Finally Three Farm Bills Accorded Final Assent By the President

Opposition blocked roads, opposition blocked rails, opposition members screamed to the hilt in Parliament as never seen before, opposition MPs like learned Derek O’ Brien attempted to himself tear the Rule Book in Rajya Sabha, Deputy Chairman was physically threatened by some members, AAP MP Sanjay Singh physically assaulted a Rajya Sabha marshal and dragged him by his neck, mike was broken and what not due to which 8 MPs had to be suspended from Parliament!  But all this could not stop the three Farm Bills from being accorded the final assent by the President on September 27, 2020 and this has culminated in it becoming a law which now no one can stop from being implemented. The legislations which were published in the government gazette on September 27 itself will come into force immediately.

Who is President Ram Nath Kovind? Does he not know law that Opposition members were urging him to intervene? Is he just a 10 pass or an illiterate? He is a Law graduate and also Commerce graduate who inspite of clearing the most prestigious Civil Services exam opted to practice in Law as a lawyer and in 1978 he became the advocate-on-record of the Supreme Court. He practiced in the Delhi High Court and the Supreme Court till 1993 for about 16 years. He served as the Standing Counsel for the Central Government in the Supreme Court from 1980 to 1993. He has been Rajya Sabha MP for 12 years from 1994 to 2006. He himself comes from a rural background and used to travel 8 km to attend his school. He always provided pro bono aid to weaker sections of society and he himself has risen from the weaker section and from farmer’s family by his sheer dint of hard work which even God cannot deny! Still how despite all this can anyone raise question marks on his intellect or his impartiality?

Opposition must stop playing to the gallery and accept what has now become a law! It goes without saying that Punjab parties vie for farmers vote. Both Shiromani Akali Dal and Congress are competing to showcase themselves as farmers true representatives.

While it is true that Agriculture is a State subject but what is equally true is that Centre is fully empowered under Article 249 of the Constitution to intervene when it feels that it is necessary to do so in the national interest! Union Agriculture Minister Narendra Singh Tomar minced no words to say bluntly and boldly that, “Who are the people who are saying MSP will be done away with? The ones who ruled for 50 years. MSP is an administrative decision of the government of India. MSP was there, is there and will continue. Nobody should have any doubt on this issue. While MSP for rabi crops has been given, it will be announced soon for the Kharif crops. Agriculture Produce Market Committee Act is a state law and the Centre would not interfere with that. Farmers will have the choice to sell in mandi as well as anywhere – in their state or outside the state.”

Tomar voiced his grave concern on some issues with APMC which were harming farmers interests. As for instance, he said: “In Punjab, a 8.5% tax is levied which has to be borne by farmers. Moreover, the farmer would have to take his crop to the mandi and pay at the price announced. Not doing so would mean he would have to bear the cost of taking the crop back and of bringing it back to the mandi again.  The new act will ensure no tax is levied and farmers are given payment promptly or within three days in special cases. I want to tell farmers organizations that these laws will bring revolutionary changes.” Till now there are 22 states that allow direct purchase outside the mandis, therefore, the whole question of mandis losing relevance is not just misplaced but also irrational!

According to a gazette notification, the President gave assent to three Bills: 1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, 2. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 and 3. The Essential Commodities (Amendment) Bill 2020. Union Agriculture Minister Narendra Singh Tomar clarified that the farm bills passed in Parliament do not have provisions to end markets controlled by the Agricultural Produce Market Committees (APMCs) as is feared by some farmer groups. He also added that while older laws had no provision to guarantee when payment would be made to farmers, the new laws assure that payments will be made within three days at the most.

