On the 27th of September, the President of India gave his assent on passing the three agriculture bills also known as the farmer bills. These three bills include:
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020
The Essential Commodities (Amendment) Bill 2020
Currently, the agricultural sector contributes up to 16% of Indian GDP at current prices. In the earlier decades, agriculture was the primary source for the nation to earn revenue. However, the GDP contribution of agriculture sector has decreased drastically over the last few decades. The chart below displays this trend:
After the Green Revolution that began in the 1960s, the government has made available several subsidies to farmers. An agricultural subsidy is a benefit provided by the government to farmers that reduces their incidental cost of operation and improves income. These subsidies have been extensively used since the 1960s. Additionally government has made a provision to procure produce from farmers at a Minimum Support Price to ensure guaranteed return on investment for farmers. Government also provides electricity supply and irrigation at a much subsidised rates. However after introduction of new farm bills, assumptions and narrative was created around the bill which threatened the farmers because they assumed they may lose these benefits.
Since the 26th of November, Delhi has witnessed mass farmers protestations against the farmer bills. More than 200 thousand farmers flooded the streets seeking abolition of the new agricultural reforms. Highways and roads have been blocked and farmers have vowed to remain camped until the laws are reviewed and changed.
Central government introduced new agricultural reforms in late September with an aim to support farmers and encourage the growth of the agricultural industry. Accordingly, three agricultural bills were passed that provided more autonomy to independent farmers and made the agricultural sector efficient in its working.
Under the first policy, farmers will experience increased freedom while selling agricultural produce without facing barriers for inter-state trade and trade within the state. Farmers will also experience financial freedom because they will not have to pay any levy on such trading.
The second policy allows farmers to trade with corporates in a highly competitive market and make increasing profit for their goods. Price assurance will be given to farmers before sowing seeds and they will enjoy additional profits if market price is high. Thus, the burden of market unpredictability is shifted from farmer to wealthy corporations.
The third policy suggests that government may regulate supply, distribution and trade of essential commodities such as onions, cereals, oils, etc. only under extraordinary circumstances. These circumstances include:
Extraordinary Price Rise
Natural Calamities of Harsh Nature
According to the Procurement Policy, the Food Corporation of India would continue to operate as before and buy food grains from the farmers at the MSP.
The Agricultural Bills aim to reduce the hazards caused by middlemen, encourage trade relations between farmers and corporates and increase technology in the field of agriculture. Prime Minister Narendra Modi believes that these reforms were much needed and will help improve the nation’s farming industry. It will also help farmers enjoy greater freedom and earn prosperity through agro-trade.
If the bills are beneficial for the future of farmers, why are they protesting?
The farmers from Punjab, Haryana and Western Uttar Pradesh are terrified that these bills might be potential pretexts on which the government removes the otherwise lucrative system of MSP i.e., Minimum support Price provides to farmers. The MSP was put into place since the Green Revolution and it helped farmers through the decades to fetch a good price for their produce. Farmers dread their potential future without the MSP system and they are convinced that without it, they might cease to exist. However, the truth is that there is absolutely no mention about the scrapping of MSP in the bills. The government has also reiterated its position that MSP system won’t be abolished. Such assumptions are baseless and have been used to create fear among farmers’ community.
Farmers also fear that the Mandi system will die out because of it becoming optional in nature. With the passing of these bills, farmers are offered opportunities to deal with large corporations and make profits. Thus, the corporates do not need to go to the Mandi for agro-produce anymore. With the mandis being optional, more and more people will opt out mandis causing large amounts of losses for a huge sector of farmers. However, the truth still is that there is absolutely no mention about scrapping the Mandi system in the bills. The bills not only promote the Mandi system but also provide farmers additional opportunities to make profits. The pro-farmers policy of the government was twisted and assumed to be anti-farmers due to the narrative that was created by opposition leaders. In the Mandi system, the richer farmers have a bigger say and can easily negotiate to make profits. It is, in fact, the weaker farmers who fail to conduct negotiations and thus face heavy losses in the mandis due to local tax and charge. The government’s decision to provide other options for such farmers will not only help them receive a better price for their produce but also have the freedom of deciding their supply and distribution without fear of corporates.
Losing freedom and independence of regulating supply and distribution because of contract farming is another myth that has caused terror in farmers. Farmers believe that they might have to work according to the regulations of corporations and might lose their independence to trade and make profit because of it. They may also lose their rights of fixing price for their produce. This myth is causing havoc amidst small independent farmers in particular.
Such beliefs are pure myths. They are not true.
The government has no plans of scrapping MSP. In fact, with the help of these bills, the farmers will not have to bear the burden of market price disturbances. By participating in open market system, farmers will enjoy benefit of MSP as well as profits provided the market price decided by demand-supply dynamics.
The Mandis, too will remain open and farmers will have other places to sell their produce. The e-NAM trading method is functional in mandis that makes the process time-saving and most importantly, transparent.
With the open market system in place, farmers will have full freedom to determine supply, distribution, prices, etc. They will also receive their payments in a maximum of 3 days. The purchasing customer will pick-up produce directly from farms; this saves their travel cost.
What is the real reason behind the protests?
More than issue of protecting interest of farmers, it is about protecting turf for various political and social organisation.
The protestations are an attempt of a group of political and social organisation to showcase their strength by creating a pressure group with a narrative that the government is not prioritising the needs of farmers and is trying to withdraw its funding. It is actually a political issue which has taken the disguise of a social issue. The political organizations are attempting to capitalize on a social issue without being even slightly concerned about the farmers; interest.
None of the above-mentioned assumptions are true and they are used solely to cause political upheaval amidst a pandemic.
“It was never about India or Indians. It was always about them.”
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