Friday, 2 December, 2022
HomeOpinionModi govt’s three rushed ordinances can help agriculture, but not farmers

Modi govt’s three rushed ordinances can help agriculture, but not farmers

None of the new agri-marketing laws have anything to do with the coronavirus or the lockdown, but were brought in by Modi govt when Parliament was shut.

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My friend Ajay Vir Jakhar, who runs Bharat Krishak Samaj and is currently the Chair of Punjab Farmers’ Commission, has tweeted a mischievous request asking for names and contact details of those farmer organisations that support the three “historic” ordinances passed recently for the agriculture sector.

He asks this question even as he knows the answer: none. None of the myriad farmers’ organisations, unions, coalitions with any mass base, with the possible exception of the BJP’s own Bharatiya Kisan Sangh, have welcomed or even supported the Narendra Modi government’s three laws on agri-marketing. All the organisations that I know of and work with have vehemently opposed them. That should set everyone thinking. Are these ‘historic’ moves really going to work for the farmers?

This reform package combines three laws, all introduced through the ordinance route. First, the Modi government has amended the Essential Commodities Act to remove the existing restrictions on stocking food produce. Second, it has introduced a new law — The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 or the FPTC Ordinance — to end the monopoly of the Agricultural Produce Market Committees (APMC) and allow anyone to purchase and sell agricultural produce. Third, another law — The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 or FAPAFS — has been enacted to legalise contract farming, so that big businesses and companies can cultivate vast swaths of land on contract.

I am not claiming that farmers’ organisations have the final word in this matter. Opposition of farmers’ organisations to these may well be the result of a trade unionist resistance to change, knee-jerk opposition-ism, or prejudice against the Modi government. I am conscious that many pro-farmer analysts, whose wisdom I draw upon, have endorsed these ‘reforms’. These include economists such as professor Ashok Gulati, former agriculture secretary Siraj Hussain and analysts such as Harish Damodaran. So, we must approach these with an open mind.

Also read: Agriculture sector to grow at 3% in 2020-21 despite Covid-19 lockdown: Modi govt

Backdoor laws

Let us begin by noticing the timing and the method of these ordinances. Even the advocates of these laws agree that none of these have anything to do with the coronavirus or the lockdown. These changes do not even pretend to address the demands or the acute needs of the farmers during this period of distress. So, its inclusion in the Covid ‘relief package’ was purely a distraction. There is nothing so urgent in any of these three laws that calls for bypassing Parliament through an ordinance. These measures have been debated for decades and could wait a few months for Parliament to reconvene.

Besides, it is not clear what gives the Modi government the power to legislate upon agriculture and intra-state trade, which are state subjects. True, trade and commerce of ‘foodstuff’ is in the concurrent list, but if states have the right to pass APMC Acts, surely they have the jurisdiction to bypass APMCs. In any case, there is not even a constitutional fig-leaf that gives the central government the power to legislate on contract farming. Prima facie, the FAPAFS is unconstitutional.

If the Modi government really wanted to bring about historic changes to agricultural laws for the benefit of the farmers, why did it need to evade public and parliamentary scrutiny? Why bring these changes through the back door, in dark hours of a national medical emergency, displacing the constitutionally mandated state governments?

I can anticipate the response to these objections. The honest defenders would say: you are right, this is procedurally all wrong, but it was needed. So, let us address the substantive issues.

Also read: Govt approves big agricultural reforms that’ll help farmers trade freely, get better price

A critical reform

Let me begin by agreeing with the supporters of these ordinances on one basic point. Agricultural markets are over-strained by a web of outdated laws that were codified with a food scarcity mindset. State intervention at every step is not a smart idea and can often be counter-productive. We need to remove many restrictions on trade in agricultural commodities so as to stabilise food markets and help agricultural growth.

The amendment to The Essential Commodities Act does that and should, therefore, be welcomed. The restrictions on ‘hoarding’ were a legacy of the food crisis of the 1950s. We do not need these now, barring a national food emergency. Removal of these would help traders and stockists, and may sometimes help crop prices from falling. By the same logic, the government should have done away with the export restrictions on agricultural commodities. But that critical piece is missing from these ‘reforms’.

Doing away with APMCs

On the FPTC ordinance, there is no doubt that the existing APMCs are full of problems. Farmers are over-charged and often exploited. They could do with some stiff competition. But the changes proposed in the ordinance, especially the prospect of zero-tax trade outside the APMCs, could lead to the “withering away of the eco-system of the APMC”, as Siraj Hussain acknowledges.

Would that help the farmers? We just have to look at Bihar, which did away with APMCs in 2006, and other states that have never had APMCs. I can say through personal experience that farmers in these places would rather be exploited by the APMC than be at the mercy of a private trader in a fragmented market.

This ordinance would help big business do direct deals with the farmers, but it is not clear that it would help the farmers who have little bargaining power. It could end up demolishing the existing faulty structure without replacing it with anything better.

Also read: From Meghalaya to Jharkhand, how India is ensuring agri supply chains are not disrupted

Not for farmers

Similarly, giving legal sanction to contract farming would help corporates enter the agriculture sector and may increase productivity. But would it help the farmers? For one thing, the FAPAFS ordinance has little to offer to the millions of farmers who are currently engaged in contract farming through informal agreements of theka or batai.

Some form of registration of these tenant farmers without threatening landowners would have been a huge land reform waiting to happen. Instead, the FAPAFS could lead to disruption in this ongoing practice of contract farming. The absentee landlord would now prefer to deal with written contracts of a company over the hassle of dealing with local tenants. There is nothing in the ordinance to ensure that the contract agreed to by the small farmer with little bargaining power would be fair. There is an elaborate dispute resolution mechanism, but how would the farmers access it when pitted against big companies?

