The government of India has introduced three agriculture bills with an aim to double the income of Indian farmers. But there is a nationwide uproar against the Farm Bill 2020. Farmers from different parts of the country are opposing the ‘historic’ Farm Bill 2020. Let’s know All About Farm Bill 2020 Protest, Pros and Cons.
The Parliament has passed three agriculture bills:
- The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020
- The Essential Commodities (Amendment) Bill, 2020.
Origin of Farm Bill 2020 Protest
‘Bhartya Kisan Union‘, All India Kisan Sangharsh Coordination Committee (AIKSCC) and some other farmer unions asked for permission from the Harayana government in order to conduct a peaceful protest or a rally but on 10 September. The Haryana government denied the plea of rally citing the crisis of COVID-19. But the farmers started their rally with more than 100 tractors on the road with the slogan ‘Kiasn Bachao, Mandi Bachao‘. Many people called this protest as ‘Tractor Protest‘ also. At some places peaceful protest became violent and police had to lathi-charge the kisans.
India’s small and marginal farmers have been struggling with acute poverty due to the multilayered problems and strictly controlled agriculture sector. The agricultural market was entirely controlled by money lenders and traders since independence.
The farmers were being exploited by these money lenders and traders while selling goods in the market. The government introduced APMC (Agriculture Produce Market Committee) to solve the problem.
How does APMC work?
Agriculture is a state subject that is why every state has its own APMC network. The state divides APMC area depending upon the state’s volume. A trader needs to acquire the license to operate in a particular Mandi or APMC. Similarly, farmers are only allowed to sell their agriculture goods in regional Mandis only.
There are many middlemen between farmers and traders in the existing APMC process.
First, the farmers will visit Mandis where the MSP or price discovery will be done through auction. Then the goods will be taken to traders through commission agents or arthians. Then comes transaction agents who inform the farmers about the sold price. The transaction agents charge market fees from the farmers. The whole process is full of corruption. Thus the existing APMC system can not save farmers from being exploited.
Then the Indian government brought the MSP or Minimum Support Price.
Minimum Support Price (MSP) was envisioned as a powerful instrument in stabilizing the economy. But at ground level, the reality of poor management of MSP concept is quite visible.
Drawbacks of APMC (Agriculture Produce Market Committee)
APMC Act was enacted by almost all the states during the 1960s or later to bring transparency in Agricultural Marketing in India. This was a small part of the overall food security in the country, remunerative prices to farmers, and fair prices to consumers. However vision the APMC was not a complete success.
- APMC acts basically divided the Agriculture market in India geographically.
- APMC gave rise to a complex system as it is applicable to ‘notified agricultural products’ which varies from state to state.
- Mandi uses commissions agents or arthians who started the license raj system.
- Only closest to state governments are able to get the license of traders and commission agents.
- Too many middlemen increase the goods price and lots of goods are wasted in the process.
For example, a good of 5 rupees is sold at 50 rupees to consumers and the rest amount gets divided among all the middlemen.
Ministry of Agriculture published a report in 2012-13, which revealed that the majority of small and marginal farmers were being done by the farmers to the non-APMC traders and not in the APMC. So, MSP is an irrelevant concept here.
Now let’s move focus to the Farm Bill 2020.
- The Farmers Produce trade and Commerce (Promotion and Facilitation) Bill allows restriction-free intra and inter-state trade of farm produce.
- So the new Farm Bill 2020 proposed that it will give freedom of choice to the farmers. They can sell it freely across the nation without bringing into APMCs.
- The new farm bill 2020 empowers the farmers to bypass the middlemen to sell all the agriculture produce directly to institutional buyers.
- The proposed farm bill formulates a standard framework on the agreements that would help farmers to involve with agri-business companies, retailers, exporters directly while the small and marginal farmer will have access to modern technology.
- The farmers’ groups are worried as they think the new farm bill 2020 will expose them to corporates who have more bargaining power and resources than small or marginal farmers.
- Indian farmers will be allowed to sell their goods at the best possible prices across India. This apparently sounds good. But look at the reality.
- The existing APMC system has created a monopoly and the newly proposed policy is not removing the theory of monopoly either. There is even more probability of an ecosystem of monopoly under the big corporate institutions.
What Are The Farmers Demanding?
- To roll back these ordinances.
- To protect the existing APMC mandi system.
- To clear the loans of the farmers.
- A law should be enacted for MSP to be at least 50% more than the weighted average cost of production and if the MSP is not paid, it should be a punishable crime.
- A law should be put in place that guarantees payment from the buyers through middlemen that have always jar been the norm to ensure that banks don’t deduct the money in the name of loan recovery.
Agriculture is a state subject, then how can the central government enact a law on agriculture?
There are three lists in the 7th Schedule of the Indian constitution.
- List I contains the areas where the center can enact laws
- List II contains the areas where the state can enact laws
- List III or concurrent list contains the areas where both the center and state can enact laws
Agriculture comes under List II of the 7th Schedule.
But here we should refer Article 249 which empowers the parliament to legislate with respect to a matter in the State List in the national interest. There is one more reference of entry 33 of List III which gives power to the center to enact laws on Agriculture.
- APMC will remove the entire middlemen structure hence the chain system under the corporates closest to state governments will get hurt.
- State governments impose taxes on APMC or mandis to collect revenue. The new system is going to hurt that tax collection mechanism under the individual states.
- The Farm Bill 2020 proposes to run a parallel APMC network, hence the state government’s control will entirely be lost of existing APMC system.
We came across the enormous negative impact of COVID-19 in the first quarter of 2020-2021. The agricultural sector and allied activities are the only sectors that grew by 3.4%, while the country’s economic contraction was figured at 23.9%.
So, the sector which feeds the nation is in distress. The farmer’s agony will never bring positive growth unless the government addresses the whole situation on an urgent basis. Here are some solutions, the government can work upon.
- India should definitely invest more in Agriculture sector. About 70% of rural households depend entirely on agriculture and associated allied activities and 86% of India’s farmers are categorized as small and marginal. The agriculture sector is the primary sector, if it is given a boost it will definitely spread the positive chain reaction to the Indian economy.
- The Farm Bill 2020 proposes a good intention but had multiple flaws. Certain amendments should be made to the Bills in order to protect Indian farmers. The government should consider what the farmers are demanding. The governments do listen to corporates, Bollywood celebrities, Cricketers, but why not farmers? Why does the government never talk about the liberty and interests of farmers?
- The LPG ideology or the ideology of Liberalization, Privatization, or Globalization came into light in 1991. ‘Neo-liberalism’ or ‘liberalism ‘ is an ideology that supports the concept of the free market. The free Market basically refers to a market with zero interference of the government in the business sector. The Indian government also adopted the ideology to create a free economy at that time. Similarly, the agriculture market should be made free. The government should restrict its control over the agriculture market.
- As it is previously stated in the article that only 6% of Indian farmers get the benefit of Minimum Support Price (MSP). It is the lack of awareness among the farmers. Proper initiatives should be taken to educate and empower farmers.
The above data clearly shows the epitome of the sufferings of Indian farmers and the height of mismanagement of existing agricultural policy. Hence the reform is essential.
As far as the reform is the primary concern, the government should focus on solving the existing problems of the Indian agriculture market before implementing a new one.
–John E Kennedy
The article is aimed at giving a transparent view of the ongoing agitation of the farmers against the new Farm Bill 2020 along with addressing the agricultural marketing problems.