What is the Farm Bill and why are farmers protesting against it?
Farmer protest in India's national capital has created quite a flutter globally too. But very few know exactly what the farmers are protesting. Here's a primer or an explainer on the contentious Farm Bills.
KEY HIGHLIGHTS Since 26 November, farmers from Punjab and Haryana have laid siege to the national capital. They are protesting against recently passed Farm Bills These bills lay the framework for allowing farmers to sell produce directly to corporates, argues the Centre Farmers fear that this may be an excuse to pull off the MSP safety net from under their feet
Since 26th November 2020, the borders of Delhi have been witnessing a huge agitation being carried out by farmers, most of them from Punjab and Haryana.
The farmers are protesting against 2 Farm Bills that the Rajya Sabha recently passed: (1) the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, and (2) the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020.
The two bills had already cleared the lower house – the Lok Sabha. When they were introduced in the Rajya Sabha, there was ruckus and finally, the Bill was passed through a voice vote.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020:
This Bill allows the farmers to sell their produce outside the Agricultural Produce Market Committee (APMC) regulated markets. The APMCs are government-controlled marketing yards or mandis. So, the farmers clearly have more choice on who they want to sell. The government's logic, economic expert Gurcharan Das writes in TOI, is that the Agricultural Produce Marketing Committee (APMC) is an obsolete institution from an age of scarcity, meant to protect the farmer but has now become his oppressor, a monopoly cartel fixing low prices for the farmers' produce, forcing distress sales.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020:
This Bill makes provisions for the setting up of a framework for contract farming. The farmer and an ordained buyer can strike a deal before the production happens.
The Essential Commodities (Amendment) Bill 2020:
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 allows intra-state and inter-state trade of farmers’ produce beyond the physical premises of APMC markets. State governments are prohibited from levying any market fee, cess or levy outside APMC areas.
How will the Bills benefit the farmers?
Gurcharan Das, expert as he is in the field of economics, points out that the three farm laws offer three basic freedoms to the farmer.
Defeat the monopoly cartel at the APMC mandi and sell the produce anywhere to anyone
Bypass the Essential Commodities ACt and be free to store inventory which was constrained so far by stocking limits of ESCA.
Free to make contracts and transfer risk to businessmen in deals made over a crop even before yield is made or met.
Why has the Centre not reached out?
The Central ministers and Prime Minister Narendra Modi have tried reassuring the farmers that the government has no plans to end the government procurement system nor the MSP policy. But fear, misconceptions persist and the two sparring parties have not had meaningful negotiations.
Despite four rounds of talks with two of them involving a 3-minister panel of the government and a few dozen representatives of the farmers' unions, he impasse has not been broken. The Centre is also said to have offered a written guarantee that MSP will not be withdrawn. Farmers' lobby is not ready to buy that and demands the repeal of the recently passed Farm Bills.
Harvard alumni and bestselling author Gurcharan Das, a former CEO of Procter & Gamble India, writes in The Times of India that the agitating farmers of Punjab are looking at short term monetary games while the Farm Bills were coined with long-term economics in mind. And that Prime Minister Narendra Modi, one of the world's greatest communicators forgot to take all stake-hoders into confidence before the Bills were tabled, thus leading to false rumours that the price subsidy (MSP) is going to be withdrawn.
Gurcharan Das also points out that a small, organised, and well-funded group in a democracy can hijack the nation's interest when the majority is silent and unorganised. 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 rich farmers of Punjab who are part of the 6 of India's farmers who benefit from the MSP regime.
Why are the farmers upset?
The farmers of Uttar Pradesh, Punjab, and Haryana are angry with the provisions of these Bills as they are afraid that these Bills may be the platform that the government (at the Centre) is setting up for the replacement or scrapping of the otherwise robust support system prevalent in their states for the purchase of their crops. They fear that the Minimum Support Price (MSP) guarantee that was their safety net since the Green Revolution of the 1960s kicked in, maybe snatched away from under the pretext of giving the farmers more playing ground and better platforms.
The state-government driven crop produce procurement infrastructure in these areas is very good. Procurement through the Food Corporation of India at promised MSP to farmers, which is declared before every agriculture season, encourages farmers to focus on taking more yield.
23 agricultural crops have MSPs, though the governments primarily buy only rice and wheat. Farmers fear the two recent bills as they feel these agriculture reform processes will kill the government procurement process as well as the MSP. And why d we see most protesters from Punjab and Haryana? That is because they are the biggest beneficiaries of this safety net.
The farmers of Punjab and Haryana:
As per certain reports, nearly 89 per cent of the rice produced by the farmers in Punjab is procured by the government. In Haryana, it is 85%. farmers in Punjab and Haryana face no price risk and price risk and are in fact incentivised to grow paddy and wheat. But the nation has been facing a shortage of pulses and the wheat and rice instead have been a surplus in FCI’s godowns.
Also, rice is a water-intensive crop and farmers from areas with water shortage too grow it as there is an MSP assured in the end. Continuous adoption of rice-wheat cropping system in North-Western plains of Punjab, Haryana and West Uttar Pradesh has resulted in depletion of groundwater and deterioration of soil quality, posing a serious threat to its sustainability," says a government study.
Also, these Farm Bills are encouraging farmers to strike deals with large corporates, and farmers do not trust corporates.
All eyes are now on at least one more round-table conference between the farmers' unions and the Centre that will take place on Saturday.
very informative