The Agricultural sector in India is the largest source of employment and engages around half of the country's population. However, the agricultural sector is also full of contradictions and depicts a picture that bounds to raise a few eyebrows. The Food and Agricultural Organisation of the United Nations estimated that around 70% of households in rural India is primarily dependent on agriculture as their source of livelihood, whereas, accounting for only 5% youth in the sector. It projects a future of uncertainty, as far as, the Agricultural sector is concerned, for the current workforce is ageing fast while failing to cast a sustainable replacement rate to secure its fate.
On the one hand, when food grain production increased from 51 million tonnes in 1950-51 to 252 million tonnes in 2015-2016, its contribution to the country's GDP, on the other hand, decreased from a massive 50% to a meagre 15.4%. Besides, when farmer suicides were taking the shape of a pandemic, India's contribution in total production of pulses in the world increased to a staggering 25%, i;e one-fourth of the whole pulses produced in the world.
Likewise, in 2013, when India was boasting a 25% share in total cotton produced worldwide, one cotton farmer was committing suicide every eight hours (see CNN ). Besides, India also became the highest producer of Milk during the same period and in the successive years achieved food sufficiency in production but suffered massively from Malnutrition as of 2015.
All these data depict a picture of contradictions that emerged over the years from a state of policy paralysis, reducing the Anna Daatas of India to agricultural slaves in reality and miraculously scaring away youth from getting engaged in a sector that was registering a notable (although fluctuating) growth down the decades. While food grain production catapulted in India, the income of farmers dipped and reached a point, where it became untenable for farmers to afford a dignified life. Moreover, most political parties and their leaders exploited these depressed farmers for votes and pelf, and used their situation to fulfil their vested interests. The state of perpetual debt made farmers vulnerable, and their exploitation became a never-ending vicious cycle.
From lending money from private lenders to procure seeds, fertilizers and pesticides on hefty interest rates, to being forced to sell their produce at criminally low prices to middle-men in the absence of transportation facilities or storage facilities, thus forcing farmers to incur heavy losses and consequently forcing the marginal farmers to either lose land rights or eventually commit suicide. Hence, to steer these marginal and depressed farmers out of their apathy, some substantial reforms were long overdue and were mostly limited to firefighting measures like waving off Famer loans etc.
In comparison to the earlier attempts made at bringing agricultural reforms, the two of the total three ordinances which have already been passed by the Rajya Sabha and thus have become bills, namely,
- The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and
- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020, are truly historical and can be termed as the dawn of a new age for our marginalized farmers.
While the first Bill has ended the monopoly of cartelized traders in the APMC's, the second Bill provides a legal framework for farmers to enter into a mode of agreement with companies or individuals beforehand, best known as contractual farming. The Agricultural Produce Market Committee's (APMC) in real sense are a reminisces of the colonial era, and specifically, the Berar Cotton and Grain Market Act of 1887, whose sole aim was to control and dominate the Agricultural trade to extract maximum benefit for the colonial regime. Although these APMC's were constituted to facilitate the farmers, it quickly became the embodiment of what is known as the Cobra Effect in policymaking and served the opposite purpose. Rather than enabling the farmers, in reality, it imposed restrictions and forced them to sell their produce only via specified channels and in specified APMC's, thus allowing rampant monopoly and more exploitation of Farmers. There even were instances where farmers had to wait for months to receive full payments after selling their produce in these designated APMC's. A significant drawback of APMC's is that different states had different APMC acts as, intra-state trade in agricultural commodities is a state subject, whereas, inter-state trade is a subject of the Union government. Therefore discrepancies exist when it comes to rendering equal opportunities to farmers across the states. At the same time, farmers also lack access to these APMC's as their numbers are far below the recommended quantity.
Unlike what the opposition is trying to peddle in the name of opposing these Bills, the Union government had very well worked in accordance with the recommendations and observations made by the Standing Committee on Agriculture (2018-19). The Standing had made some critical observations on the effectiveness of these APMC's and hence made it obligatory for the Union government to free the farmers from the bondage a redundant structure. Some of the observations made by the Standing on APMC's are presented below:
1)Most APMCs have a limited number of traders operating, which leads to cartelization and reduces competition.
2) Excessive deductions in the form of commission charges and market fees.
3)Traders, commission agents, and other functionaries organize themselves into associations, which do not allow easy entry of new persons into market yards, stifling competition.
4)The Acts are highly restrictive in promotion of multiple channels of marketing (such as more buyers, private markets, direct sale to businesses and retail consumers, and online transactions) and competition in the system. (Source: PRS ).
The First Bill i;e "The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020", has successfully addressed these shortcomings and have liberalized the Agriculture sector. The Farmers are now, no longer restrained by these restrictions and are free to sell their produce at a place of their own choice, subsequently giving them an option to explore new territories in search of better value for their produce. This novel liberty will significantly relieve marginalized farmers from the clutches of intermediaries who had been receiving the maximum benefit from cartelization of these APMC's. It is also important here to notice that this Bill doesn't end the system of APMC but empowers the Marginalized farmers to bypass the APMC's and decide what benefits them the most. The Bill also aspires to provide the facility of E-trading for the farmers while prohibiting state governments from exercising fee or cess on farmers or traders and E-trading platforms for trading outside of their designated trade area.
Similarly, the second Bill i;e The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020, also provides sufficient countermeasures in safeguarding the farmers from market fluctuation thus empowering them economically. The Bill is a milestone attempt by the Narendra Modi led government in doubling the farmer's net income and at the same time providing a legal framework for contract farming. The Bill makes it mandatory to pre-determine the price at which the buyer would procure the products and also offers sufficient countermeasures and the system of Appellate authorities for dispute resolution in a time-bound manner. Both the Bills have provided adequate safeguards to the farmers while liberalizing the sector.
The opposition, only for the sake of opposing the government is running a malice program of Misinformation that, these Bills will end the system of MSP (Minimum Support Price) and thus causing unrest and anxiety among the farmers. However, the reality is Polar opposite to the hallucinations they are suffering from, for instance, MSP was and is an administrative mechanism and was never a legislative mechanism, so as, to ensure flexibility to increase and decrease MSP whenever needed. It was made abundantly clear in the Bill that MSP would remain unhindered and thus increasing competition for private players, resulting in better earning for the farmers. As farmers would sell to corporates only if they get a price better in comparison to MSP readily available to them. Data also support this argument as, the number of farmers availing the MSP facility has only doubled in the recent years, for e;g: during the UPA regime (2009-2014) 1.52 lakh metric ton of pulses were purchased under MSP, and in the just first five years of the NDA government it propelled to 76.85 lakh metric tons.