By Gyan Pathak
There is no end to farmers’ sufferings in spite of our Prime Minister and his team’s proclamations of their being committed to the welfare of the farmers, at every suicide by farmers, at every mischief committed against them, and at their every loss. It points out two things – either the proclamation of commitment is a sanctimonious lip service, or the government is incapable of carrying out their commitment.
The latest example is the three laws relating to agriculture marketing reform enacted by the Union government with a claim that it would benefit the farmers because they are unshackled from compulsion of selling their produced to Agriculture Produce Marketing Committee’s (APMC’s). Even after four months of theirs being in operation since issuance of ordinances on June 5, 2020, farmers are compelled to sell their produce even below the Minimum Support Prices (MSPs) announced by the government. The data from Agmarketnet, the government’s portal that tracks prices in mandis or wholesale markets show that crops such as soyabean, ragi, maize, and cotton were selling upto 30 per cent below MSPs.
The government fails to assure even MSPs to farmers should be read with the government’s claim that they are committed to the welfare of the farmers. We have also a scheme in operation since 2016 called ‘doubling the farmers’ income by 2022’. Another claim of the government is that MSPs are fixed higher at 50 per cent of the input price for crop production. A range of kharif, or summer-sown, crops are selling below federally fixed MSPs, or floor rates, shows a greater anomaly in agriculture produce market, which the new laws fail to rectify in the last four months. It indicates that liberalization of the farm trade in the country in the new shape is unable to handle a record output that has dampened prices in the open market. We clearly need a different set of rules.
Poor returns from crops have been a lingering problem for farmers, especially during episodes of gluts, such as now. For over two dozen crops MSPs are fixed at 50% over input cost. This doesn’t necessarily lead to higher farm incomes as the government’s procurement at MSP rates is largely restricted to wheat and rice. For most other crops farmers are forced to accept whatever the markets dictate. We may face problems for coming kharif crops too, which is likely to touch a record 144.5 million tones, marginally higher than last year’s 143.4 million tones. It is also a fact that farmers in many states do not have the facility to sell their produce at MSPs. Many states also do not have even APMC system and farmers are at the mercy of the private traders. It is worth mentioning here that unprofitable sales come despite the government’s assurances of robust procurement at MSP rates. One can also see the government’s mischief in its last week’s announcement that government would procure 1.4 million tones of pulses and oilseeds at MSP rates. It is just 15 per cent of the total production, too small a quantity to make a difference. Farmers are compelled to take whatever prices the private traders would like to offer them.
What the news laws are doing? There is a provision in the new law that no tax will be levied on trade outside APMCs. It will give unreasonable advantage to the private traders and the APMCs and the state governments will be at receiving end. Government’s claim that APMCs will not get affected by these laws is therefore untrue. It is also worth noting that there is a timeframe for FCI for procurement. They don’t procure crops beyond expiry of the time. It means that farmers’ dependence on private traders will going to be increased.
Government is clearly moving towards facilitating private trade in agricultural goods. Agricultural Export Policy has set a target to increase agricultural export to over 60 billion dollars by 2022. It is keeping in this mind the Essential Commodity Act has been amended and many crops were declassified. It would be pushing up prices of agricultural produce in the market, and would endanger food security for the already vulnerable. Everybody knows, private trade aims only on profiteering.
The claimers of unshackling the farmers perhaps do not know how a crop is sold in rural areas. There are cartels of traders, and no new person can purchase farmer’s produce in large quantities. The cartels and unscrupulous elements do not allow the farmers and any outside trader to sale or to purchase within their areas without being their part. Thus, a farmer is always compelled to sell the produce at the price offered by traders, which is even reflected in the new Agmarketnet data.
The whole world is eyeing on Indian food market for its potential for profit. Foreign and domestic private investors are being given more and more facilities to trade in and out of India. Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales. The Indian food processing industry accounts for 32 per cent of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export, and expected growth.
The Electronic National Agriculture Market (e-NAM) launched in April 2016 had 16.6 million farmers and 131,000 traders registered on its platform until May 2020. It was being further strengthened to create a unified national market for agricultural commodities by networking existing APMCs. Government says that APMCs will exist, but the new laws have provisions to make their functioning difficult. Over 1,000 mandis in India are already linked to e-NAM and 22,000 additional mandis were expected to be linked by 2021-22. Functioning of this platform will now be changes according to new laws.
The new laws are also not capable or removing imbalances in the agriculture market. We can take an example of maize the price of which has drastically come down. Government says that COVID-19 had an impact on the business, adding that they were working constantly to avoid such an imbalance. As for sugarcane, it is already known that farmers cannot sell their produce other than the sugarcane factories they are linked to. They are shackled with private traders. The situation will continue. Many examples can be given showing that farmers will be linked to the mercy of private traders. (IPA Service)