New Delhi: As the Lok Sabha passed three controversial agricultural legislations, the country witnessed an outpouring of anger by the opposition parties, who alleged these bills are “anti-farmer”.
Farmers and traders have been vehemently opposing the new changes brought in by the Central government, alleging the government wants to discontinue the minimum support price (MSP) regime in the name of reforms.
Minister of food processing industries Harsimrat Kaur Badal on Thursday resigned over the passage of these bills in the Lok Sabha, while pressure is mounting on BJP’s Haryana ally, the Jannayak Janata Party leader Dushyant Singh Chautala to quit.
The upper house on Thursday passed the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 with a voice vote. Earlier, it has passed the Essential Commodities (Amendment) Bill.
In an interview to The Wire, Avik Saha, co-founder of the Swaraj India and the party’s point-person on agricultural issues, noted that these changes are a way to corporatise food production, supply and the food market of India.
He also said that in the name of reform, the government cannot abdicate its duty to ensure that the farmer, or the producer, gets a fair price, and also ensure that food is affordable to everyone.
Edited excerpts of the interview follow.
Termed as ‘historic’ by the BJP, are these moves really going to work for the farmers? Is it a question of short-term pain versus long-term gain or is what the government is doing conceptually flawed?
It’s conceptually flawed. I would be the first one to tell the farmers to go through some short-term pains for long-term gains. We do sensible farm politics. We don’t do zindabad murdabad kind of politics. If the intent of the government was to actually structurally change the crop marketing of this country for the benefit of the farmers, we would have supported the government perhaps.
But here the intention is very clear. The writing on the wall, no matter how many times the PM tweets…. what is he essentially saying?
He is saying: ‘We understand that you need price security for your crops. We understand that we are not being able to give you price security – we the government. But we have found a solution. We are going to make this a free market so that you’re free to sell it to anyone. Because in a bigger market, you will have greater opportunity to attract buyers, and therefore, by the law of demand and supply you will get better price’
This is what the message is saying clearly, if I am speaking, let’s say, on behalf of the BJP.
But the problem with lower prices was never because of the size of the market, but because of the disparity between the contracting power of the parties. So, no matter how big you make the market, a poor farmer in front of 100 big traders will be at the same disadvantage that he is today.
So, the farmer will finally not be able to get a higher price, but in the process of a quest for a higher price will lose whatever security she has today – which is the government’s compulsion to announce MSP twice a year, purchase certain food crops (practically only two food crops) at MSP through the public distribution system, and step in and stop price crashes by market intervention schemes.
Now what will actually happen is this: all the trade will go out of the farm markets, which are imperfect markets and need a lot of correction; but it’s like saying that I have a boil in my leg and so let me just cut off my leg. So instead of correcting the imperfect APMCs, the government is taking all the trade out of the APMCs. The whole process of price discovery will be gone.
Today I can tell you right now how much chana is selling below MSP in a particular mandi in Karnataka because it is put on a government website called “Agmarknet”. When the trade moves out into the open, uncontrolled, unknown market, there will be no information in “Agmarknet”. There will be no way of knowing.
So, in my view, the whole problem of farmers not getting price and this becoming an agitational and electoral issue is being attempted to be hidden by this government to make the problem disappear, and publishing the prices below MSPs will not happen anymore.
When you go through the Bills, fundamentally, as I come back to my original point, the intent is twofold. The intent is not written on the caption that this is good for the farmers and benefits them.
The intent is: first, the government’s abdication of the responsibility of being accountable for fair prices to farmers. Second, our fears will be proven right if they proceed with this “nonsense” that the market will be captured and monopolised by very large business houses.
Basically, you mean this will neither help the producers nor the consumers.
Farmers allege that in the name of reforms, the government is planning to discontinue the MSP regime. Agriculture economists like Ramesh Chand and others however say this is not possible as the system of government procurement has to continue to meet its PDS obligations. Is it justified then to claim that MSP operations will go away as a result of these bills?
Mr. Chand should be informed that PDS is distributed under the NFSA (National Food Security Act), 2013 which mentions that the provision for subsidised food is three years. The central government’s previous attorney general, Mukul Rohatgi, had argued in the Supreme Court in 2016 against NFSA – that it is about to die anyway.
He had argued it in court publicly and the law also provides that subsidised price is good for three years. Whether the PDS can be dismantled or not is a political decision; legal provision however entitles the government to dismantle it three years from 2013, which is up to 2016, but it continued past that.
And, second, even if the government continues to distribute under PDS, it has to buy it [foodgrains] from someone. Tomorrow, the government may buy it from, lets say, Mr Ambani. PDS purchases can be done from the cheapest source of supply. It doesn’t have to be purchased from the farmers.
Today, people like you and me who earn, say, Rs 25,000 and more spend roughly 25% of our earnings on food. In Mr. Modi’s free market, we could be spending 50% or 60%. How can we blame Mr. Modi – this is a free market and we have a choice of eating and not eating!
So, I see food prices going up, and this is also going to be politically very difficult for Mr. Modi because he cannot fight the “middle class”. And if the food prices go up, it’s the middle class which creates a lot of noise. But also remember that it is the middle class that is votary of free market and private enterprise.
So when the free market comes back to bite your hand, what will the middle class have to say?
