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What economists like Ashok Gulati still don’t understand about agriculture in India

Indian farmers have read the writing on the wall. India’s economists have not.

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Do Indian farmers understand the agrarian economy better than Ashok Gulati? Ridiculous as it might sound, the answer could well be: yes.

Professor Ashok Gulati is the leading agricultural economist in India, and among the scholars I read, consult and respect. He combines solid scholarship with genuine concern for the farmers. He has the spine to stand against governments of the day, including the Narendra Modi-led one, and if need be, against farmers’ movements. In line with his position over the years, he has welcomed the three new agricultural bills, calling it the 1991 moment for Indian agriculture. Most enthusiasts of this measure, including ThePrint’s Editor-in-Chief Shekhar Gupta, have used his arguments to support these laws.

Sadly, Gulati is profoundly mistaken. It is not a mistake of biased scholarship, bad data or poor reasoning. It is a profound error of an economics that seeks to offer policy advice to the government. This became clear to me for the first time when reading a rich exchange between two economists, Jean Dreze and Ashok Kotwal. In response to Kotwal’s advocacy of cash transfer over subsidised food to the poor, Dreze drew a distinction between an economist who advises the government and an economist who advises the poor. The policy advisor must think of the possible benefits while assuming that his or her suggestions will be implemented fully and in the right spirit. The advisor to the poor must focus on the likely consequences of a policy, how would a policy be implemented, on the ground. Dreze said that on paper, direct cash transfer can be the most economical and efficient way to help the poor, but food-grain delivery through ration shops is their best real-life option.

This is true of the three agricultural legislations as well.

Also read: When Modi govt came to power, farmer protests increased 700% — the 3 bills are its result

Economists vs farmers

On paper, the economic rationale for these laws follows from the textbook of economics and can be stated best in Professor Gulati words in The Indian Express: these laws “provide greater choice and freedom to farmers to sell their produce and to buyers to buy and store, thereby creating competition in agricultural marketing. This competition is expected to help build more efficient value chains in agriculture by reducing marketing costs, enabling better price discovery, improving price realisation for farmers and, at the same time, reducing the price paid by consumers. It will also encourage private investment in storage, thus reducing wastage and help contain seasonal price volatility”. How can anyone, except those with ideological blinders, disagree with these measures? The opposition’s claims that farmers won’t get minimum support price (MSP) is “plain falsehood”, writes Swaminathan Iyer, another economist I read with respect.

Their reasoning is not bad. But their assumptions about ground realities are shaky. And their projections about how these acts will be implemented are wishful thinking. Naturally, their conclusions are profoundly mistaken. A farmer, who doesn’t understand the intricacies of economics, intuitively arrives at a better ‘impact assessment’ of these laws than these ‘disciplined’ minds. If you prefer a formal argument and not just intuition, don’t go for a regular economist, but read an anthropologist like Mekhala Krishnamurthy, an activist like Kavitha Kuruganti, or a grounded economist like Sudha Narayanan.

Also read: Farm reform laws open the market. Now, a regulator is needed

Assumptions vs reality

Let me examine four assumptions that must hold for these laws to bring the promised bonanza to farmers. The first assumption is that farmers lack choice when selling their crops because they are forced to sell it to the sarkari mandi, the Agricultural Produce Market Committee (APMC). This is a false picture, because only one quarter of all agricultural produce is sold through these mandis. Three-fourth of Indian farmers already enjoy the freedom that the government promises them. What this overwhelming majority of farmers actually needs is not freedom from mandis, but more and better-operated mandis. In all these years of travelling and meeting farmers, I hear them complain about the absence of mandis or about its poor functioning, but I have never met a farmer who complains about not being allowed to sell outside the mandi.

The second assumption is that the laws would save the farmers from exploitation by the commission agent (‘arhtiyas’, in north India). This assumption is also unreal, not because arhtiyas don’t cheat farmers but because big agribusinesses would not get rid of middlemen. Big companies simply cannot deal directly with thousands of farmers; they need someone to aggregate. In all probability, the same arhtiyas who worked in sarkari mandi would offer their services to the private agribusiness that sets up a private mandi. So, the farmers will suffer two layers of middlemen in the new private mandis: the bad-old commission agent plus the new corporate super middleman.

The third assumption is that the market would function in a fair manner, so that farmers would get a slice of the additional profits made by stockist or trader thanks to greater efficiencies, larger volumes and lower costs in the new system. But no one has explained the basis for this very benevolent assumption. Why would the private traders wish to part with any additional profit they make? Why would they not collude to deny the farmers a fair price? Why would they not resort to ‘agri-business normalisation’, offer good prices for a few seasons and then squeeze the farmers? That depends on the bargaining power of the farmers. Currently, the farmers are very weak vis-à-vis traders and mandi officials, but can occasionally arm-twist them through political representatives. In the new system they would lose even this limited clout. The dispute resolution mechanism proposed in the new laws is a joke. The economists put their faith in the emergence of farmers cooperatives (Farmer Producer Organisations, in the official lingo), but that will take years, if not decades.

