Farmers Movement Archive

Central laws won’t benefit farmers, experts tell Tomar

NEW DELHI: At a time when protesting farmers have resolved to continue their agitation, a group of economists on Thursday wrote to agriculture minister Narendra Singh Tomar requesting the government to repeal the central farm laws which, they claimed, were not in the best interests of small and marginal farmers. The economists put forward five reasons why the three laws were fundamentally harmful in their implications for small farmers. “We do believe that improvements and changes are required in the agricultural marketing system for the benefit of millions of small farmers, but the reforms brought by these Acts do not serve that purpose,” they said. The economists who wrote the joint letter included Kamal Nayan Kabra (retired professor, IIPA, New Delhi), D Narasimha Reddy (retired professor, University of Hyderabad), R Ramakumar (professor, TISS, Mumbai), Arun Kumar (professor, Institute of Social Sciences, New Delhi), Vikas Rawal (associate professor, JNU) and five others. Referring to the provision of unregulated ‘trade area’ outside APMC ‘mandis’, they said mechanisms to address and prevent market manipulation in the APMC markets existed whereas the central Act contemplates no such mechanisms in the unregulated trade areas. They said there would be no safeguards for farmers against non-price means of exploitation such as weighing, grading, moisture measurement etc in the unregulated trade areas. They also noted that the APMC market yards still set the benchmark prices through the daily auctions and offered some reliable price signals to the farmers. “Without these price signals, the fragmented markets could pave the way for local monopsonies,” they said while citing example of Bihar where farmers have less choice of buyers and less bargaining power, resulting in significantly lower prices compared to other states, since the removal of its APMC Act in 2006. On contract farming law, they said while contract farming arrangements are voluntary in principle, the acute crisis in agriculture with no price assurances may push farmers towards this paradigm in the hope of saving themselves from the crisis. “However, the reality of contract farming experience doesn’t bear that out in the absence of mechanisms to protect their interests,” they said. The economists also believe that the new laws would undermine the state government’s role in regulating agricultural markets and this would, in turn, adversely affect the farmers. “State government machinery is much more accessible and accountable to farmers, right down to the village level, and hence state regulation of markets is more appropriate than bringing a large part of commodity sales and trade under the ambit of the central govt Act, by establishing trade areas,” they said. On farmers’ concerns about domination by big agri-business, the economists said, "It is legitimate to understand that the three Acts together represent unshackling of agri-business companies from state level regulation and licensing, constraints such as existing relationships between farmers, traders and market agents, and from limits on stocking, processing and marketing. “This rightly raises concerns about consolidation of the market and the value chains in agricultural commodities in the hands of a few big players, as has happened in other countries such as the USA and Europe. It inevitably led to the ‘Get-Big-or-Get-Out’ dynamic in those countries, pushing out the small farmers, small traders and local agri-businesses.” Instead, the believe, what Indian farmers require is a system that enables better bargaining power and their expanded involvement in the value chain through storage, processing and marketing infrastructure in the hands of farmers and FPOs. “That would be a path for enhancing farmer incomes, and some of the earlier policy initiatives of the government were expected to help in that direction. However, the present Acts set a different direction where it is up to agri-business companies, freed from regulation and constraints, to invest and set up processing, storage and marketing infrastructure – consolidating their hold on the value chain – while the government steps back from its commitment to help farmers build infrastructure and consolidate their bargaining position in the market,” they said. Referring to these points relating to APMC mandis, trade areas, contract farming and dominance of agri-business, the economists believe that amending a few clauses will not be sufficient to address the concerns rightly raised by the farmers. “For example, if setting up unregulated ‘trade areas’ outside the ambit of state regulation is in itself detrimental, then any tinkering with a few provisions of the Act is not going to address that,” they said. Noting that it is not desirable to perpetuate the impression that farmers are misled by others, when they are raising valid and genuine concerns, they said, “The current impasse is not in anyone’s interests and it is the responsibility of the government to proactively resolve it by addressing the farmers’ concerns.”

The Times of India

2020-12-18

India