• By: Tanveer Ahmad Dar
Recently, the Central Government has come up with the Agriculture Ordinance on 3 subjects which have also got the President’s approval. These three ordinances are related to the future of crores of Indian farmer and their families. While as, the economists believe that during the pandemic period, the wheel of the Indian economy is moving only on the basis of the hard agricultural work of farmers. Contrary to this, through these ordinances, the central government is planning to exploit farmers by stopping purchase of Farm produce at MSP.
As per the ground situation, even today farmers are not getting the MSP of their crops as per C2+50% formula of swaminathan commission, but in spite of that, the farmers are living their lives somehow. If the government stopped procurement on MSP, the food security of the country as well as the farming sector will be in a big crisis.
• True intentions of the Central Government
Through these ordinances, the central government is planning to abolish the procurement of farm produce at MSP (Minimum Support Price). The central government claims that these ordinances will benefit the farmers, but in reality, the big companies will get benefitted. We are all well aware about the pressure of the WTO on our central government to stop the procurement on MSP and to stop every kind of subsidy received by the farmers . Even before this, the Congress and BJP governments tried unsuccessfully to abolish the procurement at MSP, but they had to pull back due to pressure from the farmers and farmers organizations. Now in an undemocratic manner, the central government has issued these three ordinances by taking advantage of the lockdown due to coronavirus. The government thinks that due to coronavirus, farmers cannot collectively agitate against these anti-farmer ordinances. Government is trying to judge farmers’ mood by stopping procurement of Maize & Moong at MSP this year. Now central government is planning to stop the procurement of wheat & paddy on MSP in upcoming years.
• All 3 Agriculture Ordinances are explained below in detail
The first ordinance is Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Ordinance : Under this, the central government is planning to create “one country, one agricultural market”. Through this ordinance, Any person having a PAN card, company and supermarket can buy goods of any farmer at any place. The central government has removed the condition of the first sale of agricultural goods in the APMC yard. Importantly, the purchase of agricultural goods that will be outside the APMC market will not attract any tax or duty. This means that the APMC market system will gradually end as taxes and other charges will continue to be levied in the APMC system. Under this ordinance, the person holding the PAN card, company or supermarket, who purchase the goods of the farmers, will have to pay the farmers within 3 days. If there is a dispute between Company and farmer then SDM will solve that dispute.
First a committee of the farmer and the officer of the company purchasing the goods will be made & given 30 days for resolution through mutual negotiations, if the dispute is not resolved through negotiations then the case will be heard by SDM. If Farmer or Company disagree with the SDM order, an appeal can be made to the District Officer, the District Officer will have to resolve dispute within 30 days. An important point to be carefully noted is that, in case of a dispute between the farmer and the company, Farmer or Company can not go to civil court. The thing to be noted here is that the administrative officers like Sub-Divisonal & District officers are always under the pressure of the government and the government always stands in favor of the traders and companies because at the time of elections, traders and companies make huge donations to political parties.
Courts are not under government and every Indian has been given the right to go to court for justice, but due to the new ordinance, it will be very difficult for the farmers to get justice. It is also to be noted that the Central Government has not given any guarantee that the purchase of the Farm goods by the individual having pan Card, company or supermarket will be at or above the MSP (Minimum support price). The government has not declared the MSP as model price. The biggest danger from this ordinance is that when the crops will be ready, at that time big companies will form cartels & intentionally drop the prices of the farmers’ goods and store it in large quantities by puchasing at very low price which they will later sell to the customers at higher prices.
The APMC Act was enacted by different state governments to ensure the procurement of farmers’ produce at MSP and to curb malpractices of traders. According to the law, the control of APMC mandis should be with the farmers, but there too traders formed cartels and started looting the farmers. While there are many problems in the APMC Act that need to be addressed, on the other hand one of its biggest advantages of APMC’s is that under this it becomes the responsibility of the government that Farmer’s products are procured at MSP. Now through the new ordinance, the government wants to avoid its responsibility and accountability for the purchase of farmers’ goods on the MSP. When the purchase of farmers’ goods is not done at designated places, the government will not be able to regulate whether the farmers’ goods are being purchased at the MSP or not.