The fourth assumption is that the government will maintain and enhance its investment in agricultural infrastructure. Nothing can be more naïve than this. Farmers understand it better than the economists that these three laws are not just policy measures; these are signalling devices. The Modi government is announcing its intent to withdraw from agriculture in terms of investment, regulation and extension work. Private players would invest in warehouses and cold storages, so the government can step back. The real point about the creation of a “trading zone” outside the APMC is not the opening of private trade (because trade within the APMC is almost entirely private trade) but of unregulated trade. We are shifting into an unregulated and non-transparent trade in agriculture with no mechanism to record, collect and collate data, and no requirement for registration of traders. And contractual farming would be the perfect excuse to withdraw from extension services as well.

Also read: Rich farmers dominate farm protests in India. It’s happening since Charan Singh days

A signal to farmers

The farmers can read the writing on the wall: retreat of the state means loosening of the little influence they occasionally wield. They have heard about the recommendations to step back from procurement. They can visualise the consequences of dismantling of APMCs; they can smell the withdrawal from Minimum Support Price. And they know about the latest decision to ban export of onions as a sign that the government will never hesitate to step in when farmers might stand to make profit. They read political signals better than economists.

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

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  1. It’s really sad to see paper pushers and keyboard BJP warriors supporting government which has failed in implementation of every one of its unique policy leaving country and its citizens helpless and hapless

    These are the same lot who were crying was fuel proces was 70 rps per litre now cannot muster courage for 90 Rs litre.

    People who haven’t planted a seed are commenting about farm bills

    • So you think Prof A. Gulati, Swaminathan Iyer and others who favour the laws are “keyboard BJP warriors’ just because they support the laws. By that logic, Congress also went into the last elections on behalf of BJP because it had something very similar on their manifesto? And what about those who are opposing? What are they, paid agents of some hostile country? Who says what is there in the name?

    • For your information, today I heard a Kashmir Rajyasabha MP from Mahbooba Mufti’s party praise the prime minister during his farewell speech for some of his work. Now classify him as a “keyboard BJP warrior’ and issue a fatwa.

  2. Any reform these communist and socialist guys start running on roads shouting dooms day arrived. When Rajiv Gandhi introduced Computers in banks and Govt offices these guys did lot of strikes and bandhs stating that computers will take away the jobs.
    When Narsimha Rao opened up economy these same gays did same drama and tried to sell fear of foregn companies taking away our economic freedom and indian Indsutries closing their shutters as cheap and better products will be flooded by developed nations. They also predicted Indian Currency will collapse as imports will sky rocket and exports will reduce drastically.
    I don’t know how these guys had reacted when buses were intruduced. I am sure they would have cried for horses and did road blocks with horse carts and bullock carts.
    They want all to be controlled by Govt like China and USSR did and want govt to act like a communist regime. But when Govt tries to take away 1% of their freedom as against 100% in communist regime, these guys will start fighting for democracy . Very strange guys.

    • the government will implement within the next month a law that all salaried desk bound jobs will be auctioned and given to the lowest salary bidder. Totally capitalistic idea

  3. The article written by Mr. Yogendra Yadav is full of misinformation, disinformation, fact twisting, radical socialist ideology, mindset want to remain in colonial regime.
    After reading people can justify the protest to bring back English raj.

    APMC Act was made by British to loot the raw materials of Colonies they rule at cheapest price. MSP was initially offered by Allaudin Khiliji to purchase paddy for their soldiers through out the year at consistent price even during Famine. Then again introduced in 1960s for helping Green Revolution.

    At this stage these laws are outdated and keep us in colonial era business mode.

  4. This part time politician, part time psephologist, part time activist, part time farmer will quote experts when their opinions suit his narrative, if not he will write opeds to discredit them. I don’t know why media gives so much importance to this prick!

  5. Desperate socialists like Yogendra Yadav will never be able to reconcile to reforms….The socialism that helped India deliver the famous Hindu rate of growth of GDP til 1991 is what likes of Yogendra Yadav would like to revert to. Vested interests with income from APMCs will naturally support socialists like Yogendra Yadav to try and block Agricultural reforms. But, India has already moved onto the reforms path. Socialism is dead and needs to be buried.

  6. I am a small coffee and pepper planter. I do not sell my produce in the mandis or open market because these facilities are not open to us. I have to sell to the middlemen who gang up together and control the prices. The new Law I believe has not abolished the mandis (according to Yeddiyurappa’s statement.
    I do feel that the big trading houses will appoint agents who will arrange to purchase farm produce directly. Indian traders and businessmen generally adapt to the laws of the Land. It remains to be seen if the new laws are going to benefit the farmer.
    I dont see why the NDA Govt will go out of its way to hurt the farmers who are important vote banks. It would be suicidal. I feel the agitations are politically motivated and take place only in States where the opposition is ruling them.
    I am apolitical and so am not willing to accept that the Govt has created problems for us. I would like to wait and see how I will be affected once my crops are ready for sale

  7. Tbe ONLY person who will understand the plight of the v farmer of Punjab & Haryana, is a farmer who has experienced the “sense of security” derived by farmers in these two states in particular, from the Procurement System. MSP has always been suppressed, to control food inflation, so it wasn’t as if the a Central Govts were very generous to wheat & paddy farmers. It was only the security derived from procurement that drove them to higher & higher levels of productivity. By kicking the farmer and his family in the gut, Modi has laid the ominous foundations of a Revolution of the Proletariat. The very thought of a popular and elected mass leader, being so apathetic and unrelenting towards 50 per cent of the Indian people, is frightening enough. And lo & behold, it is actually happening.

