Protesting farmers fear dismantling of MSP system, creation of large monopolies: Agri expert Ajay Vir Jakhar

Jakhar said that the bills will result in a trickle-down model, which will only benefit large companies, not farmers or small traders

Neerad Pandharipande September 21, 2020 11:47:05 IST
Protesting farmers fear dismantling of MSP system, creation of large monopolies: Agri expert Ajay Vir Jakhar

Protesting farmers in Haryana. ANI

The possibility of the minimum support price system being dismantled and corporatisation of agriculture are the main concerns of farmers protesting the government’s proposed legal changes, agriculture expert Ajay Vir Jakhar told Firstpost.

Jakhar, who is himself a farmer based in Punjab’s Fazilka district, is the chairman of farmers’ association Bharat Krishak Samaj.

He expressed his concerns through the interview on a day that the Rajya Sabha passed two of the three crucial agriculture-related bills amidst a chorus of protests both inside the House and outside it.

The two Bills that have now been passed by the Parliament are the Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, and the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020. While the first bill allows farmers to sell their produce outside the Agriculture Produce Marketing Committee (APMC), the second one provides a framework allowing farmers to enter into contract farming.

Farmers protesting the bills on Sunday blocked multiple highways in Haryana, and agitations on the issue have also been planned in several other places in the upcoming days. The government, on other hand, claims that the proposed laws will help cultivators get better prices for their produce and end the role of middlemen.

Responding to these claims, Jakhar said that the bills will result in a trickle-down model, which will only create large monopolies and not help farmers.

Edited excerpts follow:

According to you, what are the biggest fears of the protesting farmers right now?

There is a historical background which needs to be kept in mind to understand why farmers are presently fearful. First of all, there was a report of the Shanta Kumar Committee, which opposed several aspects of the Public Distribution System (PDS), the Food Corporation of India, Minimum Support Prices, etc. (The report, submitted in January 2015, was on ‘reorienting the role and restructuring of Food Corporation of India’). Shanta Kumar is a BJP leader and is the former chief minister of Himachal Pradesh.

Further, the tendency of the present government is to favour cash transfers rather than giving goods and services — whether for the PM-KISAN scheme or gas cylinder subsidies or the suchlike. Last year, the CACP (Commission for Agricultural Costs and Prices) had also raised concerns in a report about open-ended procurement. (The system of open-ended procurement is one in which government agencies buy whatever quantity of foodgrains is offered by farmers at the MSP, subject to some conditions of time and quality). Even this year, the Reserve Bank of India (RBI) has said in a report that open-ended procurement and minimum support prices create problems. Lastly, (Union minister) Nitin Gadkari is also reported to have said that minimum support prices are higher than domestic market prices and international markets, and that we need to look for ‘alternatives.’ All of these things point towards the possibility that the minimum support price regime could be dismantled.

But the government has specifically assured that the minimum support price regime will remain. How do you view this assurance?

It is true that the government, including Prime Minister Narendra Modi, has said that the minimum support price (MSP) will remain. However, farmers find this statement to be deceptive. Even at present, there are MSPs for about 25 crops, but government agencies do not actually procure most of them. A possibility is that in the future as well, MSPs will be announced but they will not give any actual benefit to farmers.. Further, there is a fear that in the future, if the PDS system is rolled back, the government will not need to procure anything. There is also the question of whether the Food Corporation of India has the infrastructure to store the grain that is procured by government agencies.

Let us take the examples of Rajasthan and Madhya Pradesh, where the state governments do not engage in open-ended procurement. Generally, only five acres’ worth of produce is procured. Cultivators in Punjab and Haryana fear that this will happen to them.

Recently, you had said that Punjab has a successful agricultural mandi model, which should be replicated elsewhere as well. Could you elaborate on why it is so?

Amidst the COVID-19 lockdown, there were about 3,000 procurement centres in Punjab. This network was the reason why procurement at the minimum support could happen to an extent in the state.

Some experts such as Ashok Gulati have argued that the proposed laws will benefit the farmers by ensuring more competition and better prices. How would you respond to these views?

I fail to see how that will turn out to be true. The government seems to be saying that it will give loans to industries and industries will invest in procuring farm produce. This is a trickle-down model, which will not work for farmers. There are other concerns as well. For example, the government has recently banned the export of onions, which has effectively put a cap on the prices of the commodity. This is hardly an enabling environment for traders to invest in agricultural procurement. And even if traders invest, there is no certainty that farmers will benefit. What is more likely to happen is that there will be large monopolies, and small traders will get wiped out.

The government has also claimed that the bills will end the role of middlemen, which is also a far-fetched claim. My position has always been that middlemen can never be ‘finished off’ and anyone who makes such a claim is living in a daydream.

Do you believe that concerns about the bills are largely restricted to Punjab and Haryana, or do you think that farmers in other states also have reasons to worry?

There are two broad areas of concerns. Farmers in Punjab and Haryana are particularly concerned about MSPs, but they gain more from the system as compared to other parts of India. At the same time, in other parts of the country as well, farmers fear corporatisation of agriculture and larger monopolies. They are concerned that they may get an even worse deal than earlier.

What would be the best way for the government to reassure the agitating farmers?

The government should clearly state that open-ended procurement of paddy and wheat in Punjab and Haryana will not stop. However, unfortunately, it is not making such a statement as of now, and the reason for not making such a statement could be that it does intend to stop this system. The government must clarify on this if it wants to assuage the concerns of the farmers.

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