Editorial > The changing Farm laws of India and why the farmers don’t like it

The changing Farm laws of India and why the farmers don’t like it

Dais Editorial | 19/12/2020 07:30 PM

A running Biography of India’s Most Burning Issue of 2020/2021 - THE FARMERS' PROTEST

The emphatically introduced Farmers’ bills, the quick passing of the Acts, the resultant protests and the ever-changing-yet-static stances of the Modi government - much has been seen and experienced in the past few months on the topic that has divided a country on the geographical affiliations.

Ask anyone in the know of the politics of the country and you will have a few snippets of information and a by-line of opinion thrown at you. With increasing weeks of unrest and the unrelenting nature of the protests, the former (information) seems to be blurring out and the latter (opinion) seems to be gaining currency.

Anyone not interested in politics – students, salaried individuals, 20-somethings too busy looking for the next big break – this is an issue affecting a subset of subsets in the Indian demographic.

The breakdown we heard from someone who hasn’t followed the story all through was ...

In India, there are a few farmers – amongst the farmers, there are a good majority in Punjab and Haryana, in these two states- the majority of people are Sikhs. Hence... this is an issue of the Sikh farmer based out of Punjab/Haryana – Why am I sitting in a Bengaluru or a Mumbai be bothered?

Heard from the slightly better informed, or those who skim through the headlines to not sound dumbstruck in a socially awakened conversation – the APMC Act has been repealed which takes away MSP support from the poor farmer. Hence, the non-consultative government has snatched away a key source of livelihood of the small farmer and is capitalistically supporting the large corporations. Period. That’s all I need to know. And that seems to be all one feels the need to know.

Does it affect me beyond that? No.

Am I the one losing my job? No.

Is my community getting affected if I am not a Sikh? No.Telegraph India

What’s the biggest trouble that could reach my doorstep? A costlier pack of Atta or a dearer kilo of rice?  Nothing that we haven't beaten before!

Dig a little deeper into these answers you will get in a normal, ‘seemingly’ apolitical social setting, and you will most likely hear how a Kangana Ranaut shut out a Priyanka Chopra or a Diljit Dosanjh trivializing the seriousness of the issue … followed by another wisecrack from another well-intentioned social being–

“You know these celebrities – will speak for anyone if paid. None of them have any Imaan-dharam”

Sounds familiar? All too much right?

It did to us that too. And we decided to offer this topic the rightful eye it deserves – in as non-boring and as unbiased a manner as possible,constantly updating it with the attention it deserves. This should be an eye-opening read.

WHAT EXACTLY IS THE ISSUE?

First let's understand the two acronyms that are the centrepoint of this conundrum..

PUBLIC DISTRIBUTION SYSTEM (PDS) AND MINIMUM SUPPORT PRICE (MSP)

The Public Distribution System was set up by the Indian Government in 1945 and then subsequently revived in the 1960s (before the green revolution) to supply wheat and rice to the urban consumers (staying away from the agricultural areas) via ration cards at a set price for a set quantum.

The grains under PDS were procured from the surplus producing states of Punjab and Haryana at very farmer-friendly prices called MSP (Minimum Support Price).

{The MSP is a special procurement price introduced in the mid-sixties, which implies the rates at which a government agency buys a particular crop from the farmer}

Next - The three NEW FARM LAWS that are the main reason of the farmer’s discontentTimes of India

There are 3 reforms under contention at the moment..

And now, for the Most Important part  – THE EFFECTS OF THESE BILLS ON THE FARMERS- 