    • Revolution of the proletariat?!😄😂
      The proletariat of the green revolution are the bihari farm labourers, who are both treated as shit and far from any revolution. They have learnt their status way before they were thrown on the streets during the pandemic.
      A revolution on tractors bruv!; in a country where 87 percent of the people dependant on agricultural income are small farmers, basically not owning more than 5 acres of land and also do not own a tractor. Procurement in Bihar and Jharkhand by FCI is zero of almost every cash crop; two states which form the bulk of proletariat.
      The truth is most of the FCI budget, besides being a train on the whole budget, goes into procuring wheat and paddy, produced in surplus, from Punjab and Haryana from fat and semi-fat farmers, whose lobbies are institutions in themselves. No government can dare try to shake this institution and shift this budget to poorer regions of India, where this procurement would have made any sense.
      The most ludicrous part is how saffron and red flags are competing to mark their territory, construing it as an ideological battle with preset narratives and agendas.

  8. Generally I do not like Yogendra Yadav or his views. But, for a change, he is right when he states this: “not because arhtiyas don’t cheat farmers but because big agribusinesses would not get rid of middlemen. Big companies simply cannot deal directly with thousands of farmers; they need someone to aggregate. In all probability, the same arhtiyas who worked in sarkari mandi would offer their services to the private agribusiness that sets up a private mandi. So, the farmers will suffer two layers of middlemen in the new private mandis: the bad-old commission agent plus the new corporate super middleman.”

    There is urgent need for the Government to suitably modify the law to prevent cornering of the farmer by powerful middlemen and corporates.

    In Karantaka, even under APMC regime, there is electronic platform set up as a JV between Government and National Comodex, on which the goods are auctioned, after the price is aproved by the farmer. Delivery order is issued only after the money credited to his account.

    • This is already evidenced in the e-choupals set up ITC over last 20 years to secure their agri supply chain

  9. Yogendra Yadav cites Jean Dreze – a poverty peddler carrying the white man’s burden – to rest his case.

    I laughed so hard I rolled on the floor smashing a tomato — proudly grown by a humble farmer.

    Not a single article by the commentariat in our press on how the size of land holdings is getting smaller and smaller after every generation. Does not make it worthwhile to invest in better faming.

    There is nothing noble in farming. Most farming is done at subsistence level. If agro industries come up after the new farm laws, most would gladly sell out and abandon farming and get jobs in these agro industries, thereby also consolidating farm plot size..

    • He has worked more for poverty and hunger than what you our yr generations can imagine. But then, encouraging and rewarding stupidity is wt modi’s politics is all about.

      • Ashok Gulati has done more research about farmers than your previous 10 and next 10 generations will ever understand. But a left wing nincompoop like you wont understand it.

      • Ashok Gulati has done more research on this than you will ever do. But then, someone’s whose morning starts with complaining about Modi and night ends with complaining about Modi wouldn’t understand it.

  10. The whole article is assumption based. Firstly, APMC mandi would exist and second, even today lot of trade (75%) happens outside APMC so where is questions of unregulated trade. The agri commodity prices are purely driven by demands and supply and is very price elastic, hence why corporates would keep middlemen he can have simple have salary based. The fact is with increase numbers of buyers especially retail side or would help both farmers and consumers a lot. If trader wants to keep stocks definitely be has an view on prices and accordingly he would buy even at higher rate (I personally did this), it is very logical. So, all new law is farmer oriented and would help them.

