The Indian Agricultural Acts, 2020: The Facts and the Politics of false Propaganda
“Jai Jawan, Jai Kisaan”—When the second Prime Minister of India, Sh. Lal Bahadur Shastri ji gave this slogan in 1965 he was not any more patriotic or farmer-loving, than the current fourteenth Prime Minister of our nation, Sh. Narendra Modi ji, when he sought to introduce the Farm Bills in mid-2020, that became the Indian Agricultural Acts in September, 2020. His words “We cannot deal with 21st-century agriculture with an 18th-century mindset” reflected his ideas as that of a visionary, a thinker and a reformer, having the best interest of the nation and its stakeholders, including the farmers, at the core.
Seeing everyday pictures of the protesting “farmers” in AC tent houses with free electricity and other amenities of comfortable living being provided to them at the protest sites, from the tax payers’, i.e. yours and mine, hard earned money, I decided to pen down my thoughts on decoding these Acts and to make the readers think and analyse for themselves as to what actually, if anything, is contentious in these Acts, and to understand that these protests are actually more political than farmers’ issues based.
Let me begin with a discussion of the key highlights of these Acts and an unbiased analysis of the same. The Indian Agricultural Acts, 2020, are a combination of not one, but three different Acts passed for reforming the decades-old agricultural practices. The first of these Acts, Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, allows farmers to engage in trade of their agricultural produce outside the physical markets notified under various State Agricultural Produce Marketing Committee laws (APMC acts). Also known as the ‘APMC Bypass Bill’, it will override all the state-level APMC Acts. Basics first, for those of you unversed with what an APMC is and what it does—An APMC, also popularly known as a Mandi, is a marketing board established and regulated by the State Governments in India, wherein a farmer registered with a particular APMC, could sell his/her produce only in that APMC.
Presently, in India, there are roughly about 2477 principal APMCs, based on geographical locations, and 4843 sub-market yards, regulated by the respective APMCs. Simply put, this translates to about 2500 different sets of rules and regulations governing the similar agricultural products! When the global citizens are moving to One World-One Market theory, the critiques of this Act are not even willing to accept the One Nation-One Market theory! Does it not sound archaic and primitive for a nation that is striving and aiming to be counted as a developed nation rather than a developing one? Talking about the benefits of this Act for the farmers, the farmers would be free to trade anywhere, with anyone, within the country, with no levy of any trading licence, fee, cess or any other charge upon their produce and without the involvement of any intermediary.
The covid pandemic has actually shown us that trading and businesses could flourish without direct contacts too, if the producer and the seller are themselves connected, even if remotely, through electronic or other means. Not to mention of the forward and backward linkages such direct dealings would set in motion in terms of flourishing of transport and communication businesses. Do these provisions of this Act sound as a reason to protest by any sane mind? No, they do not.
Coming to the second Act now, namely, the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020. This Act seeks to provide a legal framework to the farmers to enter into pre-designed agreements with the buyer, also popularly known as contract farming, mentioning the quantity and the price of the produce that shall be traded. There is also provision of a three-level dispute settlement mechanism for any disputes that may arise out of these contracts. These contracts have to be drawn upon mutually agreeable terms and can include variable prices too. In such a situation, the Act provides for including a guaranteed price to be paid, as well as clear references for any additional amounts the farmer may receive, like bonus or premium.
To the extent that there is no provision of a Minimum Support Price (MSP)-the price at which the government stands as a guarantee to purchase the produce in case of a bumper harvest and the associated likelihood of falling prices-Modi jee himself mentioned the importance and implicit presence of the MSP in September 2020 itself and went on to reiterate the same in February 2021 as well. In fact, he had invited the Farmers Union for a clause-by-clause discussion on these Acts and an explicit inclusion of MSP too, if discussion yields this conclusion. However, the proposal for dialogue has been declined by the Farmers Union and the protest continues till date. Does this not seem as a political agenda–as a will to not settle the issue, but to let the sentiments keep simmering for political goals of some? To me, it certainly does.
About the third Act, the Essential Commodities (Amendment) Act, 2020, this Act seeks to remove foodstuff such as cereals, pulses, potato, onions, edible oilseeds, and oils, from the list of essential commodities and also seeks at removing stockholding limits on these agricultural items, except under “extra-ordinary circumstances” that include war, famine, extraordinary price rise, and natural calamity of grave nature. The rationale behind the introduction of this Act is that it seeks to restrict the powers of the government with respect to production, supply, and distribution of certain key commodities, thereby giving the farmer or the seller unrestricted option to stock commodities in cold storage, warehouses, etc., as a buffer to be used at times of crop shortages.
This gives freedom to produce, hold, move, distribute, stock supplies, etc. of all commodities without governmental restrictions, thereby acting as a catalyst in promoting investment in agriculture infrastructure like transporting, warehousing and other storage facilities. The arguments being put forth as critiques of this Act are two pronged–one, that the ease of stocking will lead to heavy imports of these commodities, further leading to highly volatile prices and two, this in turn would promote hoarding by big players, to be released at high prices at times of shortages.
A minute of logical thinking is all that is required to see these criticisms as mere false propaganda because the fear of excessive market price fluctuations against the farmers’ interests, due to excessive supply, automatically gets eased off with the addition of the MSP clause. Regarding the excessive inflation, the Act itself provides for government intervention at such times. For this Act too then, I would repeat my question– Do the provisions of this Act sound as a reason to protest by any sane mind? The answer once again is no, they do not.
Besides the specific features of these three Acts as stated above, the Acts are also being criticised on the count that these will lead to a decline in revenue of the states on account of loss of cess, fee, etc. collected from the farmers under the APMC Acts. This is a valid point no doubt, but a careful analysis tells us that this is rather something that the farmers should be rejoicing about, rather than protesting. Their burden of unwarranted payments has actually reduced! As for the states, the mechanism of Finance Commission transfers does take care of the lost revenue and objectively distributes resources among all states from the centrally divisible pool. Hence, this too is no basis for the farmers to continue with the protest.
At a time when the volatility on the international front is unprecedented, the nation needs to stand together as one. Politically motivated movements like the Farmers Protest only go on to weaken our domestic structures and presents a vulnerable picture of ours to the world outside. One visit to these protest sites is all that is required by the common man to see how state-of-art facilities are available there. It pinches my heart to see our tax payers’ money being squandered away by the state government like this, and that too with no account of such spending.
It is high time that we, the people of India, see through the mind games being played by some to satisfy their political agendas. Let us pledge ourselves to the cause of the nation and decide to go and educate the actually poor farmers on the state borders, whose sentiments are being played with. If settlement is their real aim, then the negotiation window of the government is always open. Let us use the power of jan sailab to educate and convince the farmers to think and act with full knowledge. Let us awaken ourselves and our farmer brothers and sisters, for India to be awakened once again.
Jai Jawan, Jai Kisaan
Mat ban kisi ke khel ka nisan,
Aur kar baith apna he nuksan!
Dr. Deepti Taneja,
Ph. no.: 9811667409
The writer is an Associate Professor of Economics in Delhi College of Arts & Commerce, Delhi University. The opinions expressed in this article are her own and do not purport to reflect the opinions or the views of the institution to which she belongs.
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