In the midst of the pandemic and while the country was under lockdown, the government passed three ordinances relating to the Agriculture sector. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020, and The Essential Commodities (Amendment) Ordinance, 2020.
These ordinances have now been passed in the parliament in spite of nation-wide protests by farmers and strong opposition in the parliament. The ordinances and now the Agriculture Acts have been criticised for being anti-farmer and pro-agricultural business.
While Modi government and his supporters are trying to discredit all protest and opposition and making it look like the protesting farmers are misguided and misled by “some forces”.
In confusion, one should know all the facts and decide on their own. Here we present the three recent bills that were passed in the Parliament.
Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020
This act relates to the trading of agricultural produce in mandis regulated by the Agricultural Produce & Livestock Market Committee (APMC). Before this Act was passed, farmers would sell their produce only in APMC mandis of their own area, where Minimum Support Price (MSP) was guaranteed.
This earlier system had its own problems. Yogendra Yadav has written that in these mandis farmers would often be over-charged and exploited and the APMC was rife with corruption. However, instead of reforming the existing system which is intended to protect farmers, this agriculture act is aimed at withering away the ecosystem of the APMC. It allows for zero-tax intra-state and inter-state trade to take place outside of the APMC mandis.
This does incentivise private players to buy farmer’s produce, however, it means that traders outside the APMC mandis get an advantage and may provide higher prices to the farmers in the short-term. Although MSPs will not be assured in these trade centres, farmers will be pushed to sell to them, hence slowly withering away the APMC mandis. Once the APMC mandis are disintegrated, the private traders will have a monopoly over the trade, and farmers will be forced to sell at exploitative prices.
This can be seen from the condition of farmers in Bihar, where the APMCs were shut in 2006, and today agents purchase crops from farmers at throwaway prices and sell that in other states at MSP, thus making huge profit margins.
Only farmers who own large plots of land and have access to a lot of resources will reap the benefits from this act, as Parikshit Goyal writes on Down To Earth, sufficient capital, enough understanding of the free-market forces, comprehension of price and market fluctuations and electronic/broadband connectivity is necessary to be able to compete in an open pan-India market. Marginal and small farmers with extremely small plots of land will all be harmed by the lack of protection and liberalisation of the agricultural market. Farmers without storage facilities will be taken advantage of as private players will try to buy their produce at lower prices, knowing that they cannot store their produce for too long.
Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020
This act provides a legally enabling framework for contract farming. In the absence of mandis, farmers will be forced to depend on contractual farming and enter into potentially exploitative agreements with big corporates. Farmers will not only not have control over the prices at which they sell their produce, but will also not have control over what they produce. Small and marginal farmers without the ability to engage in legal battles or without any collective bargaining power are likely to enter into unfair contracts with big corporates. The act does not mandate MSP for contract farming.
The Essential Commodities (Amendment) Act, 2020
The Essential Commodities (Amendment) Act, 2020 supersedes the Essential Commodities Act-1955. The new act is expected to give rise to hoarding and higher prices of commodities for consumers. The act’s aim is to promote competition in the agricultural sector; augment farmers’ income; taking care of consumers while liberalizing the regulatory system. According to Yogendra Yadav, it may sometimes help crop prices from falling.
The glaring absence in all of these policies is any redressal of the crisis that farmers have been going through, especially in recent times. There has been no attempt made to protect farmers from floods, droughts, or cyclones, or address the massive debts that small farmers are placed under due to the exploitative conditions of the agriculture sector. The government has shown complete disregard for the opinions of farmers who have not once been consulted either in the sudden passing of the Ordinances during the lockdown or now in the equally suspect passing of the Acts.