  11. There will always be naysayers in life. There were British naysayers as well like Winston Churchill who thought that defeating hitler will solidify British empire but in reality, his war with Germany cost Britain ita empire. Similar is case with Yogendra Yadav who refuses to read writing which is already written on the wall. What BJP promised in their manifesto, they’re implementing it word by word. As a foremost psephologist, he didn’t see modi victory in 2014 as well as 2019. Same with farm bills. Raising boogeyman to avoid impending reforms is age old tactic used by conservative people. But surprisingly for a last few years, many so called left liberals have raised one boogeyman after another. Some even went to extent of calling Chinese app ban as a jumla but in reality, Modi Government has hurt China where it hurts the most. As conservative forces couldn’t stop globalization in india similarly corporatisation of agriculture is impending and long standing need. Those people who advocate for farm loan waivers must understand that fiscal autonomy of our government decrease with every such thing. So agriculture must be autonomous sector and since we are not India of 1960s and are net exporting country in terms of agriculture, our agriculture exports must meet international standards and who better than those companies itself to implement those standards in Indian agriculture. At the moment, nobody in this generation wants to be in agriculture field and these laws will change that. For Agriculture sector to become profitable and self sustaining these laws are essential. The thing is that alacrity shown by Narsimha Rao government in bringing economic reform was not shown by any subsequent government until Modi-2 term. Ideally, these reforms should have been brought with economic reforms only but status-quoists powers prevailed. Time for status-quo is over in today’s ever changing world. If we had stuck to status-quo in telecom sector by banning jio when it arrived, we wouldn’t have such strong IT infrastructure and online classes today. Since data is cheap now, we could easily get through lockdown and could also work from home whenever it was possible. My point is that Jio brought along with it a paradigm shift in telecom sector and same can be done with agriculture. Established players like APMC and state governments will definitely face losses but state governments should think about money it will be saving as farm loan waivers will no longer be needed. As for MSP, I don’t think government has any intention to reduce or abolish it but farmers ( those who commit suicide due to APMC corruption) will be very happy with it. No protest in Maharashtra, especially Vidarbha tells you that those farmers which are prosperous ( from Punjab and Haryana), don’t want other less fortunate farmers to increase their income and want farmers suicides to continue in country. I remember statement of Sharad Pawar where he said nobody talks about farmer suicides anymore and he was right. Affluent faers of Punjab and Haryana don’t commit suicide. They want other small and marginal farmers to commit suicide so they can prosper. The protests should be treated as abatement to suicide and Opposition wants farmers to commit suicide and play politics over it. In the conclusion, I would just say that new india likes these farm laws and they have potential to make agriculture as viable career option if their implementation is good.

  12. how stupid can these economists be. it will always be the middle men who make real money. how many of the indian farmers do they think can afford not sell their crops as soon as possible. dream on.

  13. If we have to believe in what YY says, then we should go back to golden days of socialism/communism! The only way to pass these bills was to bulldoze them through the two houses of Parliament given illogical oppositions spearheaded by people like YY,

    With passing of the new bills, we should encourage FPOs along with Amul type cooperatives for setting up new Mandis or cold storage or extension services. Contract farming can be a game changer when farmers of a villages come together and deal jointly with the corporate or cooperative buyer.

  14. The only part to read in this article is Myth Vs, Reality. Here author puts his arguments really against the bill rest is against Individuals. Now coming to to the arguments – 1. MSP, Mandis and APMCs are going to continue to exist 2. There is addition of a player in Agri market – This is going to be situation in first place.

    Assumed assumptions – 1. Farmer is forced to sell or he does not have choice : Given there will be additional player how does this change. Whether States cannot start new APMC under new act?
    Further what this author hears and whom he has met does not make “fact of the matter”. Farmers need better mandis, who stops state from making mandis better.
    2. Exploitation by commission agents – I do not know if new player will pay the margin of broker and then has own margin, how will there be any profit customers not going to pay any extra price. This is too imaginary and will not unfold like YY imagination.
    3. Extra pie to farmers – Only time will tell. But addition of a player will not reduce their pie. It can at best reduce pie of brokers.
    4. Investment in sector – Let’s not be naive that govt can really make all these investments and farmers can wait for that to happen. So actually government cannot invest and it needs private investment. Why more goverment is required? We do not see it benefitting farmers.

    • A good analysis.

      I wonder why some “experts” (self styled?) write obliquely without any purpose other than to oppose. I am certain that experienced individuals like this author can positively contribute to Nation building without a prejudiced approach and avoiding personal attacks.
      We expect better from some of these talented Indians.

  15. yogendraji
    how come you are an expert on everything ranging from taxation to finance to agriculture to foreign affairs to politics?
    only thing i have not heard you talking about is cricket.
    how about another article explaining how gavaskar does not know anything about cricket in india?

    • That position, expert on cricket, has been appropriated by Shri Ram Guha, who solved all problems in the game, past, present and future and has moved on. Shri Yadav probably considers all other sports, below his stature to comment upon.

  16. its quite easy to find faults or deficiencies in any new policy change initiative, but the so called experts never come out with their suggestions on the possible solutions that they would recommend. Either they do not have the wisdom or the understanding to give any profound solution or they are just having vested interests to oppose any change initiative. Is it not worth trying something with good intentions and falter if at all, rather than not doing anything and continuing with the age old policies and just criticizing.

    • Capitalism sucks, Mr. (India) Vikas. Rich will get richer and poor, poorer, not because they won’t have the facilities, but because they don’t know how to use those facilities to their advantage.

      Why? Everyone in the country is being taught to hate their own country’s citizen. And if not that then Pakistanis and now Chinese. That’s dumb propaganda, because both India and China were poor and populous once (1980s), but now China is rich and populous while, India is poor (relatively) and populous.

  17. Shri Yadav still dreams of becoming the Chief Minister of Haryana, much in the same manner that Shri Kejriwal dreams of becoming the Prime minister of our country. It is therefore not at all a surprise that he takes a position to support the farmers of Haryana and Punjab. If indeed the past system was such a great success, then why farmers in rest of the country were so poor? Why was there no opposition when the present laws were ordinances? And any thoughts around the fact that food prices may come down if MSP is set rationally and not politically?