There is a need for reform in the APMC Act but instead of reforming it, government is trying to bypass the APMC act and this will result in increase in exploitation of the farmers. For example in 2006, Bihar government abolished the APMC Act, and stopped procuring Farmers’ produce at MSP which resulted in Mass Migration.
After scrapping APMC act, Bihar government promised huge investment in agriculture by private sector but nothing had happened & farmers are forced to sell their produce far below the declared MSP.
• The second ordinance has been enacted to change the Essential Commodity Act 1955
Before Essential Commodity act 1955, the traders used to buy the crops of the farmers at a very low cost and do black marketing by storing them in their big godowns. To stop this malpractice, the Essential Commodity Act 1955 was made under which storage of certain agriculture products more than a certain limit was banned. Now under this new ordinance, the ban on the storage of potato, onion, pulses, oilseeds, and oil has been lifted. The government is claiming that this will help farmers but one need to understand that 85% farmers in India are small farmers & they don’t have storage capicity. In reality, his ordinance has been brought by the government under pressure from big companies so that they can do black marketing of agricultural products.
These companies and the supermarket will store agricultural products in their big warehouses and later on they will sell these products to customers at higher prices.
• The third ordinance has been implemented by the government on the subject of “contract farming” called “The Farmers Agreement on Price Assurance and Farm Services Ordinance” –
Under this, contract farming will be encouraged in which big companies will do farming and farmers will only work as labourers in their own fields. Through this ordinance, the central government wants to impose a western model of agriculture on our farmers, but the government forgets that our farmers cannot be compared to Western farmers because the land-population ratio in our country is entirely different from western countries. The government must remember that in our country, farming is means of livelihood while in western countries, it is business. Experience shows that contract farming leads to the exploitation of farmers. Last year, the PepsiCo Company in Gujarat sued the farmers for several crores which was later withdrawn due to opposition from the farmer Organization’s.
Under contract farming, before sowing the crops, the companies promise to buy the farmers’ goods at a fixed price, but later when the crop of the farmer is ready, the companies ask the farmers to wait for some time and later the farmers’ products are often rejected as being defective or rotten.
The central government claims that these 3 agricultural ordinances will create a free market for agriculture. Before drawing any conclusion, one must study the experience of farmers in USA & Europe regarding Free market policies in agriculture. Before free market policies in 1970’s , Farmers in USA used to get 40% of final retail prices of agriculture products, after implementation of free market policies, farmers are only getting 15% of final retail prices. Despite having a free market policy, farmers in Europe get government assistance of about Rs 7 lakh crore every year to sustain farming. Experience in the US and Europe suggests that farmers are harmed by free-market policies and big companies & super markets are flourished .
If government wants to benefit the farmers, then central government should reform the APMC Act and implement the “Uzhavar Santhai” scheme. Uzhavar Santhai scheme was implemented in TamilNadu in 1999. Under this scheme, Late Chief Minister of Tamilnadu Shri. M. Karunanidhi started Uzhavar Santhai markets to establish a direct link between farmers and cunsumers. Under this scheme, farmers get 20% more price than open market for their produce and customers get the Agriculture Produce at 15% less price. As per strict rules of these markets, only the farmer can sell their goods and no merchant is allowed to enter these markets. Only after proper documentation & verification, farmers can sell their goods in these market.
In these markets, no shop rent is charged from farmers & free cold storage facilities are also provided to farmers. Along with this, farmers connected with “Uzhawar Santhai” market get free transport facility in government buses to bring their goods.
• These 3 Agriculture Ordinances are existential threat for farmers because government is planning to stop procurement of Farmers’ produce at Minimum Support Price.
• These agriculture ordinances are unconstitutional because Agriculture is a state subject & central government has no constitutional right to interfere.
• These ordinances are undemocratic because Government has brought these ordinance when whole country is busy in fighting Coronavirus pandemic and Parliament is not in session. Most unfortunate thing is that there is no consultation with Farmer Organizations regarding these ordinances.
Author is a President of RKMMS-JK. He can be reached at firstname.lastname@example.org