The Government of India has just released 3 Agriculture bills that have received extreme reactions, both positive and negative. Lets quickly browse through these and see what might be the reason for the reactions as well as find a way to resolve this in our discussions.
Here are the 3 bills in discussion
1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
Summary
- Farmers can sell their produce anywhere in the country without any additional tax or cess than usually applied by the market state in the Agricultural Produce Market Committee (APMC).
- Farmers can also sell it directly in the Private markets eliminating the authorized middlemen.
Expectation
- Farmers would get more price for their produce by eliminating the middlemen.
- Directly selling to Private players would be even more beneficial to the farmers, increasing their earnings.
Risks
- Almost 85% of Indian farmers are small farmers (less than 2 Hectare farm). Such small farmers will have almost no negotiation power against large corporates.
- It is highly unlikely that Private firms would deal with so many farmers across the country. It would still create middlemen who handle a particular geography and these may be even more savage than the APMC middlemen.
- Corporate negotiations along with Government negligence could make APMCs meaningless, leaving farmers with no options than dealing with corporates in the medium and long term.
- Decreasing APMC deals would reduce State taxes as well as folks employed in various capacities in the market.
2. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill
Summary
- Farmers and Private parties can enter into a pricing contract even before the produce is grown. This would ensure that the farmers have access to sell their produce even before the harvesting season.
Expectation
- Farmers would have security of finding a buyer even before the produce is ready.
- Pre-negotiated prices would be market driven and fetch a lot of profit to the farmers.
Risks
- Pre-negotiated contracts have no clause to maintain MSP, which could lead to exploitation of farmers.
- As more private firms enter into contracts, it might pull the prices even below acceptable limits.
3. Essential Commodities (Amendment) Bill
Summary
- Hoarding laws of essential food items is only limited to times of war and famine. Companies can store produce and use it later.
Expectation
- It will ease storage laws across the country.
- Stored food items could be used during harsher times.
Risks
- Private parties would hoard essential items and force artificial scarcity – leading to higher prices.
- As private organizations grow, different firms could monopolize different food items in their storage.
- If private firms already have enough in their storage, they could force even lower prices in contract farming and farmers would have no way out.
Privatization is a good attempt to allow competition in the lethargic and archaic APMC world. However, the goal of government programs should be public welfare and not profits. The lack or abandonment of regulation of Corporate actions, esp. MSP protection and healthy Public vs. Private competition in the new bills have left a lot desired in the Government Oversight in this program. For these bills to really reap the intended benefits, the Government should add the necessary clauses to protect the largest employment sector in India. Moreover, human survival – food should never be left to free markets, it is a dangerous attempt and might lead to disastrous consequences if the corporate greed is not kept in check.