  18. Yadav’s arguments are based on some nonsensical fiction about farmer and farming.
    Here is an accurate summary of his arguments: Because Congress governments never ever did anything right; Because Congress governments talked about benefitting the poor, made unimplementable laws and then ensured that the poor were squeezed by the rich; Because we support only the Congress government kind of government. Hence we oppose Modi’s initiative to create an institutional system, a system of laws, which will actually free the poor and the rich and all other Indians from the shackles of badly crafted and badly implemented laws of Congress origin.
    Sorry, Yadavji. This kind of argumentation will not work any more.
    My father is a ‘zimindar’ as they call a landholder in Punjab. He never worked in the fields. Neither did any of his brother. But they all benefited from being zimindars thanks to the policies of the Congress. Earlier they were all communists. Then they became SAD/Congress supporters. He was a firm believer in the Congress system. He benefitted tremendously from it. I have inherited many of those benefits. They all were, and still are, based on squeezing the poor cultivator in the name of helping them. Please remember a small detail: the cultivator is not the zimindar. He is just a fellow who hands over money to the zimindar who actually does no work. The new system that Modi is bringing about is something that we have all talked for ages in our village– that this is the sort of system which will help the poor farmer currently enslaved by the zimindars.

  19. The author writes: “Why would the private traders wish to part with any additional profit they make? Why would they not collude to deny the farmers a fair price? ”
    Well, that is not how private sector i.e. capitalism works. Why haven’t Airtel, Vodaphone and Reliance Jio colluded to raise price of mobile calling and data? Instead, each is trying to gain market share from the other and the consumer is benefiting.

    • Don’t celebrate there are only a couple of players now but when there remains only a single player the tables will be turned on the users.

  20. The taste of the pudding lies in eating. Certainly a realistic and convincing article devoid of any economic jargon. The knowledge of ground realities to the author makes his presentation authentic. The new rules are aimed at destroying APMCs since no taxes will be levied outside APMCs. As seen from the experience abroad, the new system would lead to monopoly or oligopoly. The reality of “benovelence” of Indian business houses is no secret vis-a-vis other countries. We also have the example of domestic milk producers, who have free access to the so called open markets. Their penury became well known more recently when they were just getting Rs 17-18 per kg for their milk.
    Kudos to Yogendra Yadav for this piece. He showed the courage to speak the truth no matter what the Indian experts say.

  21. I don’t agree with Mr. Yadav on this issue. However, Agriculture is in the concurrent list of the Constitution and both the Centre and states enjoy the power of legislation. The bills , therefore, should have given freedom to states about implementation of the legislation in their respective state. This could have removed the opposition to the bill. The Centre cannot impose its will on the states, even if it thinks that these legislations are in the interest of the farmers. If the laws are successfully implemented in the states which are amenable , the farmers in the opposing states will persuade their governments to change their views. Furthermore, I am of the view that these bills pose both opportunity as well as threat to the farming community. The fear of threat of suppression by the corporate sector should not deprive them of the promised benefits. I suggest that farmers should form unions and these unions should, after a thorough collective bargaining, have a legally binding contracts with corporate entities. This can offer protection to farmers.

  22. If the present exiting system of marketing , sale ,storage , pricing of agricultural products as designed and implemented under the DOCUMENT TO PERPETUATE POVERTY IN INDIA ADOPTED AT AVADI session of Congress in 1955 /6 to capture , control and manipulate commanding heights of the country was sacred document, than why year after year, in state after state , in village after village WHY farmers were committing suicide ? were they doing so to honour the memory of those Congresmen who strangulated India economic growth and kept whole of India poverty stricken ? Can you say new bills close old and existing system of sale , procurement , pricing ,for ever ? India is democracy. If you communists ever get majority , you are empowered to this type of farms bills, CAA , etc. Wait try to get people mandate . Then you will be free to make India clone of USSR or China, North Korea , whichever communist system you love and adore.

  23. An article full of far fetched assumptions and fear mongering. The arguments presented are eerily similar to the ones provided when computers were being introduced in India (computer will eat your jobs people, resist the evil computer corporates!!) or during the LPG economic reforms of 1991(rich corporates will make indians their slaves and recolonize India blah blah ). I’m not surprised that we are receiving these arguments from the same guy who demanded the government of India to nationalise all private properties (I don’t want the government to take away my Motorcycle and my house).

    “Corporates are the big evil and government regulated markets are the best”.

    If the government regulated markets were so good, why are the Indian farmers still living in extreme poverty? Why do only 6% of the Indian farmers get MSP? Isn’t that a massive failure of the current system? About 25% of the produce procured by the FCI can’t be stored correctly and as a result, it is wasted. Don’t get me started on the Ahrityas and their corruption. Unless we get private investment in Agriculture, which will result in more cold storage facilities along with better farming techniques and of course a remarkable consolidation of small farmer owned lands, our farmers will still be stuck in poverty and not witness any growth.