Swaminathan S Anklesaria Aiyar who is an eminent journalist and who never fights shy of criticizing Centre including the present dispensation whenever he feels necessary to do so fully supports the farm laws and in his most enlightening and awakening editorial titled “Farm laws to bring more freedom and better prices” dated September 27, 2020 in ‘The Times Of India’ while hailing them clearly, cogently and convincingly points out right at the outset that, “Opposition parties and some farmers organizations have protested against three new agricultural reform laws. These provide much-needed reforms that will help farmers get a better price by cutting out middlemen and improving marketing efficiencies. The protests arise from false accusations that the new laws mean abolition of minimum support prices (MSP) and procurement by central and state governments. The new laws give farmers freedom to sell their produce anywhere in India. Readers, ask yourselves, would you rather be free to earn a salary or sell goods or services anywhere in India or only in places designated by state governments, only after paying middlemen a commission, and only after paying a tax to state governments (akin to the mandi tax paid by farmers)? That would be condemned as an outrage. Farmers must be as free as non-farmers to buy and sell anywhere in India. Opposition parties claim freedom to sell will mean the end of government procurement at MSPs. That is a plain falsehood. The government will continue procuring some (though not all) produce at MSPs. How else will the government get the grain for ration shops? Alas, we live in an era of fake news.”

Chetan Bhagat who too is fiercely independent in voicing his opinion always, is a world famous author and was included in Times magazine list of World’s 100 Most Influential People in 2010 has also hailed it and in his enlightening editorial titled “Liberating Indian Farmers” dated September 26, 2020 in “The Times Of India” too has termed it in his last para as: “The farm bills are a necessary step in the evolution of the Indian farmer. Our farmers deserve the benefits of globalization as well. The bills are a step towards opening up the Indian economy, which is the need of the hour. These bills give the farmers more choice on how to sell their products, and if done right, can enhance their returns. Our farmers have always had respect and sympathy from citizens. It is about time they also had something else – choice.”

Ashok Gulati who is none other than the Infosys Chair Professor for Agriculture at ICRIER  in his enlightening editorial titled “The farmer’s freedom to sell” in The Indian Express dated September 28, 2020 very commendably points out that, “The bills – The Farmers Produce Trade and Commerce (Protection and Facilitation) Bill, 2020 (FPTC); The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 (FAPAFS); and The Essential Commodities (Amendment) Bill, 2020 (ECA) – have to be seen in totality. Essentiality, the FPTC breaks the monopolistic powers of the APMC markets, while FAPAFS allows contract farming, and ECA removes stocking limits on traders for a large number of commodities, with some caveats still in place. The economic rationale of these pieces of legislation is to provide greater choice and freedom to farmers to sell their produce and to buyers to buy and store, thereby creating competition in agricultural marketing. The competition is expected to help build more efficient value chains in agriculture by reducing marketing costs, enabling better price discovery, improving price realization for farmers and at the same time, reducing the price paid by consumers. It will also encourage private investment in storage, thus reducing wastage and help contain seasonal price volatility. It is because of these potential benefits that I had compared these pieces of legislation to the de-licensing of industry in 1991 (‘A 1991 moment for agriculture’, IE, May 18). I had also suggested that for these legal changes to deliver results, we need to create Farmer Producer Organisations (FPOs) and invest in marketing infrastructure. In that context, it is good to see that Prime Minister Narendra Modi has initiated programmes for the creation of 10,000 FPOs and an Agriculture Infrastructure Fund (AIF) of Rs one lakh crore to handle post-harvest produce, anchored largely with FPOs. The payoff will be very high. It will make Indian agriculture globally competitive and benefit farmers and consumers alike. But then why is there so much opposition? The Congress is leading the charge. But its manifesto for the 2019 general election said, “Congress will repeal the Agricultural Produce Market Committee Act and make trade in agricultural produce – including exports and inter-state trade – free from all restrictions”. And further: “We will establish farmers’ markets with adequate infrastructure and support in large villages and small towns to enable the farmer to bring his/her produce and freely market the same” (points 11 and 12 of the manifesto under the section on “Agriculture”). I fail to understand how this is different from what the three bills are about? I don’t have any political affiliation, but all my professional life has been spent in analyzing agri-policies: I have found how farmers in India have been implicitly taxed through restrictive trade and marketing policies. This is so much in contrast with China and other OECD countries that heavily subsidise their agriculture. So, the freedom to sell is the beginning towards correcting this massive distortion and that’s why I welcome this move.”