  • Mandis will cease to exist and the farmers have to find buyers for their produce each time instead of heading straight to the APMC to sell their goods
  • The MSP served as a benchmark support price for the farmer, it was the minimum price that would get for his goods – because, even if no one else bought his goods, the government would  be his buyer– at the MSP. The commission agents will no longer arrange for their goods to be sold at preferential prices since they will be paid better by large corporations to drive down procurement prices
  • The government will buy for its PDS and other subsidized schemes of food grain distribution – however like any other large corporation, it would not be compelled to buy from a particular APMC or Mandi and can actually procure any quality from anywhere in the country at a price of its choice. This takes away the surety of the farmer to be able to sell his harvest.
  • Since all procurers, big or small, institutionalized or siloed – would be able to acquire their Agri requirements from anywhere they find the best value in – the forces of demand and supply will make prices competitive – in effect, lower.
  • The prices under MSP were highly politically motivated sometime even artificially upheld to appease the electorate – with the MSP now existing but in a non-compulsory form – the values mentioned on the MSP price-list are of lesser importance. With again the demand-supply market forces functioning to determine the ‘right price’ of a commodity rather than the government’s will – the prices of crops would fall. 
  • An essentially entrepreneurial/self-employed style of leading life for the average Sikh/Punjabi comes from the mindset of being a farmer- there is a sense of self-sufficiency and self-dependency that keeps them away from the corporate and service sector life of the country that has moved away from being an agrarian economy and moved closer to being a service-led economy over the past 3 decades – with the service sector contributing almost 60% of its annual GDP. Serving the life of an employee would be a drastic change of lifestyle and mentality – which seems to be shaking up the farmer.
  • While the primary importance is being given to the Three major farm bills, there is also an Electricity Amendment Bill which primarily aimed at making the supply of electricity by the states to its constituents, cost-reflective. Instead of continuing with the age-old state practice of providing free electricity to its farmers, the central government now aimed to transfer the subsidy via Direct Benefit Transfer, straight to the consumer. The electrical subsidy for the farmers not only fuelled their fields but also their homes - with this ‘free dole’ now going away, the input costs are expected to increase for their farm produce and their household expenditure will increase with the addition of the hitherto ‘subsidized’ electricity expense. However, the government later on in January claimed that these subsidies won't be affected.

WHAT ALL HAS BEEN DONE TO STOP THE NEW FARM LAWS FROM BEING PASSED?Bharat Bandh - Economic Times

  • BHARAT BANDH – the farmers held a Nationwide Bandh on the 8th of December, 2020 wherein the protesting farmers’ bodies were being supported by most opposition political parties and several celebrities.
  • RAIL ROKO - The farmers began their protests aggressively in September by squatting on railway tracks, with the Rail Roko campaign compelling the Railway authorities to cancel many special and passenger trains along those routes in Punjab.
  • BLOCKING OF THE NATIONAL HIGHWAYS AND BORDERS – the farmers attempted to block the Delhi-Jaipur highway in the bid to intensify protests but failed. They have been sitting at the Singhu border in protest since November 26. Several farmer suicides have also been reported from the spot. As the agitation burns on, CAIT (Confederation of All India Traders), the country’s apex trader body has reported a business loss of Rs. 50000 crores due to the farmers sitting at the border.
  • ALL INDIA HUNGER STRIKE – A day long hunger strike was held on the 14th of December and is to be held again on the 22nd of December along with a 'Shraddhanjali Diwas', by the farmers to put pressure on the Modi government to repeal the laws.
  • SUPREME COURT PETITION – the farmers having fought this issue publicly and over social media over the past 20 days have now moved the courts to get a legal resolution. The Supreme court on Jan 12th, 2020 has stayed the farm laws and formed a 4-member committee to examine the laws and come back to the Court with a report on the matter. In a strong reprimand to the farmers who were denying appearing before the Court-appointed committee, the SC bench stated that their intent is to resolve the matter, and that"There is a difference between politics and judiciary and you will have to cooperate." With the committee having been rejected by the farmer unions, the Supreme Court has ordered it to proceed with or without the farmers involvement strongly mentioning that the farmer unions are trying to ‘besmirch the reputation of the panel members by branding them as biased’.
  • REPUBLIC DAY TRACTOR RALLY - The Government and Police are looking to avoid a much-touted tractor rally which the farmers are aiming to bring into the capital on Republic Day.

A PRO GOVERNMENT OPINION - IS IT FAIR? 

The government seems to be projecting a well-intentioned face with the enactment of these laws.

Under the APMC (Agricultural Produce Marketing committee) Act, farmers had to compulsorily sell their produce at the APMC Mandis. They say that these farm laws are major reforms that will remove middlemen from the Agricultural trade and allow the farmer to sell his produce anywhere in the country to anyone he wants.Firstpost

The government believes that the primary victims of the new laws are the middlemen or the commission agents who are provoking the farmers to protest against these laws – that are actually in their favour. 

The removal of some of the commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the essential list will attract foreign and private investment in the agricultural sector which hitherto was marred by the prevalence of red-tapism over market forces.

The government also insists that there are misunderstandings on behalf of the farmers and that they need to consider the government’s written word before they continue to protest.

The new development is that the government believes the farmers are not acting at their own behest but instead are being provoked by ultra-left and pro-left wing extremist elements to create unrest and damage to public property.

The government also insists that the MSP will remain, by enacting these laws – the BJP government is merely giving the farmer one more option to sell their produce rather than sell it all through the mandis. They are now free to sell it to anyone who offers them a better price - an organization, an exporter or even a cooperative. 