  24. what a fiction filled article completely bereft of facts and all based upon presumptions. Easch line of argument can easily be collapsed. Mr. Yadav readers are much more mature than your imaginations

  25. You have used some sophisticated word to make this article look like some analysis. In the plain language it is just hearsay and rumor mongering. Yes the problem is lack of Mandis, but expecting government to setup efficient mandis will be a miracle. It is like expecting why government cannot come up with a trading platform like Amazon. We have seen in past all the business that governement has taken in its hand are actually doomed to disaster. Be it telecom, Media or Factories. Private player run the things better and that is the matter of fact. And also it is not the they do by paying less, They work with a sense of purpose which is missing in government controlled businesses.

    • The irony of all this protest against the ‘private sector’ by YoYa is that mandis / APMCs are ALSO PRIVATE TRADERS. The MSP concept had to be introduced by the govt to compensate farmers who were chronically not given fair price for their produce by these traders cartels. The bills allow farmers to sell to private corporates (or anyone else) or these private mandi traders. This is no different than the choice of retail corporates v/s Lala shops. The way that has changed the Indian economic scene, this also will.

  26. This is an absolutely correct reading of the implications of the bill. We don’t need to speculate because we have a real life experience in the way petrol has been handled. When the government informed us that it will no longer regulate/interfere in the petrol prices and that it will be based on the international oil prices, the argument was similar…. but now we see that while they are increasing the prices when the crude goes up, the prices never come down when the crude drops steeply.

    • God oh my Dear God
      Even Y Y has following

      Please enjoy this comment. “Yogendra Yadav is THE MAN. He teaches politics to Modi and Rahul. He advises the Delhi Police on how to carry out an investigation into communal riots. And he lectures on agricultural economics to Prof. Ashok Gulati.
      I really would not be surprised if he were to point out loopholes in Virat Kohli’s batting technique tomorrow. And also suggest remedial measures for the same.
      Or maybe teach development economics to Prof. Amartya Sen.””

    • Yogendra Yadav is THE MAN. He teaches politics to Modi and Rahul. He advises the Delhi Police on how to carry out an investigation into communal riots. And he lectures on agricultural economics to Prof. Ashok Gulati.
      I really would not be surprised if he were to point out loopholes in Virat Kohli’s batting technique tomorrow. And also suggest remedial measures for the same.
      Or maybe teach development economics to Prof. Amartya Sen.
      Very good

  27. The only thing to “understand” about Indian agriculture scenario is that there is a lobby of people like some opposition parties and Mr Yadav here who are happy to see continued poverty, dependance and bondage of farmers to corrupt politicians and even more corrupt “commentators”. These steps by the government to reform the moribund agricultur and labour practices should and would be welcomed by honest citizens.

  28. The APMC,the Mandi.and the MSP are still there.Why imagine their absence,when such a contingency is not in the horizon. If the farmer wants to exercise his freedom to go beyond the Mandi,let him.At the least,the farmer saves the middle man fees and the Mandi Cess that the State Govt. collects.

  29. The 5th assumption which is that “Markets” will even out much of the imperfections does not find a mention in an otherwise well written article.

  30. Sir, If we start with the basic fact the plight of farmers have worsened since independence while we have become a surplus country in agriculture production, clearly there is need to change the current procurement safety nets which in fact seem to have exploited the farmers who is supposed to help.
    Why do we feel that government can fix it!!
    Tell me one area it has been done successfully.
    Food distribution to poor
    Health care
    Show some good examples to convince status quo is better

  31. Yogendra ji, if government makes more mandis, all problems will be solved? Mandis will be controlled by agents and cartels of politicians like they are now. Plus all crops are not covered under MSPs.

    Option of introducing private players will lead to competition even for the agents and mandis . You are so alarmed and pessimistic that gov is dismantling a perfectly amazing system which worked for farmers and introducing a new system which will destroy farmers. They are already destroyed. But these laws might give them a hope for better future.

  32. Oh Really?
    If farmers are smarter and wiser than economist (which in prose you deny) then why are they poor still.
    Why do they commit suicide in thousands?
    The author has poor knowledge of economics and even poor knowledge of ground realities.
    He is looking at farmers only from the perspective of Haryana and Punjab.
    If one starts to comment on logic(or lack of it), will extend in pages.
    So, good luck to your endeavor

    • The farmers are poor because govt doesn’t allow them to get a fair price in the name of protecting urban middle class, read this along with periodic ban on export of agricultural products..

    • My friend Hitendra, what you are doing here is called “thethrology”. Economist are wiser, yes. Why make a Chai-Wala the highest executive of 135 crore nation? Why the only criterion to choose the highest executive who directly affects, more than anyone else, the life of 1.5 billion, is that “weheter you like him or not”, I mean our sense of liking someone. Not honesty is a criterion for PM otherwise MMS would still be PM, not cruelty is the criterion, otherwise Indira Gandhi wouldn’t be re-elected after Emergency with massive mandate, not magnanimity is a criterion otherwise Atal ji would have been re-elected as well. Not corruption is a criterion otherwise Lalu or all others wouldn’t have enjoyed several re-elections. The only criterion is “whether you like the man or not”. Intuition is always the leader to logic. Why hindus ( educated, rich, poor, illiterate, blind ) fear Islam? Intuition! Why their is a prejudice of any kind at all, intuition. All kind of discoveries of any kind by human civilisation is due to intuition of our mind. Logic is what we call the the correct intuition or the most fundamental intuition. Then we prove something, which we already know, through intuition by logic (set of most primary intuition). We know that all isosceles triangle have equal base angles through intuition only. But we also prove it by logic for reassurance to further the foundations of a theory.

