farm laws and related Situation in India
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By: Kardama Muni @ Muni Blogs
Indian government recently passed three well-meaning Farm laws that have caused protests and agitation primarily amongst the farmers of Punjab and Haryana. Intent of these laws was to help farmers make more profit on their efforts and help alleviate suicides due to financial reasons. Also, to eliminate the farmer’s dependence on subsidies.
Due to political immaturity as well as myopia of opposition parties in India, everything becomes protests and agitations. Such issues do not require an agitation when the government is open to talks and willing to make changes necessary as long as the intent of the laws are met.
The protest and agitation in a democratic society should be used only after the law that was passed in accordance with the constitution, have been tried for a year or two, have not yielded desired results, and all attempts to draw government’s attention have failed. It is very unfortunate to see India plummet into agitations after agitations just on rumors or fear of unknowns.
This article puts forth the facts in front of an open minded reader.
This bill allows farmers to sell their produce anywhere of their choosing. It has measures that will prevent state governments from discouraging farmers from making use of this law.
This Bill makes provisions for the setting up of a framework for contract farming just like USA.
It allows sale of farmer’s produce beyond the physical premises of APMC markets. State governments are prohibited from levying any market fee, Cess or levy outside APMC areas.
Before this law, a farmer could sell the produce only in a designated price-controlled market called Agricultural Produce Market Committee (APMC) (*1). The farmer typically received the minimum support price (MSP) for the produce although the produce was worth much more in the open market.
The farmer can continue sell the produce in APMC markets, to the existing known agents at MSP. Government has guaranteed that the APMC and MSP regime will continue as is.
In addition, these laws allow farmers to sell their produce outside the APMC regulated markets to anyone and anywhere in India.
State governments are not allowed to charge any market fee, Cess, or Levy outside APMC areas. This ensures that state governments do not interfere with the farmer’s rights, discourage or make selling elsewhere artificially prohibitive.
Farmers can sell the crops before even planting at or above the MSP – thus, transferring the risk of crop failure to a private corporation instead of carrying it by self.
The corporations would typically mitigate risk by taking crop insurance and the difference of buying prices versus the market price.
The three farm laws offer three basic freedoms to the farmer.
The middlemen, mandi cartels, few rich farmers who sold their crop to their family middlemen and made huge profit while also obtained subsidies meant for smaller farmers, are all going to lose out if they operate without a global vision.
On the other hand, the intelligent middlemen now have ability to convert themselves into a corporation, join the white market, make value added products, and help in nation building while making the same amount of profit or even more. If they think a bit, they too can come out as a winner from this law albeit the way they would make same amount of money would change. Instead of being a mere treader moving trucks from point A to B, they would have to buy farm produce and made products out of it so make same amount of profit. But they too don’t have to be losers unless they chose to be one.
Some farmers are afraid that these laws may be a way for the government (at the Centre) to replace or scrap the existing support system prevalent in their states for the purchase of their crops.
They fear that the safety net of Minimum Support Price (MSP) guarantee in place since 1960s is being taken away under the pretext of giving the farmers more freedom and better options.
In reality, of the 23 agricultural crops with MSPs, the governments primarily buy rice and wheat only. Farmers fear the laws will eliminate the government procurement process and the MSP. Being wheat producers, Punjab and Haryana farmers are the biggest beneficiaries of this safety net where FCI declares the MSP before the growing season and buys at that price.
These farm laws are encouraging farmers to strike deals with large corporates, and farmers likely do not trust corporates.
Farmer leaders are failing their followers by not seeing the long term benefits of these laws. Also, the continuation of existing system ensures necessary protection and successful transition of all farmers over the years (making current system irrelevant then). This myopia of farmer leaders is blocking all the efforts of communications from the government.
The economic expert Gurcharan Das points out that a small, organized, and well-funded group in a democracy can hijack the nation’s interest when the majority is silent and unorganized. Das claims that behind these protests are the arthiyas, buying agents in PMC mandis who stand to lose Rs 100 crore a year in commissions, as well as the few rich farmers of Punjab who have benefitted from the MSP regime.
The marginalized opposition political parties need such stir ups to justify their presence and gain some grass root support. For this reason only, they are now opposing the laws that they themselves insisted be created a few years ago (and had promised they would create these laws if they were elected to power). Some have dipped so low to gain some traction in election that they are willing to side with anti-national forces as well.
Countries like Pakistan, who can offer up their own Punjab province to our Sikh brothers to create an independent nation of Khalistan, is not doing so. Instead, it is trying to foment trouble in India using such protests and intermingling/overtly supporting a few misguided Sikh youths as a revenge for (Pakistan’s own incessant killing of Bangladeshi Muslims in 1970 and eventual) separation of Bangladesh.
Reference
These are regulated markets. The APMCs are government-controlled marketing yards or called mandis in vernacular.
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