History teaches us that laws do not operate in vacuum. It all depends on the conditions in which a law is enacted and executed. As scholars of agriculture and mandis remind us, we “must not begin by overstating the power of legal reform in guaranteeing economic freedom and outcomes”. Given the timing, the context and the overall balance of power in which these three ordinances have been enacted, these are likely to work for the traders, big agri-businesses and corporates and not for farmers, least of all small farmers.

These reforms may increase agricultural productivity, improve food markets but are unlikely to help farmers’ incomes. At best, this may be another example in the long history of policies that work for agriculture but not for farmers.

The author is the national president of Swaraj India. Views are personal.

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  1. I totally disagree to these three rules. First of all this is a democracy so any bill to become an act should be properly passed by both houses, but this was introduced as an amendment from back door this itself raise a big question mark on the BJP. Secondly those who agree to this bill should go and read the history about the indigo rebellion of 1850s when a similar type of law was incorporated and farmers were forced to grow indigo and other cash crops in their fields. I agree that today there is no food crisis like that but don’t you think I will lead to that same situation where the farmers were forced to do contract farming by producing not the crops of necessity but of monetary benefit.
    And above all here all corporates will purchase and sell the produce as per their terms which will originate out of profit and not for benefitting farmers. This should be opposed at any cost. If you respect the farmers of your country and think that they should also get better economical lifestyle, their children should also get better education and healthy life. SAVE OUR FARMERS TO SAVE OURSELVES!!

  2. kisano ke liye siwaye brbadi ke kuch nhi lekaar ayega…ye bill lekr aane se pehle sansad me pass krao..rajya sabha me rkho..kisano se slaha lo…..corporate ke liye ye bill lekr aya ja rha he….apki talabndhi me …sehro ne sath chod diya…gav ne bchaya..aur gav ko bchati he kheti …tum isko b le dubo…..shrm aani chahiye ……
    agriculture is part of state …not centre…ye totally illegal h…esi hi bina soche smje Land bill ka ordinance laya gya…
    kisano ke bche gumraha h…. es mahamari me kisano ke sth dokha h….i strongly oppose this ordinance…shame on govt.

  3. Of Course, too much work force on agriculture will never return best value for the given labour force India has. Diversion of majority to manufacturing will make rest more happy. We expect solutions from you, not the usual faulty findings.

    • Very appropriately noted! India has these types of nit-picking Intellectual types, who are essentially eating the very Elan Vital of the Nation. What do they do, just quote some foreign authors or writers and then surmise on matters affecting India. Indian agriculture needs improvement, we are a democracy and we are not doing what China is doing or has done. Can you believe it–after China changed its Agricultural Laws, so many agricultural products from China are now taking the shelf-spaces in each US grocery chain. From Onions to Water-melon to Jack fruit to Celery, Cucumber –you name it. In short, India must get over the dogmas, what is good must be brought forth–even if the needed changes affect the established set up. What a pity–our India even today cannot produce basic things, although we have some of the best brains. The Trade Union mentality, the ennui, the Chalta Hai attitude must be forced to disappear. Onward, India must move!

  4. Another nonsensical arguments from undereducated jhollawallas who feed on poverty of masses. If agriculture is also turned into contract farming industry people who come to seek work to cities as contract labour would get work in their village and some stability in income. INDIA must ignore this congrass voices who kept masses poor and helped corrupt politicians and middlemen rule the country

  5. This is the good move in agriculture… Farmers will be benefitted as they are asked for brief for every per bag weighing. Traders will also benefitted as there is no cess fee, controlscont all brief amounts to apmc.. so highly corrupted apmc will be removed… This is good healthy move by modiji govt.

  6. These agri economist are the only reason indian economy sinking , sitting in ac room they address the farmer issues without having field knowledge they are the pupet of opposition. They and few kissan leader , union and agronomist know very well there shops and corruption is going to be end by this approach. Apmcs taking full advantage of monopoly creating wealth with the help of corruption. Small farmers and traders both are scared with their actions modi ji like god saving us and these guys opposing him . They should ashamed.

  7. What are you trying to say? very confusing
    No need to hurry? We spent 50 years debating on ideology, time to start acting on it.
    25+ states consensus? will that ever happen? it takes another generation to get consensus on any reform.
    What impact this article has on quality journalism? we have enough leftist, rightist or biased news channels in market. Does this confused article makes stands from others.

  8. The criticism on timing and method seems like criticism for the sake of it. Across india different states have opened up the market to farmers as existing supply chains were disrupted. Inorder to make that apply everywhere, the ordinances were enacted.
    The author also assumes that APMCs stand demolished. They aren’t. The centre is only using its power under concurrent list to regulate trader in foodstuffs. And it was the states that overstepped their bounds by regulating their trade. Trade in foodstuffs and agriculture are different. Art.301 of India’s constitution is also abt freedom of trade and commerce throughout india. So the centre is well within its bounds to give farmers an alternative to the oppressive APMCs.
    Coming to pro-agri vs pro-farmer. I wonder how do people come up with these ideas. For the reforms to be pro-farmer, what exactly does the author want? More freebies and loan waivers perhaps. Coming to land reforms, well that is upto the states. Because it is clearly in statelist almost exclusively in all aspects related to land. It’s funny how the author wants centre to push for somehow that is in state list but doesn’t seem to like its actions on foodstuff in concurrent list.
    If we are truly for our poor farmers, stop condemning them to farming. Even with free markets in agriculture, it can’t feed so many farmers and give them decent lifestyle. We need lots of manufacturing to grow to absorb these farmers. Which will need land acquisition reforms which i am sure many of similar political leanings like the author himself won’t be ok with.
    This article Essentially tries to sound like genuine criticism but it is not.

  9. Yogendra Ji what would be your suggestion to government on what needs to be done to bring agricultural reforms ?

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