Farm-sector bills empower farmers by opening more choices, bypassing influential middlemen

No farmer has been rendered any worse-off pursuant to these farm bills. They can not only continue availing benefits under the old system, but can also simultaneously engage in direct trade

Kartikeya Tanna September 25, 2020 18:08:20 IST
Farm-sector bills empower farmers by opening more choices, bypassing influential middlemen

Poll results show the BJP lost 14 rural seats while the opposition added the same number of seats to its tally. If Rupani seeks to reinvigorate BJP in the rural belt, he must address the roots of the agrarian crisis in Gujarat. Reuters

It is an obvious fact of life that more choices means more empowerment. The three laws recently enacted by the Parliament of India amidst much protest and controversy – collectively called the ‘farm bills’ – do exactly that for farmers.

The less choices one has, the more helpless one feels. That was the system until June this year when the Modi government brought ordinance effectively removing the shackles that rendered our nation’s farmers helpless to middlemen who effectively determined the supply and demand of much of the farm produce. The ordinance is now a law.

Under the old Agricultural Produce Marketing Committee(APMC) system, farmers could only sell their produce through mandis (markets) designated by State governments. This led to the rise of middlemen who, through political patronage or undue influence, were able to squeeze the farmer’s revenue as well as control market prices.

This thwarted the development of a competitive marketing system. Farmers neither got help nor the incentive to engage in direct marketing and organized retailing. Agro-processing industries weren’t assured smooth supply of produce nor did the system encourage adoption of innovative technologies.

In 2003, the BJP-led NDA government under PM Atal Bihari Vajpayee introduced the Model APMC Act which aimed to break many shackles which hitherto chained farmers to be the golden birds for politically connected middlemen.

It gave growers, local authorities as well as entities the authority to apply for establishment of not just one mandi per market area, but several such mandis. It sought to permit growers to sell their produce outside of such mandis. It also introduced contract farming enabling direct sale of farm produce to agri-firms, exporters and other buyer groups at a pre-agreed price.

This was aimed at enabling direct marketing – farmers could reach wholesalers or traders and vice versa, understand each other’s demands directly, dynamically take advantage of favorable prices and undertake sorting, grading as well as quality marking at the grower’s farm instead of by the middlemen.

The Model APMC Act, however, was, as its name suggests, a model, a suggestion provided to State governments to reform their own laws. Not all States adopted the model APMC Act. Those who did, didn’t do so in a uniform manner resulting in alack of homogeneity and ad-hocism which, in turn, resulted in an obstruction to a competitive pricing environment for farmers as well as an impediment to the evolution of a modern trading system which could effectively compete on a global scale.

This led to the farm bills which, with one stroke, effectively made available the intent of the APMC Act, 2003 all over the country while adding more aspects to revolutionize the agricultural trade system.

Notably, it isn’t as if the farmers have been thrown directly into the deep end of these reforms. The existing APMC system remains. Farmers can still choose to sell their produce through the mandis. The Minimum Support Price (MSP) system which guarantees a minimum price for produce remains in effect when produce is sold through mandis. In fact, some MSP prices increased. Government procurement of farm produce continues.

Therefore, not only has no farmer has been rendered any worse-off pursuant to these farm bills in that they can continue availing benefits under the old system, they can migrate or, even better, simultaneously engage in direct trade and marketing should they so wish.

What, instead, do we hear from the Opposition? That the farmers will be taken advantage of by the big industrialist groups which have more bargaining power. That these big houses will strong arm them into taking the produce as they wish and pay what they wish.

Yogendra Yadav, the founder of Swaraj Abhiyan, even quipped that poor farmers will not understand contracts that buyer entities send over to the growers to sign. He went on to compare such contracts to Terms and Conditions that one agrees to when creating an account on YouTube or WhatsApp. His rhetoric was – who reads them; who knows what all one is agreeing to when one clicks I Agree.

This fear mongering is, frankly, infantilizing farmers. It is denying them agency. It is effectively telling them that, since they are getting one fish a day, they must not get sucked into the temptation of learning how to fish.

Undoubtedly, with choice and empowerment comes responsibilities. Those responsibilities are, however, opportunities for our country’s kisaan to develop entrepreneurial skills, to finally savour the freedom to willingly enter into a contract, to exercise a choice based on an understanding of what’s best for him.

The kisaan has a tremendous opportunity to enjoy the fruits of a free market. He can join hands with other farmers to increase bargaining power, technology and other farming practices can be shared, costs can be optimized. Cooperation, as opposed to competition – an example of Bihar’s farmers contracting with a major rice buyer which PM Modi alluded to in his address to the nation’s farmers.

This has tremendous positive consequences for the entire industry. Private entities can now be incentivized to invest their hard-earned capital in construction of market yards as well as cold storage facilities, warehouses and other logistical infrastructure, thereby opening up many paths for the entrepreneurial-kisaan. This can also encourage the advent of many startups in consonance with Modi’s desire for an Aatmanirbhar Bharat (self-reliant India).

The Opposition, however, wants to deny agency to our kisaan. Just as it denied agency to our Muslims, SCs, STs, OBCs and other groups for the past seven decades.

Back in the 1960s, India’s second Prime Minister Lal Bahadur Shastri coined the slogan Jai Jawaan Jai Kisaan (Hail the soldier, Hail the farmer). Since PM Modi has assumed power, he has empowered our jawaan – our soldier. Earlier this week, he empowered our kisaan too.

 

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