The recent farm bills passed by the NDA government has attracted a largely homogenous section of farmers from Punjab, Haryana and small parts of Uttar Pradesh to agitate against it. The demands include complete reversal of all three laws, and a system to ensure (permanent) protection of conventional methods.
India, a large country by most means, houses all kinds of farmers—and therein lies the first issue with these protests. It is outrageous to believe that a small, homogenous group of farmers can accurately represent the interests and demands of the entire farming community of India. The agitators have demanded, in addition to the above, to raise the Minimum Support Price (the beneficiaries of which are very few, and which is a debate in itself), a revocation of the Commission of Air Quality in NCR and reduction of diesel prices.
It seems like a fairly simple set of asks, until the importance of these reforms is clearly understood. To begin with, the Indian National Congress’ manifesto mentions these exact reforms, that too right in the beginning—implying the importance of a reform they are now campaigning against.
Now for the actual reforms – the first one is an amendment to the Essential Commodities Act, which is a gift from our erstwhile colonial masters that successive governments, for some reason or another, chose to retain. It was used as a way to exercise control over essential food grains during the Second World War. This also led to claims of Winston Churchill diverting grains from India and causing a gut-wrenching famine in Bengal – the repercussions of which were nothing short of the holocaust. This amendment by the government reduces the power of the State machinery to intervene in the farmers business unnecessarily and provides them breathing space. This is the simplest of the reforms and the least contentious (as felt by the protesting farmers).
The second is the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, which simply ends the monopoly of the Agricultural Market Produce Committee, or the mandi, where farmers are used to selling their produce. Now, imagine if Apple could sell its iPhones in a dedicated geographic area only and nowhere else. While there is no problem in having a dedicated space for the sale of iPhones, the word ‘only’ makes it draconian, dangerous and suicidal. What this law does is remove the ‘only’ from the equation and free the farmers. Now, they are free to sell their produce in any state, anywhere in the country. It also limits the scope of control the APMCs enjoyed over the area of the mandi itself, as opposed to the entire district earlier. The mandis can no longer levy a tax on the farmer’s produce that is sold outside it. So, the mandis still exist—just that they have competition, instead of being a monopoly.
The third, which is the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, creates a framework for contract farming even before the production begins. This means the farmers will have more clarity about the quantity of production, ultimately reducing excesses and increasing profitability. Farmers will be able to predict their risk and mitigate it appropriately. This also provides for a three-level dispute settlement mechanism in order to provide protection against misuse of contracts and breach of trust.
It is absurd that the farmers are making demands that defy logic – why would they want to remain in shackles, and seek protection from freedom?
An important side of the story is the amount of money states like Punjab and Haryana make through taxes levied by the mandis on sales. Before the reforms, Punjab levied a total tax of 8.5% on the sales of produce to the Food Corporation of India, which bought the grains for distribution in the entire country through Public Distribution Systems. These laws mean that farmers can sell their produce outside the mandi (hence tax cannot be levied on those sales), potentially hurting the income Punjab and Haryana were earning.
The protests are weak in their logic and based on rumours – for instance, the demand for retaining MSP, which has not been scrapped in the first place. MSP had become more like a maximum selling price rather than the minimum support price, the true nature of which has now been restored. These reforms are a watershed moment for Indian agriculture; it is 1991 all over again, except this time for the farmers.
The government has done a good job with reforms and must hold out the protests in the interest of the nation.