Farmers protest: Why are agrarians in Haryana, Punjab and UP opposed to three farm sector ordinances

The stated purpose of the ordinances is to create ‘one nation one market’ and provide farmers a choice on who to sell their produce to, however, agrarians fear they will not get the MSP for their crops as per the new laws

FP Staff September 13, 2020 00:12:44 IST
Farmers protest: Why are agrarians in Haryana, Punjab and UP opposed to three farm sector ordinances

The Central Government's three farm sector ordinances, supposedly for the betterment of agrarians, have met with stiff resistance from farmers and farm labourers in Haryana and Punjab and now parts of Uttar Pradesh.

On Thursday, hundreds came out on streets in Haryana's Kurukshetra to oppose the new laws promulgated without deliberation in the Parliament.

They even blocked the Delhi-Chandigarh national highway for a couple of hours, following which the police used force on the protesting agrarians.

While on the one hand, the BJP-ruled Haryana government booked the Bhartiya Kissan Union (BKU) leaders and farmers over charges of blocking the national highway, damaging public property, attempt to murder, pelting stones at the police and rioting, on the other hand, some of its own leaders and allies extended the olive branch and supported the farmers' right to protest. The Congress has already offered its unequivocal support to the farmers with former chief minister and Congress leader Bhupinder Singh Hooda demanding roll back of the ordinances.

According to NDTVBJP's Haryana chief OP Dhankar on Friday formed a three-member committee — comprising Hisar MP Brijendra Singh, Bhiwani-Mahendragarh MP Dharambir Singh and Kurukshetra MP Naib Saini — to hold talks with farmers.

But the matter is likely to gain steam in the coming days, once the Parliament meets for the Monsoon Session.

What are the three ordinances about? 

Farmers in Haryana, Punjab and now parts of Uttar Pradesh, as well, have been protesting against three ordinances passed by the Union Cabinet during the lockdown.

The first among them is the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Ordinance 2020, which allows farmers to sell produce outside the markets notified under the various state agricultural produce market laws (state APMC Acts).

The second ordinance, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020 overrides all state APMC laws with reference to the sale and purchase of farm products, and bring uniformity into contractual farming rules (and state APMC Acts) across India. It also amends the role of APMCs in case of contract farming.

The third ordinances, the Essential Commodities (Amendment) Ordinance 2020, has brought changes into list of essential items whose prices are regulated by the government.

Why are farmers upset about these ordinances?

Broadly, the stated purpose of these ordinances is to create ‘one nation one market’, and provide farmers with the choice to sell their produce for better price and also to attract private investment in the agricultural market.

However, farmers fear that they will not get the minimum support price or MSP (set by the government) for their crops after the implementation of new provisions of the law. They also feel the new law will hit the current system of mandis badly.

The Opposition Congress was swift to capitalise on the opportunity to criticise the government. The Congress has also suggested some changes in the ordinances to make them farmer-friendly.

"These ordinances are against the interests of farmers. If the government wants to implement them, then it should ensure that no purchases are made below MSP. The government could bring in a fourth ordinance separately to provide a clear provision that if any agency buys the crop of the farmer below the MSP, then legal action will be taken against it," former Haryana chief minister and senior Congress leader Hooda said in a statement.

Senior Congress leader Randeep Singh Surjewala said these ordinances will not only "destroy" farmers, but will also lead a blow to the mandi system and impact farm labourers and "arhitiyas" or commission agents as well. Surjewala raised various issues in the ordinances that would allegedly harm the interests of the farmers.

There is also no provision in the ordinances for the protection of the rights of farm labourers or tenants, he said.

"When the mandi system ends, the farmer will be dependent only on contract farming and the big companies will set the price for his crop. What is this if not a new zamindari system?" he asked referring to rules of contract farming notified under Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020.

"As soon as the mandis are done with, the livelihood of lakhs and crores of labourers, middlemen, book-keepers, transporters, etc, working in the grain-vegetable mandis will end automatically," he claimed.

Surjewala alleged it was a "plot" to convert the "disaster of the farmers" into "opportunities" for a handful of crony capitalists under the cover of the coronavirus pandemic.

With the abolition of the Agricultural Produce Market Committee (APMC), farmers will neither get the "minimum support price (MSP)" nor the price of the crop according to the market price, Surjewala said.

Furthermore, the farmers also demand the implementation of MS Swaminathan report by the National Commission on Farmers, which observed that a law should be made for MSP to be at least 50 percent higher than the weighted average cost of production and if the MSP is not paid, it should be a punishable crime, The Print reported.

What does the government say?

To allay fears of farmers, BJP leaders have maintained that minimum support price (MSP) mechanism will continue, and appealed to farmers not to believe those trying to spread falsehood in this regard.

The ordinances seek to provide barrier-free trade for farmers' produce outside notified farm mandis, and empower farmers to enter into farming agreements with private players prior to the production for sale of agri-produce.

The government had first announced these measures as part of the third tranche of the economic package announced in May following the crippling lockdown due to the coronavirus pandemic. At the time, the government had said that under the current system, farmers are required to sell their produces only to licensed middlemen in notified markets, usually in the same area where farmers reside, rather than in an open market, scuttling price discovery.

This resulted in the stratification of buyers and fragmentation of markets and supply chain. Furthermore, such a restriction of sales allows a select few powerful vendors to control the market price.

An article in Hindustan Timesfavouring these reforms argues that the laws have become redundant and allows hegemony of a few wealthy marketeers, who are also the controllers of prices, demand and supply chains.

The system, coupled with farmers' inability to predict their products' worth at the time of sowing, means that the farmers are always at a huge risk of suffering losses. The APMC system, instead of creating a free-flowing market where the profits can trickle down to the producers, keeps a few people in charge of running the show in each district or region.

"Ushered in during the 1960s, APMC regulations were meant to protect farmers from distress selling. Over time, these have often acted as cartels and monopolies, evidence suggests. In December 2010, when onion prices peaked, a probe by the country’s statutory anti-monopoly body, the Competition Commission of India, revealed that one firm accounted for nearly a fifth of the total onion trade for that month at Lasalgoan APMC, Asia’s largest onion market in Maharashtra’s Nashik," the article reads.

The government also says that these laws will not only eliminate free trade barriers in agricultural production, but they will also empower farmers to engage directly with potential buyers in advance of harvest.

With inputs from PTI

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