By Tejaswi Ravinder
Hyderabad: When the Bengal famine struck the British India province in the mid-nineteenth century, over 3 million lives were lost. A group of researchers from IIT-Gandhinagar, University of California Los Angeles (UCLA) and the Indian Meteorological department Analyzed the weather and soil data for the past 150-years to reconstruct agricultural droughts.
Surprisingly, the results showed that there was no drought, rather the researchers cited policy failure as the main cause for the starvation and death of millions. The findings show that the then British government prioritized the distribution of food grains to the military, civil services and others and stopped the import of rice. Historians also observed that the large scale export of food grains from India during the Second World War led to shortage of food for the millions in Bengal province particularly, which was otherwise a self-sufficient producer of rice.
The absence of a state policy or legislation or the implementation of a bad law caused similar major catastrophes post-independence too. The Indian Constitution confers each state with the power to draft its own agriculture policy and the central government assists in its development and implementation. Urbanization had driven India to formulate policies suited for consumers in the urban market neglecting the farmers engaged in food production, resulting in non-profitability farming.
According to 2018 statistics, agriculture sector employs more than 50% of the total Indian workforce and contributes to at least 17% of the national GDP. However, every crop season, the small and marginal farmers start from the scratch availing loans from financial institutions or banks and fall into bad debts. Shockingly, in 2019 alone, at least 10,281 farmers committed suicide because of bad debts according to the NCRB.
To address the agriculture debt problem, the Indian government brought forth the Agricultural Debt Waiver and Debt Relief Scheme in 2008. Resultantly, the diminishing profitability in agriculture and the state’s policy failure led to a huge demand for loan waiver options which in turn shook the credit institutions causing economic instability.
As an alternative to the failing loan waiving schemes, Niti Aayog Strategy Document devised three key approaches to improve profitability in farming: 1, integration of technology to modernize farming; 2, creation of policies that encourage the participation of private sector in agriculture development; and 3, modern rural infrastructure and integrated value chain. The three controversial bills passed by the Lok Sabha recently resonate the same.
The proposed bills, Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill and Essential Commodities (Amendment) Bill received the President’s assent and are soon to become laws. The reactions from farmers’ community started in early September in the form of protests, a sit-in demonstration by Kisan Mazdoor Sangarsh Samiti in Punjab followed by rallies in Haryana, Rajasthan, Maharashtra, Telangana, Tamil Nadu, Uttar Pradesh, Uttarakhand, West Bengal and Kerala states.
The integration of private players—the corporate houses into Agriculture and the attempts to put an end to Mandi system voiced in the draft bills raised concerns among farmers as well as common public.
The Farmers’ Produce Trade and Commerce Bill aims to widen the agriculture market area by granting the freedom to conduct trade and commerce within and outside the state overriding the existing APMC Act (Agriculture Produce Market Committee) and declares the market free from the state-controlled Mandi system.
Further, it prescribes that the Central Government may step in to develop a price information and market intelligent system and also make rules for carrying out the provisions contained in the Act. The Bill seems to be specially designed to leave a vent open for the corporate giants to enter the Agriculture sector, and is clearly not considerate towards small and marginal farmers
A bare reading of the Act shows that bypassing the Mandi system, the current intermediaries would be replaced by few corporate bulk buyers. These new players are unknown to the farmers and the farmers concern is that the corporate bulk buyers would control the market and supply chain of the food industry. The perishable agricultural output must be sold at the earliest and the farmers would be at a bargaining disadvantage by dealing with the corporate buyers who are commercially suave.
Similarly, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill affirms the central government’s powers to issue directions to states to implement the provisions of this Act leaving no room for the state governments to have a say. This bill also says that Sponsors can enter into a contract/farming agreement with farmers to purchase the farm produce.
Moving forward, the price to be paid for the purchase of farm produce is to be determined by the parties and has to be mentioned in the farm agreement unlike the MSP [Minimum Support Price] fixed for farm produce. Having no MSP fixed and the contracting parties’ freedom to determine the prices will only expose the farmer to higher risks and no assurance. The provisions leave farmers vulnerable at the hands of the private players, who would have the advantage of getting their price quoted in the agreements. And, the linkage of credit instruments with farming agreements can potentially worsen the debt problem to the detriment of the farmers.
The Essential Commodities (Amendment) Bill restricts regulations on the supply of foodstuffs, cereals, pulses, oil seeds and oils to only extraordinary circumstances such as war, famine, extraordinary price rise and natural calamity of grave nature. It intends to open up a free market to allow the participants to trade freely without stock limits. Thus, the state fully withdraws its regulatory role to encourage the value chain participants to invest in agriculture. The supply and demand in the market would be under the control of these stockists.
The idea of welfare state for the farmers seems impossible with the handing over of the role of the APMCs to corporate players. The bills focus more on attracting the entry of private players into the agriculture market and less on uplifting small and marginal farmers, who hold 86 percent of the total land holdings as per 2015-2016 agriculture census. Besides costly inputs, unfavorable weather conditions, bad debts, the State’s policy to integrate farming industry with private investors, would force the farmers to function at the will of the third-party investors in the absence of proper regulation by government.
Clearly the new farm laws have a potential to have a disastrous effect on the farmers, I only hope that the policy makers will realise the glaring gaps in the law so that the farmers can be rescued from the impending perils.
(Tejaswi Ravinder is an Advocate practicing at the High Court of Telangana at Hyderabad.)