Modi’s three farm bills are definitely pro-farmer
Doubts and apprehensions are being created in the minds of farmers by vested interest groups and some political parties, mainly the Congress, over three farm bills passed by Parliament this week. While some farmers’ organizations have given a call for ‘Bharat Bandh’ on February 25, several political parties and their farmers’ wings have already launched protests in different states. Shiromani Akali Dal, an ally of BJP in NDA, has opposed the bills and its minister Harsimrat Kaur Badal has resigned from the cabinet.
On Friday, Prime Minister Narendra Modi lashed out at the opposition, particularly the Congress, for misleading farmers about the three farm bills. Launching several projects in poll-bound Bihar through video conferencing, Modi described the measure as “historic” and alleged that so-called farmers’ protests have been engineered by “middlemen”, whose business interests will be hurt.
He told farmers not to listen to baseless rumours being floated by middlemen, and support these bills because it will enhance their earnings will the elimination of middlemen.
The Prime Minister assured farmers that Minimum Support Price procurement of wheat, rice and other farm produces will continue and agricultural marketing bodies (Krishi mandi) will not be abolished. Modi said, the three farm bills will liberate farmers from many restrictions imposed over the years in the last seven decades.
“There are parties who have ruled the country for decades and are now trying to misguide the farmers. These parties had promised these measures in their manifestos during the last election, but now that the NDA has done it, they are opposing it”, Modi said.
Let us examine the three bills one by one. Firstly, Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill will create an eco-system where a farmer can sell his produce anywhere in India. Inter-state and intra-state trading, even electronic trading, will be allowed. Farmers will save on marketing costs. At present, a farmer can sell his produce only through APMC or a registered licensee or the state government. He cannot sell through e-trading or intra-state trading.
The opposition says, farmers used to get adequate prices from APMC, the market is regulated and the state government used to earn mandi fees. The government says, APMCs and MSPs will not be abolished, they will continue.
Secondly, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill will provide for shifting of risks from farmers to those who enter into contract agreement with them. A national framework will be provided for contract farming.
A farmer can enter into contract with companies, processors, wholesalers, exporters and big retailers to sell his produce at fixed rates. The contract farming agreement will stipulate terms and conditions for grades, quality, standards and prices of agricultural produces.
Government says, even if the price drops, farmers will get money as per rates decided in the agreement. There will also be provisions for bonus and premium in the agreement. Those opposed to this bill say, even if the rates are guaranteed, no specific mechanism has been mentioned as to how the price will be decided.
They fear that private corporates may exploit the farmers. They say, most of the farming sector is unorganized and they lack resources to take on big corporates. Presently, a farmer’s produce fully depends on monsoon, uncertainties relating to production and need for a favourable market. The risks are heavier and a farmer does not get full return on his produce. Contract farming is not new in India. In sugarcane and poultry sectors, contract farming is already in place.
Third, Essential Commodities (Amendment) Bill. In India, there is a surplus of most agricultural produces, but due to the Essential Commodities Act, there is less investments in cold storage, godowns, processing and exports. Whenever there is a bumper crop, the farmers fail to get good returns due to fall in prices, and grains and vegetables rot in fields.
The new bill will end government control on production, storage, movement and distribution, except during war, natural calamities, exorbitant price rise and other conditions. This will help in modernizing cold storage and food supply chains, and will ultimately help both farmers and consumers. Stock limit will apply only when the price of a produce doubles.
Foodgrains, pulses, oilseeds, edible oil, onion and potatoes have been removed from essential commodities list. Opposition says, if this is done, exporters, processors and businessmen will resort to hoarding during crop season and this will destabilize prices. Food security will end. Critics say, this will lead to rampant hoarding and blackmarketing.
Most of these apprehensions are baseless. APMCs and minimum support price regime will continue, the only difference will be that farmers will get better options of selling their produce at a higher rate to buyers, both from inside or outside the state. The new farm laws will break the shackles put on farmers by middlemen and commission agents.
Farmers will get maximum price for their labour and investment. Fears have been raised about corporates grabbing farmers’ land, but the new law clearly limits the corporates to purchase of produce only, they cannot buy, mortgage or take farmers’ land on lease. In Punjab, Pepsico is already into contract farming with farmers for supply of potatoes and this model will replicate in other states too.
Fears have been raised about farmers having to run after the corporates to get back their earnings. The new law clearly stipulates that farmers must get their money within three working days if they sell through e-commerce, and corporates that buy produces directly must pay the farmers on the spot.
Congress had promised these measures for farmers in its last election manifesto. In February 2011, when Dr Manmohan Singh was PM, he had called for modernizing delivery system in order to create a better marketing chain. He had then asked the private sector to enter the farm sector.
But now, the Congress has down a complete U-turn and is now describing the bills as ‘anti-farmer’. It is clearly indulging in vote-bank politics. The Congress had activated its rumour mills even before the government could get time to explain the provisions of the bills to the farmers.
For the last six years, the opposition has been in the sidelines, but it has now come out with the farmers’ issue to corner the government. Elections are due in Bihar this year and elections in Punjab are due in 2022. In both these states, farmers as a bloc are the deciding factor during elections. It goes to Modi’s credit that he is trying his best to dispel the clouds of fear and doubt from the minds of farmers.
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