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Who will benefit from new farm legislations?

by Annamalai Suriamurthy
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Pamayan, a renowned expert in organic farming and Tamil writer, analyses the implications of the recent laws on farming in this two-part series.
The Union government has formulated three farm legislations — The Essential Commodities (Amendment) Act 2020, The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act — amidst vociferous protests from Opposition parties and farmers. The passing of these laws has triggered unprecedented protests across the country, especially in Punjab, Haryana, Telangana and Uttar Pradesh, by farmers. Soon it will be known whether these legislations, which were passed in Parliament on the birthday of Prime Minister Narendra Modi, are a boon or bane to farmers.

Why should farmers resort to agitation?

The Indian farm produce market is huge, accounting for a turnover of Rs 16.58 lakh crore. About 55 per cent of the country’s population is dependent on agriculture. Today, by these laws, the farmers’ market has been thrown open to MNCs, removing all hurdles.
When farmers raised crops for consumption they were not dependent on the market. But things changed after the Green Revolution when there was a paradigm shift and farmers planned their production with the market in mind. The well-oiled market system got weakened over the years due to corruption and political intervention. Citing the system’s deterioration, there were attempts to hand over public utility farmers’ markets to private players. There are enough lessons on private procurement from Bihar and Kerala. According to a National Sample Survey study, the move to privatise procurement benefited private organisations and not farmers. Maize was procured at Rs 13000 a tonne against Rs 22000 in Bihar.
The irony of it was that private traders procured paddy at lower prices in Bihar and sold them in government procurement centres for a higher price in Punjab and Haryana. There were reports of seizure of about five lakh bags of paddy from Bihar by Civil Supplies officials of Punjab. At this juncture, there was the displacement of farmers in Bihar and States like Tamil Nadu received migrant labourers. This should be compared with the gesture of Kerala’s cooperative milk societies that offered free milk to migrant workers during the lockdown. No private milk producer did this.
The worst affected are wetland farmers of Punjab and Haryana, where production is high. In Tamil Nadu, the Delta region is the highest producer of paddy. These farmers have been the beneficiaries of the market committee or mandi system. The direct procurement system also helped the government by providing an income of up to seven per cent. The new legislation will facilitate the entry of private players, especially MNCs, in the farm produce market. The procurement centres or mandis will vanish, depriving the government of its revenue.
The government’s argument is that the new laws will allow farmers the liberty of selling their produce to anybody. In reality, there is no legislation needed for this ‘free trade.’ Nothing can prevent the farmer from selling his produce to a buyer of his choice. On the contrary, these laws will enable the trader to procure any produce anywhere.
There is another argument that farmers will get a good price when many players compete in the market. The experience in Bihar and Kerala is contrary to this. All of us know what is happening in the telecom sector where multiple competition is slowly getting reduced. The farm market will also witness the same phenomenon. The new law, which has removed the cap on holding stock, will benefit online sellers, who can hoard commodities and fix the prices at will.
‘One-nation-one-market’ is an American phenomenon. The present laws can be described as attempts to ‘cut-and-paste’ this phenomenon in the Indian agriculture sector.
(To be continued)

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