The Agrarian Revolt of 2020
“Jai Jawan, Jai Kisan.”: a slogan that dominates the protests of today. But, in reality, how much do we value our farmers? Do we empathize with them as much as we claim that we do? Do we understand them as much as we think we do? Recently, there have been many farmers protesting around India, especially the ones belonging to Punjab and Haryana, against the three farm reform bills passed by the Parliament in the Monsoon session: The Farmers’ Produce Trade and Commerce Bill, the Farmers Agreement on Price Assurance and Farm Services Bill and the Essential Commodities Bill.
I’m sure many of us have heard about these bills and demonstrations. Still, very few know why farmers are protesting against the agriculture bills and what implications do these policies hold. The government intended to empower the agricultural suppliers, then why the chaos? On the one hand, the Prime Minister himself has called this “historic” bill, a “protection shield” for farmers. On the other hand, news like BJP’s Union Cabinet Minister, Harsimrat Kaur Badal resigning due to this bill has been making headlines. The dual impressions of this policy have created confusion, so let’s find out what these bills mean for farmers.
Generally, when farmers harvest their crops, they are taken to the regulated Agricultural Produce Market Committee (APMC) or better known as the ‘mandi’. This mandi ensures that farmers are safeguarded from exploitation by large corporate retailers. Through price discovery practices like auctioning in the APMC, farmers can determine the market price of their products or even sell at an assured minimum support price. However, there are challenges since this process involves intermediate stakeholders, more popularly known as the ‘arhatiyas’. They have a reputation for indulging in exploitative practices like price setting, hoarding, and artificially inflating prices. Hence, like any other market, the mandi is also not perfect and has its narrative of the good, bad and the ugly.
Now, let’s bring the government into the picture. Through these bills, the government effectively plans to dismantle the APMC and remove the arhatiyas’ gradually. Is this well-intended? Definitely. But this would force the farmers to deal with corporate retailers directly. This factor opened the floodgates of critique against this policy. One nation, one market is an idyllic ideation. In theory, the government believes that this removal of middle traders would help farmers double their margins by the end of this year. But, in reality, is this feasible?
To find out more, I had a conversation with Mr Kailash Pethe, a Karif and Rabbi farmer in the Beed district of the Marathwada region. According to Mr Pethe, the fear regarding MSP termination is a real problem. He firmly believes that no one should be allowed to buy below the MSP, similar to how no one is allowed to pay diesel, electricity bills, fertilizers and pesticides under MSP. However, currently, maize is being sold at Rs. 700-800 despite an MSP of 1760. Paddy, although mandated a price Rs. 1855 per quintal under MSP guidelines, is now being sold for Rs. 1100. That’s why Mr Pethe and fellow farmers are very unsure of the government plans ahead. They have no trust in empty promises and word-of-mouth persuasion. For them, MSP needs to be assured by the law.
Point taken, but, what about the freedom and flexibility these bills offer to farmers? Dealing with, not just the small, but also the big names- that’s a huge opportunity to grow trade, isn’t it? Not according to Mr Pethe. He thinks that farmers may not know how to negotiate the best terms with a private company. Too much freedom, with little or no power, can be dangerous! There is little regulation outside the mandis and no grievance redressal mechanism yet, so how will farmers protect their interests? Mr Pethe’s concern is indeed valid. Lack of bargaining powers with big companies is a growing concern. With advancements like Jio Mart, farmers are now afraid that these monopolistic price-makers would manipulate contract farming. Even in dispute resolutions, the corporate bureaucrats would have more power than the court of justice.
These concerns raise pertinent questions about the underlined agenda of these bills: Corporatization of the agricultural sector. More corporate entities will connect with the farmer, not to change the farmer’s fate but their own. The argument that the number of layers will reduce isn’t valid as well. Corporate retailers would trade with B2B processing companies, who would enter into long-term contracts with end-user foodservice distribution companies like Big Bazaar, DMart and Reliance Fresh. The only difference will be that the new middleman will be a corporate entity. This is what Mr Pethe and his colleagues are distressed about. These farmers have fed and are still feeding people even during the pandemic, working relentlessly day after day. So, it is natural that they now feel deceived by the government, which has suddenly introduced traders and corporates into the equation, when there is an inequality of power between the two parties.
However, if you look at the bigger picture, the problem seems to be more intricate. Majorly, the Northern mandi structure is entrenched. They have expressed their concerns about losing mandi tax revenue as well. For instance, Haryana has a mandi tax as high as 6.5 percent. With the new bills, they are estimated to lose Rs. 400 to 500 crores. In South India, however, the reliance on mandis is relatively lower, and the mandis are more adaptable to change.
Nevertheless, it’s still important to note that farmers across have been demanding reforms for the last 30 years. In 1991, reforms were brought, which saw a growth of 8-10% percent in the service and industrial sector. Still, the agriculture sector has always been neglected. Whilst the government has taken a step forward to work towards agricultural concerns with this bill, its mandates are equivalent to taking ten steps back, according to many farmers like Mr Pethe.
On the whole, although most people, especially in rural India, are employed in the agricultural sector, very little has been done to safeguard this industry. For instance, according to P Chengal Reddy of the Indian Farmers Association, 60% of produce including fruits and vegetables has no MSP; 30% of produce including pulses, oilseeds and cotton, doesn’t have MSP. That’s why this abolition of MSP yet again further threatens welfare. Although our government isn’t able to efficiently distribute surplus crops to the underprivileged and malnourished; in theory, an MSP coupled with effective distribution procedures is needed to prevent starvation. Instead of moving further towards this direction of efficient food distribution, these bills have introduced sudden liberalization, which may now encourage corporates to re-sell food items at a higher price to the poor.
So, what can the government do? Of course, APMC has its faults, but it is still a system deep-rooted in India since 1965. Hence, it’s more vital to gradually improve the operations between farmers and intermediaries, instead of altogether abolishing it. Many farmers are also proposing solutions such as: establishing more APMCs that would safeguard their interests; opting for ‘One Nation, One MSP’ to reduce levels of uncertainty across India; increasing regulations of mandis; or at least the involving farmers in appropriate consultations before taking such monumental decisions. The government should work with the states to bring positive amendments to these bills to the end the trust deficit amidst farmers.
Nonetheless, the bottom line remains that our government, over the last couple of years, has shown us that they have good intentions and even better persuasive strategies when undertaking policies. However, hasty implementations can even cause the best intentions to fail, triggering policies to back-fire.
Illustrated by Amisha Thakre