Farming Produce Trade and Commerce (Promotion and Facilitation) Bill seeks to enable farmers and buyers of their produce to trade outside these tax-free markets and open up APMCs to competition. It will enable food traders to buy farmers’ produce from any market, rather than bind them to the specific markets where they are licensed to operate.
6. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill lays down a new architecture for contract farming. It provides for a national framework on farming agreements, enabling a farmer to engage with agribusiness firms, processors, wholesalers, exporters, or large retailers for the sale of future farming produce at a mutually pre-agreed price.
7. The legislation will allow the government to invoke the Essential Commodities Act only if retail prices rise 50% in case of non-perishables and 100% in the case of perishable items from the average retail prices in the preceding 12 months or last five years.
8. Opponents of the legislation have accused the government of intruding into states’ jurisdiction and taking advantage of the Covid pandemic to introduce the bills.
9. They say the legislation is going to lead to a replication of old structures outside mandis and create two market spaces with completely different sets of rules.
10. Farmers fear the legislation would lead to big monopolies and be as bad as the current cartelisation in mandis and also affect the procurement system.
11. The farmers want profitable sales in the form of minimum support prices (MSPs) to be a legal right. They fear the reforms threaten MSPs.
According to Tarsem Peter, a member of the Catholic community and President of the Pind Mazdoor Union Punjab who has been spear heading the agitation: “These three Bills are a first step towards elimination of the MSP regime, which are in line with the recommendations of the Shanta Kumar committee, which had also suggested dismantling the MSP structure. It’s clear that after implementing the recommendation on the Bills, now the discontinuation of the MSP would follow.”
And for Nirbhay Singh, president of the Kirti Kisan Union (Punjab), in the absence of any government security for farmers against possible manipulation, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, which creates a framework for contract farming through an agreement between a farmer and a buyer prior to production, would only result in exploitation of farmers. “Corporates will buy from farmer at cheap rates and sell at higher price to consumers,” he said.
The Protesters have noted that, by introducing the new bills, farmers’ ability to distinguish between trustworthy and untrustworthy traders becomes hugely diminished. Moreover, the waiving of a market fee on transactions in trade areas has also been met with ire, with farmers claiming that this will enable the advent of big corporates to enter, undercut market prices and effectively monopolise the industry. As such, experts have argued that while the reforms, that the Centre has stated have been welcomed by the majority of economists, may boost agricultural productivity, they may not exactly benefit the average farmer at all, and may, in fact, work to their detriment.
Punjab State Government passed a resolution against the Centre’s farm ordinances. The resolution was tabled by Chief Minister Amarinder Singh. The resolution termed these ordinances as anti-farmer and against the Minimum Support Price (MSP) regime. Highlights:
1. The ordinances were against the federal structure and the rights of the farmers.
2. The resolution is against: Farmers’ Produce Ordinance, 2020 Farmers Agreement on Price Assurance and Farm Services Ordinance, 2020 Essential Commodities Ordinance, 2020 Electricity Amendment Bill 2020
3. It is because, as per the Punjab State Government, Agriculture falls under List II of Constitution and hence falls under the State List. The ordinance promulgated by the Central government is a direct encroachment on the functions of the states.
Several farmers’ organisations, especially in Punjab and Haryana, have been protesting against the three bills, which have also been termed anti-farmer by the opposition as well as BJP ally SAD. The leading demand is that MSP be made a legal provision to assure a better price to farmers. The BKU, which is heading the protest in Punjab, is not against the laws per se but wants certain amendments to secure farmers’ interests.
“First, there should be a provision binding private traders not to buy farmers’ produce below the minimum support price (MSP) fixed by the government. Second, a maximum storage limit of food grains by traders must be fixed and third the mandi tax should be abolished for farmers,” Rakesh representing BKU said, adding that farmers were earlier also allowed to sell produce outside mandis.
In essence, what the farmers in India, especially in Punjab, are protesting is a new set of laws, the three bills, that the people believe will lead to monopolisation of their produce by large-scale buyers, hoarders, and corporates.
(Father Michael Ani is a senior priest of the Diocese of Jalandhar, who has been working in Punjab for more than four decades. He is currently the episcopal vicar for all commissions in the diocese. Earlier, he served as the rector of the major seminary in Jalandhar and vicar general of the diocese.)