      Economics is the most pseudo-scientific of all academics. Our mind is designed to act most efficiently. What we call “stress” is fundamently related with a sense of loss of any kind. No calculation is required. Similarly, What we call “happiness” is fundamentaly related with our sense of gain of any kind. Even a rikshawala knows what is happiness and what is stress, because his mind can do all kinds of calculations of gain and loss for him, for his survival.

      Farmers are poor because they are not privileged. But go try to persuade a farmer to buy a bogus insurance scheme or a product, or ask for vote. You will know, when you fail miserably, about the intelligence and independence of human mind when it comes to decision making about his own welfare,

      Farming is a poor sector because it is the most basic and primary sector. It is the most basic of all type of production or industries. Every other kind of sector is secondary to it. The security and essence provided by farming to human life is unmatched. And that’s why it has the largest number of stake holders. When a sector is overcrowded its entities are generally poor. Foolish Hitendra.

  33. John Drexel and his ilk follow the principle “Speak always about poor, exploit the poor and keep the poor always poor”.
    They are western mercenaries in disguise to stunt the growth of India.

  34. Convincing arguments indeed. This is what happens in the West. Big business exploit the farmers, big or small. This will mainly benefit the corporates. the only way it can aid the farmers is if they form co-operatives. How can the govt help in that. Does it want to. Why no law/rules for that in these laws. Every state should have a co-operative body like Amul. Maybe ask Amul to manage/guide in setup? Farmers will suffer if left to negotiate as individuals. Why farmer bodies were not consulted. Reform is/was needed but in this form. Why cant any govt in India do the right thing..

  35. With all due respect to Yogendra Yadav, this take that reforms of the agricultural sector is bad for the farmer rings very hollow. The Bill is same as the Ordinance passed earlier and there was no hue or cry about that.

    Our agricultural policy aside from gaining unequal self sufficiency (Punjab supplies 25% of cereals with double cropping – source of them smogs in Delhi) is largely a failure. It has maintained a monopoly, APMCs and Mandis are neither transparent nor do they function they way they are intended to function. Rife with corruption and underreported stocks. MSP is a drain fiscal resources. Farmer are still poor, suicides have been up, consumers have suffered from APMC mandated monopolies (you can’t get produce outside of district or state lines). We can’t even export non cereal produce like Mangos.

    Sure, you still need aggregators and intermediaries, but with increased competition both farmers and commission agents can have a shot at better standard of living and income (agents don’t have to abide by Govt’s meagre commissions, farmers can shop around for intermediaries for better sale prices). Contract farming if done correctly will provide farmers with steady source of income and seeds. It might bring some resilience into farming sector too, give cooperatives a chance to run their own intermediaries just like Amul.

    There will be losers, as is with every kind of reforms but it’s worth paying the price. Punjabi farmers will now need to innovate and move up the value chain and that’s a desired price to pay.

  36. You’ve laid out what you perceive to be the problems with the recent farm bills (although I do not agree with most of them), can you offer solutions as well.

  37. Mr. Yadav I find it incredulous that scholar such as yourself would be unaware of that most unkind unforgiving but most brilliant phenomenon that ultimately makes any open economic system a growth engine: competition. The best example of that is our telecom sector, where for all that may ail the companies the consumer is the king. Why? Because the sector is price sensitive. Would food sector be any different in its price sensitivity? I don’t think so. The competition would prevent any one corporate entity from abusing the farmers. While contract farming would provide price stabilization to both farmers and the corporates. Every human being and entity is here on this earth for profit Mr. Yadav. Albeit form of profit differs for all. There is no problem if the system is made truly open where government’s only job is to prevent anyone distorting it’s openness. The problem starts when leftist doyens such as yourself give long sniff over your stiff upper lip and say: let me show humanity how it can be better. If history has taught us anything, it’s that a system that stifles natural human tendency to grow and progress fails without fail. Yet we have left bhakts such as yourself always around to say: wait, I can show you how to be better than the humans you are. Have you crossed that bridge yey Mr. Yadav?

  38. Yogendra Yadav is THE MAN. He teaches politics to Modi and Rahul. He advises the Delhi Police on how to carry out an investigation into communal riots. And he lectures on agricultural economics to Prof. Ashok Gulati.
    I really would not be surprised if he were to point out loopholes in Virat Kohli’s batting technique tomorrow. And also suggest remedial measures for the same.
    Or maybe teach development economics to Prof. Amartya Sen.

  39. Please for God’s sake do not poke your nose everywhere you are not expert. We know how much insight you have on subject of your expertise in your earlier profession and how true writings on the walls you have been reading since 2014. Your policies are the kind India followed since 1947, ‘ For the Rich but in guise for Poor’. Your fear mongering on migrants in initial days of Lock down has now caused rampant COVID infections across the country. Now you are again fear mongering on Farmers Rights but basically you are supporting ARHTIYAS. Your hatred for Modi has reached the stage where you are hating everything which is good to India. If you get some time, go and read old news about BOMBAY CLUB fears on liberlaization in 1990s.