Overall it is a very bleak, very sinister, design to corporatise food production. I fear the worst which is why the farmers are fighting back hard, and they will either win or die – that’s their position. Let’s see if Mr Modi understands and decides to roll it back.
How can this reform be made more palatable for farmers, since the MSP regime insures agricultural producers against any sharp fall in farm prices?
If your intent is right and your drafting is wrong, it can be corrected. I do not know of any slight of hand with which intent can be corrected. I don’t want amendments. This law in itself is an anti-thesis for the entire structure that exists.
I am the first to admit that there are lots of shortcomings in this [current] structure, but replacing that structure with this is like killing the patient. This is no cure at all.
There are so many questions to be asked. For instance, why did Modi draft the model APMC Act? He drafted it and pushed it to the states that they must adopt it. We have not argued with the APMC Act which Mr. Modi has drafted and pushed.
This [the three ordinances] is such a historic change for the farmers. Why didn’t Mr Modi talk to the farmers and explain it to them? After all, it’s for their welfare.
You will make a law, push it down their throat and tell them this medicine is good for you.
The whole process of these ordinances becoming laws is tainted, with malintent that it can’t be trusted even at face value.
Suppose the monopoly of APMCs does come to an end. What impact will this move have on farmers, traders and farmer organisations?
It’s all right to say that farmers can sell to the whole world, but they could sell even before these ordinances via the eNAM system. So what was that eNAM? And we can all go back and check his press releases where he said this [eNam] is a gamechanger. Now a farmer can sell it to anyone anywhere through electronic digital India. So was he lying then or is he lying now?
However, traders are going to have a very bad day, too. Modi’s defence today said that all these opposition parties are actually brokers of these traders and that’s why they are opposing it. I am happy they didn’t say they are Pakistani traders.
The reforms are intended to do away with the high taxes that Punjab and Haryana charge on mandi operations. States like MP or Orissa charge less… the implication being that this also explains the Punjab government’s opposition. Your comments?
The Punjab government hasn’t opposed it. Farmers of Punjab have gheraoed the Punjab chief minister’s house just as they gheraoed the former CM’s and Modi’s current partner’s house.
But India is a federal country, right? So can the Central government do something by which a tax levied by the state government to collect revenue can be undone and upset by the Central government?
Can the Central government walk in and completely change any plan of the state government? Why do we have states at all if they have no autonomy to decide their revenue sources? How will the state government run itself? Will Mr. Modi provide it? He has already failed to provide states GST. He’s a defaulter. He’s a bankrupt prime minister.
So, to compare Punjab and MP and do away with levy in mandis is to disturb the federal structure of India. It’s to sound the death knell of the Constitution of India. This law is so terribly anti-constitutional, if this is the logic they (BJP) have.
But yes, states will have an impact where they will lose revenue. Punjab gets around Rs 4,000 crore, I think, from mandis.
Why has farmer and political opposition only been restricted to a few states (Punjab, Haryana, parts of UP) so far?
Primarily because MSP operations historically happened in these states. Other states have always been deprived of MSP and government purchases. That’s something that should have been corrected.
If the government purchases 100 kilograms (kg) of paddy and there are five major paddy growing states, the government should purchase according to the production in these states.
But, the government has always purchased from Punjab, Haryana, Andhra Pradesh, Telangana and Orissa. The government does not purchase even one kilogram of paddy from one of the highest producers in the country – West Bengal.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill allows farmers to sell their agricultural produce to private players. Now if corporates, MNCs enter the agricultural play, what are the long-term implications on the agricultural economy? How can farmer fears be quelled in this matter?
My suspicion is that these large corporate players – who were till now barred from hoarding, had quantitative restrictions on the stock they can hold… all that having been removed with the amendment to the Essential Commodities Act – will grow food in the poorest countries of the world.
So, there will be a massive import of foodgrain into India.
As I had earlier said that if the middle class is charged anything for food, they will protest. The government can say: you like a free market and this is a free market. But a protest is a protest, and it impacts votes.
So, the other thing that this opening up of trade might do is that there will be a very large scale of import by these multinationals, and large Indian conglomerates from abroad to keep food prices in control.
In US, the government actually pays farmers to keep fields fallow so that there’s no overproduction.
So, food will be their business, their game. And, all of us will be pawns in that.
What are the real issues that the government should aim to resolve?
The government computes seriously and methodically the cost of producing food. Based on that, the government, somewhat unfairly, decides the selling price of food by the farmer. The government should continue to do that. It should ensure that the farmer, or the producer, is given the same attention as production is, and the farmer gets the stipulated price for crops, so that farming survives.
Seventy percent of the Indian population are directly or indirectly connected to farming and make a livelihood from agriculture because Mr. Modi doesn’t have jobs for them also. It’s not that they can all give up farming and there are jobs waiting.
And, the government should ensure that food prices despite the fair price being given to the farmers is kept affordable and within the grasp of the middle class.,
Supplying subsidised food through the PDS to those who can’t afford it – the central government is giving Rs 8,000 salary (to scheme workers) and then if they leave rice to the free market at Rs 60-70 kg, a person will starve to death.
So the government has a duty to ensure that the farmer, or the producer, gets fair price, and has a parallel duty to ensure that those who cannot afford that price get food at the prices they can afford and the difference between them should be subsidised by the government.
And, world over, governments do it. I am not talking about developing countries, I am talking about developed countries.