The fears about farm reforms are misplaced
The three bills enacted into law recently have been farmer-centric and far-reaching. Agricultural growth, in independent India, has passed through many phases. The new laws are in sync with input subsidy, minimum support price, government procurement and distribution of foodgrains, introduction of contract farming through the model Agricultural Produce Market Committee Act.
The share of agriculture workers in the total workforce of the country has come down from 69.9% in 1951 to 54.6% in 2011, according to the Census. In the corresponding period, the share of agriculture as part of the Gross Domestic Product (GDP) output has declined from 51.9% to 14.4%. The fall in employment share is not commensurate with the decline in the GDP share. The agriculture sector uses a workforce which far exceeds its economic value. The average income of an agricultural household as against its average monthly consumption is nearly on par.
India’s agricultural policy right from Independence was geared towards food sufficiency. Remunerative crop pricing was never a priority. The standard approach towards increasing farmers’ income was always about devising supplementary means in the form of animal husbandry, poultry, fisheries and bee-keeping. This continued as a matter of policy even after we moved from food scarcity to food surplus.
The Green Revolution is seen as the success of new technology, which brought with it high-yielding crops. However, what is often overlooked is the role of farmers. Since 1955, foodgrain imports from the United States (US) under the PL-480 scheme, in excess of market requirement, kept the prices artificially down. This resulted in farmers becoming demoralised. However, when imports were reduced to realistic levels, farmers felt the incentive to produce more. This is what we need today.
Prime Minister (PM) Narendra Modi has advocated “doubling farmers” incomes by 2022 from the levels of 2016. He spoke of remunerative pricing in this regard.On April 13, 2016, the government set up a Committee on Doubling Farmers’ Income chaired by Dr Ashok Dalwai. The committee, after consultations, came up with 14 reports. The farm laws were based on the insights provided by this committee.
There are 23 crops, including 14 kharif, seven rabi and two calendar-year crops for which the government notifies the minimum support price based on the recommendations of the Commission for Agricultural Costs and Prices. There is no legal prohibition to a farmer selling his/her produce in an open market in pursuit of a better price. What, however, was missing was a legal and marketing architecture to protect and incentivise the farmer.
The minimum support price, since its introduction in the 1960s, has remained focused on the wheat belt of Punjab, Haryana and western Uttar Pradesh. In the rice belt of eastern Uttar Pradesh, Bihar, Jharkhand, Chhattisgarh, West Bengal and Assam distress sales were often reported. Today, the wheat belt farmers is agitating, based on the misperception that the minimum support price will be withdrawn. The fact is that the government has provided a better minimum support price over the last six years, and will continue the policy as witnessed by the recent procurement through the minimum support price. The new laws will provide better choices with adequate safeguards to the farmers.
The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, provides farmers with a choices that have been denied to them so far. It does not replace the system of Agricultural Produce Market Committee-run mandis, government procurement, or minimum support prices. The 62nd report of the Standing Committee on Agriculture — Agriculture Marketing and Role of Weekly Gramin Haats — highlighted the mess the Agricultural Produce Market Committee-run markets are in.
There has clearly been a political usurpation of a democratic institution. In some states, the market fee is levied even for trade transactions taking place outside the market yard, whereas in some states transactions outside the market yard are illegal.
A farmer cannot go to a mandi other than that with which he/she is registered. In reply to my unstarred question (No.328 dated February 4), the minister for agriculture said that the government has decided to develop existing 22,000 gramin haats into full-fledged gramin agricultural markets.
The fear that market yards will disappear is unfounded. If we continue to do things as before, we will continue to get the same results. We have been hearing of farmer suicides and distress.The prime minister is bringing in positive changes and trying to empower the under-privileged. Let us be part of the solution and not the problem.