The new farm bills: what are the government's propositions and what are farmer's objections

Even though India is an agricultural economy, agriculture is not considered as a lucrative business option. 86% of the farmers are marginal farmers meaning that they have less than 2 hectares of landholdings. But the next generation is not willing to continue with their father's marginal farming and are moving towards cities for better employment options and better facilities. There should be some reforms so that these small and marginal farmers get better technological assistance, better marketing facilities, better loan support. The reforms should be towards insurance for their crops and a mechanism to support them even when their crops get destroyed due to poor weather conditions, and when the market prices crash they have a guarantee of minimum support price by the government. Such reforms are sought for many years now through many committees and by successive governments. This government has made some reforms. Let's see what they are and how it will help the marginal farmers.

The three new farm laws

The present NDA government has brought in three new farm laws. These had first come in June as the three Ordinances before being approved by the monsoon session of the Parliament.

1.The Farmer's Produce Trade and Commerce ( Promotion and Facilitation) Act.This Act allows the farmers to sell outside the APMC (Agriculture Produce Market Committee) mandi. Anybody who has a PAN card can buy directly from the farmers on mutually agreed price and the mandi tax will not be levied on this trade. Later the government proposed that the same tax, fees and cess will be levied on the private traders as is levied on the government mandis and the traders will also be registered by the state governments.

2.The Farmers (Empowerment and Protection) Agreement Of Price Assurance and Farm Services Act. This act allows farmers to do contract farming and sell their crops freely.

3.Essential Commodities (Amendment) Bill. This act is an amendment to the already existing Essential Commodities Act. This law frees some more commodities for trade except in case of extraordinary situations or crises. Such commodities are foodgrains, pulses, edible oils and onions.

The Government's Proposition

The main argument supporting the three laws is that these agriculture reforms are similar to 1991 economic reforms which opened the economy to the globalized markets. It is proposed that through these new reforms new opportunities will open up for the farmers so that they can earn more from their farm produce. The government said that there will be an increment in the private investments which in turn will strengthen basic farm sector infrastructure. Since the food markets are growing all over India, the private sector can increase the profits of the farmers.

Farmer's objections

One of the major objections of the farmers is that when private mandis will compete with state-run APMC, all the agriculture business will be shifted towards the private sector. For this, examples of Jio and BSNL are given. Though BSNL is still functional, Jio has taken over the telecom market. Similarly, the APMC mandi will become redundant because the government will deliberately delay procurement. They fear the end of government markets, commission agents, and the APMC system. Only big traders and companies will operate in the markets and will be controlling the prices. The private players may prove to be a bigger middleman than the existing ones.

The second point of disagreement is that the farmers fear that the government will do away with MSP. Even though the government has agreed to give written assurance for the continuation of the existing MSP system, the farmers are not convinced and have trust issues with the government. They demand that the government should employ a comprehensive Act on MSP which should be panning India and includes all crops.

The third objection is if the private traders indulge in business malpractices, how will the farmers be shielded. Anybody who holds a PAN card can procure products from the markets and if they indulge in hoarding, how will that be regulated? The government proposed that the state government will do the registration of the traders to regulate the traders. But farmers are not convinced with this policy of the government of passing the responsibility of registration of traders to the state government.

The fourth objection is that under contract farming the large companies may take over the land of the farmers under various clauses. To put rest to their apprehensions the central government proposed that there will be no sale, lease and transfer of land during the period of a contract agreement. But the farmers are apprehensive because in the past there have been cases of sugarcane farming where the procurement was not done on the excuse of poor quality or payments were held for a long time. In such cases, the farmers are unable to repay loans and are forced to sell their lands.

Concluding thoughts

From a lot of discussions, one thing is very clear that the government intends to give more options to the farmers regarding where they sell their products to increase their profits and to bring in private investments to improve the infrastructure and technology in the agrarian sector.

But if the same thing was to be done by the government itself rather than the private sector the farmers may have been convinced. But since farmers are the vulnerable sections of the society they are apprehensive to trust the private sector to do such good to them without a price. So the apprehension of the farmers is not unwarranted. Only time will tell what effect such reforms would bring. On the other hand, Jio is a private company but has given better services to people than BSNL. But the government's role is imperative in matters of food security. So with new reforms, measures should also be taken to safeguard the interest of the farmers as sellers and also as major consumers of farm produce.