It is October-November, the time of Kharif harvest. The farmer has just started harvesting soybean or maize crop in Bihar or Madhya Pradesh. Usually, he wakes up at 4 a.m. and loads his produce, perhaps 1 tonne or less, into a truck or tractor and takes it to a mandi which may be 50 km away. He reaches there with the hope of reaching there, saying, Rs 1,800 per quintal for maize or close to 4,000 per quintal for soybean, which is the broad minimum support price (MSP) benchmark. After following all the proper procedures, he puts his stock for sale in the mandi. Buyers, usually a closed group, offer 1,500 more 3,500 respectively, which is not acceptable. The farmer decides to wait for a better deal. However, by 4 pm, they find that the prices have dropped. 1,400 more 3,200. The buyers know that the farmer has to catch the 5 o’clock bus, the last available bus, and return to his village. The reason he cannot hold his stock for the next day, he cites, is because the same story is likely to continue. Besides, his family would have harvested more by then. Hence a disappointing sale.
The agricultural law giving farmers the right to sell outside the mandi would have saved them from this story game. In a way, it reinforces something already in place called the Model Agricultural Produce Marketing Committee (APMC) laws of 2003, which have been enacted by more than 16 states to give farmers this right. They can sell their produce wherever they want. Andhra Pradesh, Telangana, Tamil Nadu, Maharashtra, Bihar and Karnataka are some of the states that allow this. The horticulture produce we see being carried in Mumbai today is an expression of that. However, the traditions persist. For example, Bihar, which has almost completely implemented these laws and repealed its APMC monopoly, is still on the way to the Kisan Mandi.
Why should farmers oppose an all India law on this? After all, we have an operational eNAM (e-National Agriculture Market), which offers an alternative market that has not resisted. Clearly, powerful lobbies in Punjab, Haryana and Uttar Pradesh are up in arms, as rich farmers fear loss of hegemony. Their role in the year-long agitation against the three agricultural laws enacted in 2020 has been clearly visible, though small farmers did not complain. Nor did this protest spread to other states. Why were they confined to North India?
This is where the second law comes in, which promoted contract farming. This too has been going on for a long time. Tata Group, Reliance, Big Bazaar (Bhavishya) and Godrej have tie-up with farmers for contract based supply of standardized quality agricultural products. no wonder we pay 50 per kg for onions at their outlets, even when the shortfall exceeds the market prices by . pushes up from 80 per kg. By cutting out the middlemen, the farmers get much higher compensation. The lobby of the ranch doesn’t like this. So what does it do?
The issue of MSP has been raised on a hypothetical scenario that the laws would allow India Inc to enter the sector and initially pay higher amounts to farmers, but the government would gradually withdraw MSP purchases, and once that was done. After that, bad corporate houses pay them less, leave them helpless as APMCs dry up. Sounds fictional? Yes, but the gullible will fall for this story, even though the government has assured that the MSP will remain. While support prices are announced for all important crops, they are active only for rice and wheat, which the Food Corporation of India buys in bulk for our public distribution system (and buffer stock).
Unsurprisingly, it is observed that in contract farming, farmers often reneged on contracts and sell elsewhere when prices are high, and companies on the other hand find it difficult to initiate legal proceedings. Potato and tomato farmers as well as soft-drink firms have had this problem in the past.
The third law met less resistance, as it only stated that the Essential Commodities Act was to be withdrawn and that stock holding at the retail or wholesale end would apply only under specified conditions.
The problem with India’s agriculture sector is that it employs about 60% of our workforce and contributes just 15% to the economy. Yet, the farm lobby, which includes landlords, large-holding farmers, middlemen and APMCs, is still very powerful and dominated by small and marginal farmers, who are driven to believe in doomsday predictions. It is true that these lobby groups provide informal assistance to landless laborers and farmers in the form of loans, buybacks, advice etc. It fosters closer ties that allow farmer leaders to vent their concerns without making room for understanding the real situation.
Repeal of these laws would be very unfortunate as it may mean that we are unable to commercialize agriculture for an extended period. The fact that agriculture is constitutionally a state subject means that the Center has limited power over it, unless the states are taken together. The central government may be forced to withdraw these laws because it needs to be in power to effect reforms, and if the three states turn hostile, its future agenda will be in jeopardy.
Can we ever go back to enforcing these laws? The answer is ‘yes’, and for this to happen, the government needs a strong communication strategy, which effectively communicates its benefits to all farmers across India. It will be a long battle that will require patience and perseverance, but it can be done.
Of course, it will take time. States that are more open to these ideas and have brought in model APMC laws can serve as case studies to be publicized among farmers from other states. A large number of people need to be convinced that these laws are in their interest.
Madan Sabnavis is the author of ‘Hits and Mrs: The Indian Banking Story’.
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