  40. Dear Yogendraji, Your article provides compelling points against the farm bills. But I don’t understand the protests against the bill as there is no change in the existing system. The farmer has just been given an additional avenue to sell his produce. If the farmer thinks the Mandi system is better then he/she can continue with it, isn’t it?

  41. I just read Ashok Gulatis View on Express. I can only see that its a matter of Ideology of scholars and most of the states in south are mostly uninformed about these amendments.

  42. If only 25 percent if selling is thought APMC and rest is out of it then what exactly is the issue with new bills?

  43. So wrong. YY ji is back with his red book. More and more state intervention. I caj visualise him as a benevolent God whose only power is to bless people with more state interference and state control. Let’s come to the article. I have respect for YY ji because he seems to care for the farmers genuinely. But like they say, the road to hell is paved with good intentions. Certainly true for most of our economy before 1991 and even now for our agriculture.

    His criticism of first assumption itself is wrong. The fact that most farmers anyway don’t sell it inside Mandi is not an argument. The fact that it is *illegal* is. And that can’t and should not be illegal which is what has been addressed in these bills.

    Another, YY ji argues that the farmer will not have any bargaining power whatsoever if any private corporate comes in but argues that he has it against the traders occassionally. So he accepts that the present system is not right. Look when an organised private corporate comes, it is easier to book them for any violations than you can book unorganised cartels of traders. You can argue for a better dispute resolution mechanism.

    Another, about govt investment in agri. This comes back to the old argument of socialism vs free-market. Are you all nuts? and how much more does the avg income tax payer need to suffer? Do you guys invest anything at all in health edu infra? No. Now you want govt to invest more in agri? Making roti from wheat and sauce from tomato? Are all nuts? When there are soooo many food agri tech startups and entrepreneurs looking for more opportunities you want the govt to do more? Everything which a state has to do (law and order, defence, edu, health, infra) is shambolic in India and you want the Indian state to now put in more money in agri?

    Tell you what, instead of condemning our poor farmers to guaranteed poverty in this perverted shackled state control regime which will definitely keep them poor and at the same time sap the taxes without any benefit, make them move into manufacturing. That will be the greatest gift.

    These bills are a starting. Now the govt can form ppp models for infra development, food processing and the prices will stabilise. Please don’t put forward the same old failed concepts of socialism and state control. Please. Do india a favor and accept that socialism never worked and give our farmers the freedom and the avg taxpayer good law and order, health and infra.

    Yy ji, a political advise. I know that farmers are still a major constituency. But be assured there is a wave of new middle class raising and we hate socialism. The sooner you give up your red book, the better it is for you politically. The followers of that book have never done anything good and can never do anything good. Nehru and Indira condemned india to abject poverty. Mao and Lenin killed millions directly. No Country with state controls has ever prospered.

    Give these reforms a chance. The initial hiccups can be looked into. Fine tuned here and there. But broadly accept the idea. Imagine the potential. Despite such horrible agriculture system, we managed to grow 6-8%. Imagine the possibilities if we make our agri competitive. This is the first step. Push states and centre to do more from this step. Don’t undo this step. Or you’d be the status quoist condemning our farmers to the very system that’s been forcing them to suicides by 100s.

    • being an ass is easy than being a socialist,

      Give these reforms a chance. The initial hiccups can be looked into.

      5-10 years we are talking about millions of families . why not come out with pilot project first and then get all issues sorted before assuming hiccups are easily solved , LARR bill 2013— 2020 still we are not clear, thousands of lives involoved. Same will repeat here.

      5-10 years later if corporates start exploiting the farmer , and with out any industry base in the country wont the burden on sate will be double ?

      Fine tuned here and there. But broadly accept the idea.

      Idea badly excecuted is going to cause more pain.

      Imagine the potential. Despite such horrible agriculture system, we managed to grow 6-8%. Imagine the possibilities if we make our agri competitive.

      100% agree, next 1 trillion should come from agri, no need to be socailaistic, realsitic ground level hearing will help, better stanadrd contracts, standards, fast track courts, vernacular apps needed .

      This is the first step. Push states and centre to do more from this step. Don’t undo this step. Or you’d be the status quoist condemning our farmers to the very system that’s been forcing them to suicides by 100s.

      The system is lack of credit. PM kisan is a tiny solution , but thos who hate socailism supports such schemes .

      PS : on the other note all the comments are from uppercaste privileged people who have no clue about ground reality , how many of you will be here 5-10 years down to line to defend your own comments ?

  44. May be Ashok Gulati knows and we who are not farmers but other professionals and social activists, at the forefront of the manufactured “agitation” do not know.
    Opposition does not literally mean opposing everything. In a democracy progressive reforms can’t be done with consensus. There will always some who will not benefit economically from these reforms. Their economics may be entwined with their politics because it is a democracy. It does take courage for any democratically elected Government to push through reforms in the face of seemingly diminishing popularity.
    Tailpiece: Is it called NTION first, party next? Just asking

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