Farmers protest agri reforms, fear exploitation, monopolies
Though the new measures -- aimed at freeing up farm trade from restrictions, at guaranteeing a legal framework for pre-agreed prices, and at laying down a new architecture for contract farming -- were hailed by economists, farmer groups fear that they will lead to exploitation by big food-trading monopolies.Updated: Sep 14, 2020, 00:20 IST
Major farmers’ groups have vowed to resist the Modi government’s plan to free up the country’s antiquated agriculture sector with three liberalising ordinances, calling for coordinated protests when the government will table them in Lok Sabha on Monday for passage as Acts.
Though the new measures -- aimed at freeing up farm trade from restrictions, at guaranteeing a legal framework for pre-agreed prices, and at laying down a new architecture for contract farming -- were hailed by economists, farmer groups fear that they will lead to exploitation by big food-trading monopolies.
Opposition parties, including the Congress, have lent support to these ’ groups, saying they plan to stall the ordinances in Parliament by attempting to have them sent to parliamentary select committees. An ordinance is a provision to enforce a law when Parliament is not in session.
Farmers are already protesting these ordinances in food bowl states, such as Haryana and Punjab, and influential farmers’ unions are also preparing to square off with the government on the demand of making profitable sales in the form of minimum support prices, or MSPs, a legal right.
The All-India Kisan Sangharsh Coordination Committee (AIKSCC), a front for nearly 200 farmers’ groups, will take out a protest march in the Capital on Monday. The Rashtriya Swayamsevak Sangh (RSS)-affiliated Bharatiya Kisan Sangh is also unhappy with the ordinances. It has demanded safeguards for the farming community. The leftwing All India Kisan Sabha has slammed the ordinances as “pro-corporations, anti-farmer”.
The Bhartiya Kisan Union (BKU) is mobilising farmers from western UP, Haryana, Rajasthan to gather at Jantar Mantar Monday, according to farm leader Rakesh Tikait.
Also read: BJP MPs meet farmers protesting in Haryana
“The Modi government has used the corona crisis as an excuse to repress farmers’ protests against its anti-farmer and pro-corporate agenda which has manifested itself in the form of the three ordinances,” said VM Singh, convenor of the AIKSCC.
The Union Cabinet on June 4 announced far-reaching steps to unshackle the country’s farm sector, approving amendments to six-decades-old Essential Commodities Act, and two more ordinances. These measures, which bring the full force of liberalisation to the farm economy, were first announced by finance minister Nirmala Sitharaman on May 15 during the second of her series of briefings on the government Atmanirbhar (self-reliance) campaign, along with a Rs 20 lakh crore stimulus package.
Many economists welcomed the farm reforms, arguing that archaic restrictions have long choked the agriculture sector, which supports half of all Indians.
While India’s overall GDP growth rates have ranged between 7-8% over past decade, agriculture has limped with growth rates between 2-3%. The opposition to the ordinances comes at a time when agriculture has emerged as the only bright spot of the economy, registering positive growth, while the broader economy contracted 25% in the first quarter.
The new changes say that the government can invoke the Essential Commodities Act (ECA) ,1955, only if retail prices rise 50% in case of non-perishables and 100% in the case of perishable items from the average retail prices in the preceding 12 months or last five years, either case.
“This is such a wide range for a price trigger to invoke the ECA. Many things are left vague. Price triggers or price levels should have a reference to a locality. Suppose that a big food exporter says it has an export order from Ethiopia of, say, 1 lakh tonne? How will the government verify if that is a fake indent or a genuine one?” asked Kavitha Kuruganti of the Alliance for Sustainable and Holistic Agriculture (ASHA).
Farmer groups said they feared the new changes would lead to big monopolies. This would be just as bad as current cartelisation in mandis known as agricultural produce market committees (APMCs).
“We want the ordinances to be signed into law with appropriate safeguards, such as a national portal of farm trade corporations,” said Mohini Mohan Mishra, all-India secretary of the RSS-affiliated Bharatiya Kisan Sangh.
To reform these APMCs, the government had passed the The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020. The ordinance effectively brings the curtains down on the decades-old APMC system that regulates buying and selling of farm produce.
Kuruganti said while the APMC system was notorious, bypassing the system altogether without any oversight will make farmers vulnerable to exploitation. “The farmer is the weakest part of the supply chain, and the government has abdicated the data systems required to gather price and stocks intelligence.”
The ordinances don’t consider the realities of interlocked markets, its opposers said. In India, farmers typically are “locked” in with middlemen because middlemen often loan money to poor farmers for cultivation. A key flaw of the contract farming ordinance is that it leaves dispute resolution to the bureaucracy, which can be very difficult for poor farmers to access.
Economists say some of the farmers’ concerns of farmers were valid. “But if the assumption is that the current system is efficient, then there can be no discussion,” said NR Bhanumurthy of the Bengaluru Dr. BR Ambedkar School of Economics.
“Ultimately, when we open up the market, we need to open it up in a big. What we need is a market clearing mechanism. The issue is to have effective regulation. The consultative process will I believe address this issue,” Bhanumurthy said.