The Prime Minister has gone to the extent of telling all political parties to stop misleading the farmers and take all the credit of passing the farm bills because it is for their and their constituents’ benefit. The laws, he said have not been enacted overnight and if there are doubts, the government is willing to dispel those. He also was seen making a trip to Gurdwara Rakabganj in Delhi to soothe frayed nerves.

The government wishes to bring down the prices of all agricultural goods , direct consumption or industrial input, for the economy as a whole by opening up its own avenues of procurement. Being the biggest buyer for the farmer, the change in the government’s buying trend, will set a precursor for all other buyers who will now look to procure at fair and non-stipulated, competitive prices from the farmer. 

This also paves the way for foreign institutions and private players to step into the agricultural space in India – since this has been an ignored area since industrialization due to its tight regulatory framework and APMC-related red-tapism.

A PRO-FARMER OPINION - IS IT UNFAIR? 

On the face of it, the farmers' fears  were not unfounded.

While the government states that the new laws are being enacted to help the small farmer, the dismantling of the Mandi system and the insignificance of the MSP post the enactment of these laws, will end up creating a new devil – large corporate houses dictating terms to farmers for their produce and making a profit out of the lack of bargaining power – since there is no more MSP and it is essentially a free demand-supply market.

Like Senior Congress leader Salman Khurshid mentioned in an Indian Express article - The asymmetric negotiating matrix between the famers and corporates will invariably lead to negation of their rights. The present laws alter the bargaining landscape in favour of the corporate players to the detriment of the farmers. 

The Indian ExpressThe more vociferous are the commission agents or the ‘arthiyas’ who will be increasingly out of business since the mandi fees and the commissions were keeping their livelihoods. (the farmers fear the commission agents will gang up against them)

The farmers’ belief that once the market is a free-for-all, the big corporates will end up dictating terms and compelling farmers to sell at much lower prices than the guaranteed MSP – is not incorrect. Often, the smaller farmer who functions on an individual level gets crushed under the pressure of a corporate that functions at an organized level and the rescuer, in this case, could only be the biggest buyer in the country for their goods – the government.

As the Dais World team tried connecting with influential voices at both sides of this story, Ms Chitra Sarwara, the National General Secretary & Treasurer of Haryana Democratic Front (HDF), said "The three farm bills themselves and the entire process of their implementation has left no doubts about the mala fide intentions of BJP government towards the farmers and their future.

The three bills were introduced as ordinances to take advantage of the Covid times and have since faced opposition everywhere - from Rajyasabha to the roads leading to Delhi.

Prime Minister Modi Ji's words carry little weight in light of numerous such 'jumlas' put out there by him or his party in times of election or crisis negotiation. His government has not given due attention or space to the concerned farmers before or after the formulation of these bills and now his mere word for no rollback of MSP will not suffice for anyone.

The mala fide intention, the doublespeak, the list of unfulfilled promises, the apathy on behalf of the Government to placate the farmers' concerns will never let anyone believe this latest statement of his.

While he may talk of maintaining MSP, he's working towards complete dismantling of the system that provides it and ensures it. With Adani Corporation's AAFL getting exclusive rights to store all food grain on the behalf of  FCI, soon the farmers will have to face the same corporates when negotiating his field and same again when negotiating his produce rates."

There is also a fear that the average middle-class farmer in Punjab who has enjoyed this status for over 5 decades now, will be pushed into poverty since his goods will now be a part of a national market – hence creating a ‘survival of the fittest’ situation.

The government’s insistence that the farmers have political agendas and are being provoked, maybe lacking substance – especially comparisons to the Bhima-Koregaon agitation or the Shaheen Bagh anti CAA sit-in.   

Meanwhile, noted Activist Anna Hazare planned to go on a hunger strike from January if the Centre still doesn't listen to farmers’ demands, which by the way has not come to that yet. The farmers are also accusing the Government of using NIA (National Investigation Agency) notices to intimidate the farmer leaders.

Related: https://thewire.in/government/farmers-protest-emotional-appeal-running-high-modi-government-lost-plot

Hindustan Times - how the Farmers' bill is exploitativeOR IS IT “NEUTRAL”? - THE HARD FACTS

This is not a this or that situation. There are spaces where both the farmers as well as the government are factually correct and there can be a middle ground to the whole situation provided there is discussion and the will to resolve this impasse.

