Farmer Bill: Opening Floodgates for Multinationals or Building Bridges for our Bread Makers?

Before the formation of the Agricultural Produce Market Committee (APMC), moneylenders and traders had an upper hand in the agriculture sector and would keep farmers in perpetual debts with their unorganized rules and hearsay. The APMC was formed and trade regulations were established to regularize the Indian agriculture sector under which primarily traders are required licenses to procure and move commodities.

APMC falls under the constitution of state governments who would have authority in decision making and can also voice their opinions to ensure legislature initiatives that benefit farmers – our bread makers if need be. Within the confines of APMC, Minimum Support Price (MSP) and the concept of the market yard – “Mandi” were set in motion. The sole purpose and fringe benefit of the committee are that if farmers are unable to sell their entire production to traders then the government would step-in to procure the produce at MSP. In laymen terms, MSP is a ray of hope for a farmer to depend on

Why Punjab and Haryana are at the Centre of the Resistance?

With the inception of APMCs across India, thousands of regularized market yards were established and acted as pillars that support the Green Revolution. Punjab and Haryana were the torch bearers in the green revolution and had a better and extensive network of market yards. Consequently, over half of the population’s livelihood in these two states depends majorly on farming and related activities, subsequently magnifying the impact of the ongoing distress.

Gaps in APMC…

Even so, APMC seems to trump the new proposed reforms, it still has some cracks here and there which need fixing. Cartels among traders and mafias are being formed for their mutual benefits, and farmers are being exploited. Also, APMC allows the sale of produce into notified market yards and demand fees even if the market yard infrastructure is not being utilized. Here, what you will see is traders/mediators colluding even when it is not needed. Concerned about MSP not being highlighted in the current reform by the government? A mere one- fifth of the agrarians are benefiting from it in a year.

What is the fuss about?

  • The Farmers Produce Trade & Commerce Ordinance, 2020
    • This bill is the crux of “ONE NATION ONE MARKET” ideology, which allows the farmer to sell their produce outside notified markets (the APMCs), and acts as a bridge between interstate trade. Criticisms on this bill stipulate that state governments’ hands will be tied, and they would not be able to collect the market fee. Moreover, traders would prefer tax-free produce and they would benefit from procuring commodities outside the market yard. A gradual consequence of this would be the collapse of the mandi system and resultant worthlessness of MSP.
  • The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020
    • This ordinance illustrates a foundation for contract-based farming and the movement of produce. While offering protection to farmers against price exploitation, it does not shed any light upon price fixation which might result in farmer exploitation by corporate organizations.
  • The Essential Commodities (Amendment) Ordinance, 2020
    • As per the essential commodities amendment, potatoes, onions, pulses, cereals, oilseeds, and edible oils have been discarded from the list of essential commodities. This could significantly disrupt the production and distribution of such commodities. Also, stock limit will only be imposed in case of a surge in retail prices of non-perishables by 50% and perishables by 100% above the average market price. This could also legalize hoarding as licensing will not be mandatory for the mentioned products
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These ordinances have already been practised and abolished or are still in practice in many foreign nations across the globe, where “Free Market” has been “Regularized” by multinational companies. If the “Free Market” were so altruistic, France would not have faced the heart-wrenching increase in
suicide rates. So, yes…we need to watch and learn.

These amendments are for “people who work on acres, not in hours”, who could lose more than gain. Framers could be pressed under the thumbs of corporate companies with their legal battles and twisted contracts. MNCs could monopolize the agriculture sector and farmer suicides and related
losses could increase drastically.

What do we know? What have we learnt?

A trend of “reverse migration” is being witnessed in the country, and the fact highlighting the explicit or implicit relation of majority of the nation’s population to the agricultural sector has come to light. Owing to reverse migration and uncertainty of employment, a chunk of this population is investing in agriculture. Agriculture is the only core industry recording an optimistic growth among all the industries governing India’s GDP. That is, Indian agriculture industry is beating rest of the industries in terms of growth rate. According to the National Statistical Office, agriculture sector GVA grew by 3.4% in the second quarter of FY2020, as compared to the precedent year.

These facts suggest that some core sectors like agriculture and healthcare must not be harnessed as profitability arenas. Considering these sectors as profitability arenas weaken the chances of sustainable development of India. If the bill is aimed at promoting urbanization, then maybe we need to learn a lesson from the reverse migration and reap the benefits. The government should continue offering severance packages and enhance loan clearance benefits for farmers so that the migrated population can create their own employment in the agriculture sector.

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Even though APMC seems to trump the new proposed reforms, it still has some cracks here and there which need fixing. APMC requires farmers to sell their produce only at notified market yards and demands fees even when the market yard infrastructure is not being utilized. Cartels among traders and middlemen are being formed for their own benefits, and farmers are being exploited. Here, what you will see is traders and mediators colluding even when it is not needed, and with the amendments involving multi-national corporations, farmers will continue dealing with this disadvantage. Government authorities should incorporate strategic initiatives to upgrade and rectify the gaps in APMC, instead of aiding the silent killing of APMC.

Author: Sadhana Yadav

Sadhana Yadav is an Electronics and Telecommunications (E&TC) engineer and a strategy consultant with more than three years of experience in the field of market research and business operations analysis. Sadhana has extensive experience in information and communication technology (ICT) and Industrial Automation areas. She keeps up with the ongoing trends in the market landscape and is currently focusing on projecting the dynamics of upcoming trends and the ongoing COVID -19 pandemic.

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