‘Landmark’ laws don’t create competitive markets

By Nagaland Post | Publish Date: 9/27/2020 1:05:21 PM IST

 A stormy Sunday chaos in Rajya Sabha (RS) has changed it all. The farm bills are crucial not only for the farmers but for the economy and social well being of the country. A “smooth sailing” it with voice vote even as the house was in pandemonium make people wonder about the hurry. 

The protests of the farmers and the opposition may be because of their ignorance or better understanding of the ground situation, tell a bit too much. Rajya Sabha deputy chairman Harivansh Singh could have given time to the opposition to debate or even refer it to the standing committee for the wearisome situation to cool down. 

It’s a “watershed moment in history of Indian agriculture”, Prime Minister Narendra Modi has said. The opposition says, it is “historic for wrong reasons”. Such moments need more care to convince the beneficiaries.

The opposition acted on its nerves in the pandemonium and certain unprecedented scenes were created. Eight MPs were suspended. It was avoidable. The uproar is there all through the country not only in Punjab, Haryana but even in Telangana and other states. 

The RS deputy chairman should have been aware of the countrywide concern, which may have been misplaced or not. The opposition has gone further deciding to move no-confidence resolution seeking removal of deputy chairman.

The chair is preserver of house norms and democratic propriety. He could have avoided the haste to push through. 

The bulldozing of the two bills -  Agricultural Produce Trade and Commerce (Promotion and Simplification) Bill and Farmers (Empowerment and Protection) Price Assurance Bill amid pandemonium and rushing through next day with Essential Commodities Act raises concerns that may not be real but that is the responsibility of the movers to remove. 

The concerns that rock the nation are that the APMC mandis are being dismantled, MSPs would gradually be done away with and corporate are taking over Indian farm market. None of it may be true but still the nation wonders about the method either of the house chair or others. It may have or not served a political purpose but has raised many more queries.

Difficult solutions need patience. Many have raised a query about the situation in Bihar. It is certainly not an issue in Bihar elections.

It dismantled the APMC mandis in 2004. Even Punjab traders are going there to buy food grains at low prices, carry it back and sell it to FCI at MSP and still have profit. The buzz is that Bihar farmers get 20 to 30 percent less than MSP.  

In the last season as per data presented in Parliament, 1.24 crore paddy farmers and 44 lakh wheat farmers got the MSP. The PM-Kisan scheme records 8.12 crore farmer families having up to 2 acre of land. Actual numbers are higher. It means 94 percent of farmers sell their produce at non-MSP rates. The concern of the government that only a fraction of the farmers get MSP is not misplaced. It is; however, true that MSP acts as floor price even for deals below it. 

The slogan of ‘one India one market’ has not succeeded there. The house should have discussed it. It is for parleys and bedrock of democratic principles, more so the Upper House. Avoiding it has raised unseemly allegations creating impression that the nation cares not much for its people and may be working under pressure. 

The argument that the first bill would liberate the farmers from the unjust situation that they are locked in also may not be correct. The new bills may be well intended but ground realities of multiple markets do not exist to give farmers the benefit of better price the bill promises.  

The APMC mandis do not promote competition. Presently, there are 2477 principal regulated APMC markets and 4843 APMC sub-market yards. The APMC functions under state governments. In 2003, during NDA-I, the central ministry of agriculture prepared the model APMC Act and for over a decade, since 2009, UPA-II, has been pursuing the states to change their laws to provide for direct sale of farm produce to contract sponsors; setting up special markets for “specified agricultural commodities”; permit persons, farmers and consumers to establish new markets and provide for direct sale by farmers to consumers. 

The ministry in a document stated that if persuasion with the states fail, it may be necessary to see what the centre can do. The new bill echoes it as the ministry propagated to increase “competitiveness” and impliedly better price.

At various stages it was opposed and the arguments that the opposition is now presenting were presented before. The UPA government did not pursue it finding the provisions contentious and uncertain. 

The new law allows sale of produce outside the APMC purview. In reality the number of markets will not grow. Anyone, however, can procure from farmers without the need for a licence and payment of mandi fees and taxes to states. Most traders are likely to abandon the official mandis and set up informal markets outside mandi gates. Gradually the mandis might be abandoned. It means the bidding process to establish the highest price for a produce might also vanish. 

This would make MSP redundant and the fears that farmers would be exploited by a cartel of businesses may stalk them.

The misgivings among farmers emanates from it as also that the new bill does not mention that a deal would be deemed proper if the price paid is at MSP or higher than it. Since multiple mandis do not exist where the buyers may have to compete, the farmers would continue to lack bargaining power.  In the new situation too the middle man is likely to thrive.

The second bill will make farmers go for contract farming with trade firms, wholesalers, big retailers and exporters including large corporate. Though it can supposedly protect farmers from price vagaries as many of them can have contract even before sowing but gradually might make them dependent and exploited as the free mandis would vanish with its MSP.

The EC Act was not deterrent. It has become ineffective and it is good to decriminalize trading and unnecessary harassment. 

Let the nation rethink, discuss, create more competitive markets and come out with concrete solutions. Farmers have been tossed around and despite good intentions the new laws do not seem to solve their problems.

Shivaji Sarkar

Launched on December 3,1990. Nagaland Post is the first and highest circulated newspaper of Nagaland state. Nagaland Post is also the first newspaper in Nagaland to be published in multi-colour.

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