When we tried to dig deeper into other state machineries encircling around this same issue, we came across some stronger statements but they all wanted to remain anonymous. However, our correspondent from M.P. gives us insights :  “We have to consider one more thing here that one single law can not be good for all the states /regions. For example, consider Mandis in Madhya Pradesh where poor uneducated farmers are exploited by the middlemen working very much hand in glove with Mandis. Even when the produce is good Mandis often don't take it stating various reasons. Poor farmer not having means to stay overnight or bear the cost of keeping his vehicle with him, gives in to the unethical demands and sells the produce at much lower price than MSP. Whereas a big farmer almost takes charge of the Mandi officials and sells his product as per MSP. As you see here, the poor farmer not having enough means to transport his produce to a far away place and rather not permitted to do so, he has to sell the produce in the same Mandi in whose jurisdiction his farms are located and nowhere else. There are check posts made at every town and village to check those things. Helplessly, the poor farmer sells the produce at much much lower price. I think, more than 90-95 % farmers in MP (and may be also CG, UP, Bihar, Jharkhand and Rajasthan will fall into this category) are poor farmers and that’s why they must be happy with these laws so that they will be free to sell their produce freely to private vendors with a bonus where these private vendors will also facilitate collection of produce directly from their fields.” Another aspect of contract farming for a region like M.P. is that the Bill would guarantee something minimum.

Now coming to farmers from Punjab and Haryana; about 65% of the total purchase of grains by the Govt is from these two states. Not to mention that these Mandis may be influenced by some of the political houses and therefore their income will be gone. It seems more so that the Bichauliyas (middlemen)  who are against it and not the farmers, who will eventually run out of their income.

Let’s underline some facts that cannot be ignored –

  • The farmers will be at a disadvantage once the MSP is removed or marginalized- planning for the crop becomes difficult and risky if the farmer does not know if he can sell his entire produce at a price above his production cost
  • The government wishes to remove the middleman and save on mandi fees for the farmer 
  • The government wishes to allow the farmer to sell his produce to anyone in the country with a pre-signed contract – this will give the farmer a visibility of his potential selling price and profit post sale
  • Farmers are apprehensive of being able to deal with larger corporates single-handedly – they know they will be losing out under the pressure of a large organization if the government doesn’t set a menu card of minimum prices the corporate is supposed to pay to procure those grains.
  • Removal of essential commodities from the list is a painful exercise considering these grains then become normal crops - the price and command over these commodities for the farmer goes away. 
  • Since the government is no longer regulating the agricultural markets, the old forces of demand and supply become applicable to price discovery. This may seem fair at the surface but in the real world, the larger corporations tend to exercise monopoly over the smaller farmer directly or via the larger farmers and local brokers.
  • The government will be able to procure their requirements from anywhere in the country. If Chennai produces better wheat than Punjab, the govt will end up procuring from there, essentially creating a competitive economy and removing regionalist monopolies – which is what worries a large set of farmers.
  • Pro-Khalistani forces, which in effect are now insisting the Sikh farmers in Punjab and Haryana are getting a raw deal since they do not have a nation of their own, have risen back from the ashes to spread their divisionary message around – giving this whole issue a new direction.

Punjab Farmers Protesting - Dais Editorial - Best News App 1Hell, or high water, the farmers seem to only be leaning towards one single solution – repeal the laws. There is no tweaking or altering to their minds. This has in turn tied the hands of the government looking to seek a middle-of-the -road solution to this issue and seek a peaceful (if it can be called so anymore) resolution to it.

Meanwhile, there have been a lot of anti-establishment forces that seem to be taking advantage of the fervour that has gripped the country and the diaspora – in support of the farmers.

The Pro-Khalistani forces, the Bhima-Koregaon activists, the pro-freedom-of-the-fourth-estate voices have all jumped in to grab a piece of the public eye – seemingly politicising an issue which may not have been political to begin with. It seemed on the face of it, an issue which a constituent has with its governance. What it now seems to have become, is a matter of political gossip and mudslinging – which may not have been the central idea of the farmers’ ire.

Numbers for Farmers Agitation 2020-21 - Dais WorldNonetheless, like we said – this has definitely surpassed the much-hyped Sushant Singh Rajput suicide/murder case and has topped the excitement behind an Indian Vice-president-elect in the US and is now standing one step short of overbearing the Pandemic’s crippling in India’s Bharat. Should you not know anymore? 

As we look back into facts and figures, we dig around and play sarcasm and sattire on memes and mudslingings over Twitter and across social media, we must not forget one important fact. The fact that today Delhi and surroundings are recording sub 4degrees celsius and farmers who are camping under makeshift arrangements are not willing to give up soon. You have to notice them, the policy makers will eventually need to bow and listen, sooner or later.

This is a developing story and we have promised ourselves to keep this Editorial maintain the dynamics with the daily developments that could add value as insights  as the issue builds on...or reaches a sweet spot.

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