Farm Bills set off a new winter of discontent


The protests against the three farm bills are too big to be drowned by news feeds pursuing Bollywood women who had allegedly smoked weed years ago. For three days Punjab has been paralyzed by ‘rail roko’ agitiations.

On Friday morning, 31 kisan unions joined the one-day strike in the northern states; and the reverberations might trigger protests among agricultural communities all over the country. Prime Minister Narendra Modi has dismissed the stir as sparked by Opposition misinformation. Eliminating the middlemen is the intent.

“Farmers have been given new independence in agriculture. They’ll now have more options and opportunities to sell their produce,” he said. But a closer look shows that a bankrupt government wants to exit the expensive agricultural support mechanisms soon as possible, in favour of the ‘open’ market.

Heavy-handed process

Steam-rolling the three bills through Parliament was easy, but it has offended many, even its long-standing ally, the Shiromani Akali Dal (SAD). Calling them the ‘Bills of Ingratitude’, SAD President Sukhbir Singh Badal, has come down on the NDA government heavily for side-stepping a consultation process with farmers and for brushing aside the ally’s repeated request to incorporate guarantees of a ‘Minimum Support Price’ (MSP) and an ‘assured procurement’ process.


At a broader level, these three bills are part of the inexorable march to a unitary form of government. More immediately, they represent the process of gradually eroding the powers of state governments and making the Centre all powerful. In the separation of powers between the states and the Centre, agriculture has always been seen as the turf of the state governments. However, in the new Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, the central government is empowered to frame rules to govern the sale process outside the markets (mandis), now the prerogative of the state Agricultural Produce Marketing Committees (APMCs).

The APMC mandis are ‘local’, deregulated bodies that have evolved over time, and have proved successful in many states. They are designed to ensure that the small farmers get the best deal for their produce and they do not have to travel far, saving transport costs. With the new act, the attempt is to control what is best left to local bodies.

While the Farmers Produce, Trade and Commerce Bill seeks to dismantle the mandi system and open out the agricultural markets to private players, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 provides a framework for contract farming. The new regime will allow farmers individually or collectively to reach agreements with traders, wholesalers or exporters to produce particular types of crops. Farming contracts will also dictate remuneration and production periods.

End of the safety net

This will eliminate the safety net of the minimum support price (MSP) guaranteed by government at the local market, and will throw the large body of small farmers into the hands of big businesses seeking food supply chains for their retail networks. An ‘open’ market system works well when buyer and seller are evenly matched, and the farmer has scaled up to large production tracts. However, with 86 per cent of farmers in the country still holding less than 2 hectares each, it is necessary they be provided a safety net. Though agriculture contributes 15 per cent of the country’s GDP, 68 per cent of the population lives in rural areas, and about 43 per cent of the workforce is in agriculture. India is still rural ‘Bharat’.

This is perhaps not the best time to open up agriculture to a ‘free’ capitalist market. It is also a significant indicator that, though the government is repeatedly saying that the MSP system and the mandis will not be dismantled, it is not willing to accept the farmers demand that support for the two cornerstones of the old system—MSP and local mandis—be written into the new farm acts. The truth is, as the new open market system kicks in, MSP and the local mandi will slowly disintegrate. The haste in pushing through these bills shows opportunistic intent too.

Through the pandemic, the government is now bankrupt and wants to wash its hands off all price support subsidies. Though only 20 per cent of the essential farm produce is bought under MSP, it still costs the government upwards of Rs 40,000 crore a year. What better way to exit such costly operations than dressing it up as “empowering the farmer.” The safety net of the APMC system, with all its flaws, had given us self-sufficiency in food; and through the public distribution system (PDS), some food security for the poor. With an ‘open market’, we will now see not only the exploitation of the small and marginal farmers but a slow dismantling of the PDS system. Food shortages and wildly fluctuating prices will also be the order of the day for the urban population.

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