Honestly speaking, never in my life can I ever dare to dream to write with so much precision  and so effectively, elegantly and exemplary as Ashok Gulati has written which is why I have quoted him so extensively. He further cogently and commendably points out that, “But the Opposition has now changed the goal post. It is asking MSP to be made legal implying that all private players buying below this price could be jailed. That will spell disaster in the markets, and private players will shun buying. The government does not have the wherewithal to buy all the 23 commodities for which MSP is announced. Even for wheat and paddy, it cannot assure MSP throughout India. The reality, as the 70th round of NSSO on Key Indicators of Situal Agricultural Households in India shows that only six percent of farmers gain from MSPs. Roughly the same percentage of value of agriculture is sold at MSPs. The rest of the farming community (94 percent) faces imperfect markets. It is time to “get agri-markets” right. These farm bills are steps in that direction. Some states fear losing revenue from mandi fees and cess. The Centre can promise them some compensation, for say 3-5 years, subject to reforms in APMC markets.”

PK Joshi who is fellow at National Academy of Agriculture Science said that, “These farm bills are historic. Farmers will get freedom to sell their produce to anyone and anywhere. This will act as a marketing channel to APMCs giving bargaining power to farmers. Contract farming would empower farmers to engage with large buyers and insulate them from risks. Due to prior price determination, farmers will be shielded from the rise and fall of market prices.”

Major farmer bodies have welcomed farm bill. P Chengal who is Chief Adviser of Indian Farmers Association said: “Farmers welcome the APMC reforms initiated. APMCs were started for the benefit of the farmers. But they were at the mercy of the artiyas and the middlemen. We can now directly enter into contracts with large scale retail, the processing industries or for export purposes.” Similarly Anil Ghanvat who is President of Shetkari Sangathana from Maharashtra also affirmed that, “The farm bills remove the compulsion on the farmer to sell at the APMC.”

There is no reason why the farm bill should not be given a chance. I myself am not a blind supporter of any party. I have differed with BJP many times. But on this key issue I feel that the intention of the government is good. I fully, finally and firmly believe that PM Narendra Modi is right in saying that, “Farmers now have the power to sell their produce anywhere and to anyone and they have the freedom to grow any crop and to sell it at a price best suited to them. I assure my farmer brothers and sisters that the system of MSP and government procurement will remain. These bills are really going to empower the farmers by giving them many more options. This agrarian reform will provide new opportunities for farmers to sell their produce, which will increase their profits. With this, our agriculture sector will get the benefit of modern technology whereas the farmers will be empowered.”

Why should farmers not be saved from the rent seeking behaviour of the traditional intermediaries called arhatiyas or middle man? Why should farmers sell their produce only through the ‘exploitative’ arhatiyas in the APMC mandis as we have seen till now? Who can deny the data that shows more and more farm produce is being sold already to private players via MSPs?

How can we deny there are so many past examples where we have seen how government’s decision to protect the consumers from higher prices have only culminated in farmers being robbed of the higher prices a free market could have provided them and this is why MSP embodies this distrust? Why then should this not be changed? What wrong is Centre doing by changing such archaic and outdated practices that are totally perverse to the supreme interest of farmers?

Who can deny that the state governments had not done enough to ensure that farmers are able to sell their produce at MSP and middleman exploit their helplessness? Who can deny that with competition from private markets, the APMC markets will no longer enjoy the exclusive monopoly and it is farmers who will immensely benefit now by this new law? Who can deny that farm bills now a law unto themselves do not merit the fears that the opposition parties appear to have stoked by raising a hullabaloo over it?

Sanjeev Sirohi

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