Farm Acts Infirming the Farmers. What Next?

Prof Ujjwal K Chowdhury

The dice is thrown. The farm bills are acts now. There are at least ten challenges of these twin acts in the agrarian world of India. Here are they.

1. The Acts do not guarantee the Minimum Support Prices of farm produce in the agricultural mandis at the MS Swaminathan Committee recommended formula of input costs plus 50%. The Acts in effect will make the mandis and the MSPs infructuous as there will be no farmer travelling to the mandis incurring more expenses when corporates can acquire crops from them from site of production. This will be further accentuated by the fact the contract farming will close all options of the farmers to trade on their produce elsewhere. Worthwhile to note that BJP in 2014 election manifesto had promised the implementation of the MS Swaminathan Committee report.
2. In fact, they do not guarantee that the corporate procurements of produce from the farmers shall be at a higher rate than the MSPs, thereby keeping the small farmers at the mercy of large corporate houses. Decentralized agents-based procurement and mandi-based selling today, which also have many loopholes, will degenerate further into monopolistic corporate procurement where price negotiation will further disempower the farmers. During harvesting season, without any modern storage facility, the farmers are forced to sell their crops at the readily available prices, and prices usually crash in such situations.

3. Since cash crops (like cotton, jawar, mustard etc) give a far bigger profit margin than food crops (like paddy, wheat etc), the tendency of corporate houses indulging into contract farming and bulk buying shall be to produce and procure largely the cash crops. This is bound to create imbalance in food grains production, will give rise to famine, and render certain types of land inefficient for farming in the long run with income from such land going down. The case in point in the crisis that had emanated from the forced cultivation of Indigo by the imperialist British rulers in early 20^th century, leading to famine in eastern India.
4. The private corporate houses shall be procuring farm produce directly from small and marginal farmers, or bringing them into contract farming, as a consequence of these two Acts. Obviously, they are not for charity. The farmers eking out a mere subsistence level survival will never have the financial and legal resources of the corporate houses and are bound to gradually lose out.
5. These Acts are the death warrants of the APMC Mandis (Agricultural Produce Market Committee) all over India now which are the markets for all farm produce. By offering to buy directly from the farmers or bringing them under contract farming in pre-determined rates, the farmers will not use the mandis which will gradually close down. What was needed is a larger number of mandis closer to the farmers and an MSP with higher rates (inputs+50%), along with a strict implementation of the MSPs by the mandi managers. None of these were looked at and the interests of the large corporate houses upheld. If one to three largest corporate houses start procuring entire farm produce, the farmers will have no control over the prices of their produce ever again.Today, according to Shanta Kumar Committee Report, only six percent of the farmers in the country are able to sell their crop at the minimum support price set by the government in APMC mandis. The remaining 94% of the farmers sell their goods in the open market, often at lower costs, to various types of middlemen, called Arthiyas in North and Central India. It is because more than 40,000 mandis are needed in the country, out of which only 7,500 exist. Farmers are afraid that the new laws will worsen the situation by killing even these few mandis existing.

6. The Acts leave the storage, pricing and sell of the farm produce to the discretion of the corporate houses that procure them. This legalize hoarding of essential food materials, and creating artificial shortage in market to spike demand and prices thereby profits by the corporate houses. This is how through hoarding several times famine type situations had happened in India before and after the independence. It was hence made illegal which the acts in effect legalizes today. Famine, shortage, price hike, consumers’ interests violated are the outcome of such a policy.
7. Concept of perfect competition in open market which is being eloquently touted as the biggest reason to celebrate the new acts, and which has been repeated by the PM in his Mann Ki Baat, is a misnomer when you look at the unequal resources and power of the competing corporate houses interested in farm produce trade, between the farmers and the corporate entities, and between the dying Mandis and the aggressive corporate conglomerates.
8. The policy evolving through these acts is one of unsustainable environment as there will be undue emphasis on cash crops, as there will be massive hoarding of essential food crops, and as there will be artificial chemical means to increase productivity and show higher amount of crops produced from the same piece of land. This is an anti-ecology policy of the government.

9. Under the current open-ended procurement of rice and wheat, today Food Corporation of India (FCI) is bound to buy all paddy and wheat produce brought to the mandis by the farmers at the MSPs set by the government. However, such protection are not there in the new Acts, and hence, neither the farmers can get a minimum assured price, nor will there be assured procurement of the most essential food crops which can lead to breakdown of the food security regime of India.

Roadmap Ahead to Solve the Agrarian Crisis:

1. First MS Swaminathan Committee suggestions must be the cornerstone in tackling the agrarian crisis in India. Hence, fixing MSPs at input costs plus 50% more for at least 23 crops must be done and adhered to. The APMC Mandis which are below 8000 now, merely 20% of what India needs, must be constructed across India with Centra and State participation.
2. Punjab and Haryana have developed the road network massively for benefit of the farmers transporting their crops, have developed so far more than 3000 mandis and smaller markets, and the government and the farmers have also invested in tractors and trucks massively. Hence, these two states could develop as the rice and wheat bowl of India.Interestingly, the highest amount of farmers’ discontent after the new Acts has been in these states. Similar measures need to be taken in all other states. Some infra-structural growth in this regard is seen in Madhya Pradesh, Maharashtra, Tamil Nadu and Odisha. Rest provinces are lagging behind.
3. Farmers’ own cooperatives to develop transporting infrastructure like trucks etc need to encouraged and developed and insistence should be on selling their produce at the mandis based on the MSPs and not be at the mercy of big industrialists.

4. MSP was initially legislated to be in 23 crops, but usually done in rice, wheat, and some pulses, and not on others. The government must procure crops at MSPs if not sold in the open market, put in FCI, and ensure their quicker sale in the consumer markets after necessary processing.
5. The contracts with the corporate houses must be based on MSP of the moment and the formula to reach it, focus should be on food crops mainly, and hoarding of food crops should not be allowed to jack up the prices in the consumer market by the corporate hoarders.

(Author is a journalist turned media academician. Views are Personal)