WORRIES OF FARMERS AND ALTERNATIVE SOLUTION TO FARM LAWS

WORRIES OF FARMERS AND ALTERNATIVE SOLUTION TO FARM LAWS
After the rollout of three debated farm legislation, the country has been witnessing protests in various parts of the country. Farmers/traders are fervently opposing these laws and alleging them to be anti-farm bills. They allege that under the disguise of these farm laws reforms government is trying to abolish the minimum support price system. It has been many weeks since the farmer protests and choking the highways to Delhi, the government and the farmers have held round after round of talks that have not really resulted in anything. Farmers are consistently adamant on repealing of three new farm laws and write MSP into law while on the other hand, the government has been saying; these laws would be a boon to the agricultural industry and to farmers. The questions which pop up in everyone’s mind is that why are the farmers worried about MSP being removed when they aren’t actually written in law. The second question is that when middlemen who are notoriously known for exploiting farmers are being removed through these laws then why farmers have a problem with that? The last question is that aren’t private companies more capable of offering a better price than previously existing APMC’s. [1] These questions become important because APMC mandi’s aren’t exactly the perfect system, and previously farmers have complained about them, and have demanded reform as well. But there are a lot of nuances to this issue, which needs to be addressed. On multiple occasions the government has explicitly said, doing away with the minimum support price or MSP has never been the intention of the new laws. Technically speaking this is not false. In fact, the farmers produce trade and commerce promotion, and facilitation act the most controversial of the laws does not mention the MSP would be abolished. Neither does it say that the APMC’s will be eradicated. According to the center, what the laws do is that they merely create a parallel system, which means that the farmer can now choose to sell, either at the mandi or with a private company. In fact, the government has expressed confusion over why the protests are happening at all. Especially because, according to them, new laws are for the benefit of the farmer

Farmers have countered this by pointing out that while eradicating the APMC’s may not be explicitly written into the law. It is implicit in its design. The farmers are raising such concerns because of certain reasons. So currently, farmers sell their produce in a mandi, they have to pay a tax. For instance, in Punjab, the tax is 8.5%, and in Haryana at 6.5%. Now as per the new laws, if a farmer sells his crop outside of Mandi to any private party, he is not required to pay this tax. Naturally, this is an incentive for the farmer to sell their produce outside mandi’s, and as more and more farmers sell outside over a period of time eventually, the APMC system will become redundant. Also, these Mandi’s themselves get money to operate from this tax component. The tax collected help in the maintenance of mandi’s. It’s used to maintain the roads that connect the mandi to the villages. Now, if the Mandi can’t maintain themselves, they won’t sustain. The greater fear is that any private company will want to drive out their competitors. And in this case, the Mandi will be the competitor, and it will be the private company’s intrinsic intention to make sure that the mandi is out of business.
There is another reality to consider. If a private company enters into a contract with a farmer, the contract will be for a particular amount of crop. Often farmers have surplus crop which is sold at the mandi at MSP rate. The fear is that if the Mandi system dies out, there would be no buyer left for such crops. In addition to this, since market prices are usually determined based on supply and demand if there is a surplus crop, then the market prices will crash. Once the prices shoot down farmers won’t have any negotiating power with the private players, while selling their produce.
Another crucial aspect of the mandi system is of the middlemen/arhtiyas, and the government has been going on and on about how these farm laws are favoring farmers by removing the middleman.
The problem actually lies with the term middlemen, it carries a negative connotation of a person who comes in between a buyer and a seller to jack up the prices and exploits the farmers in the process. In reality, the job of middlemen in the case of farmers has a distinct reality. They are not actually an exploitative entity, but a service provider, their job is mainly to help the farmers to load, unload, clean, package the produce. For this service, they are paid a commission, which is about 2.5% of the sale price. Now, if the Mandi system dies out, along with these middlemen, it will lead to two additional issues.
Number one, if these middlemen/arhtiyas are done away with then who is going to help the farmer, with all the work that these middlemen are paid to do. In Punjab alone, there are about 48,000 arhtiyas. They also employ additional labor, accountants support staff, etc. So the ripple effect of the mandi’s dying out actually means lakhs of people losing their jobs. The second worry is that the private companies might suck in the arhtiyas as labor. This means the arhtiyas backed by a big corporation will suddenly have far more power over a farmer, so in that sense what is currently a person to person relationship will suddenly turn into a person to big business relationship. This leaves the farmer in a weaker negotiating position. Another major worry is that the new law says, if a farmer and a private company have a dispute, then it has to be settled by a sub-divisional magistrate or collector, instead of a civil court. As we know that these bureaucratic offices, work far too slowly, and are quite corrupt. Now they might lose out in matters involving dispute resolution too. These are few technical anxieties regarding the new laws, but the crux of the protest lies in two things that the government did, and the farmers are really worried about. The first one is the way through which the laws were brought in. Farmers are unable to fathom why bills on farming would be bulldozed through the Parliament and be arrogantly enacted through an ordinance, they feel that even though it is they who work on soil and leave food on everyone’s table, the government, never thought it necessary to consult them regarding the agricultural reforms. These have made them highly suspicious of the government’s intentions.
The second reason for their worry is about the narrative, the people in government are calling these new laws, pro-farmers bills. On the ground, the simple logic is that if farmers have not been consulted when they are protesting and trying to express some of their real fears. How can these laws, be called pro farmers. On top of this, there is the whole narrative trying to spread across the country that these farmers are being misled. The underlying assumption is that the farmers don’t understand this law. The narrative that farmers don’t have the mental ability to understand these laws has made them feel humiliated and belittled. It is obvious that there’s a lot of anger towards the central government, because while there may be technical issues, it is this erasure of trust, and being belittled by the center, that has fired up the protest.
These laws look beautiful on paper but have various lacunas. These lacunas could be addressed and the agricultural industry could be transformed only when the government could be more inclusive in planning as well as decision-making procedure. These legislations certainly need various amendments before the theoretical advantages of the laws could become a reality. Or the government instead of creating a parallel system could have brought transformative changes in the existing APMC mandi system. Most importantly the demand of writing MSP into laws is more of a question of dignity to farmers which they are entitled to.[2] [1] Agriculture produce and livestock market committee https://enam.gov.in/web/stakeholders-Involved/Apmcs
[2] https://www.downtoearth.org.in/blog/agriculture/farm-laws-2020-who-are-they-meant-to-serve–74540