The BJP government’s farm bills—the Farmers’ Produce Trade & Commerce (Promotion and Facilitation) Bill, 2020, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 & the Essential Commodities (Amendment) Bill, 2020—passed in the monsoon Parliamentary session, have led to a series of events: a union minister’s resignation from the cabinet in September, incidents of farmer suicides, & nationwide protests by various farmer organisations since November.
Farmers’ Produce Trade & Commerce (Promotion and Facilitation) Bill, 2020 allows farmers to sell their produce outside the Agricultural Produce Market Committee (APMC) mandis without paying any taxes. Farmers (Empowerment and Protection) Agreement on Price Assurance & Farm Services Bill, 2020 allows farmers to sell their future produce to agribusiness companies at a predetermined price, and the Essential Commodities (Amendment) Bill, 2020 eases the control of the centre over the production & sale of agricultural produce.
PM believes that bills are a watershed moment for Indian agriculture as they free farmers from the influence of intermediaries. But farmers’ organisations see this as a move that increases the degree of participation of private companies.
Concerns over the bills are twofold. First, the content of the bills are seen as a threat to small & marginal farmers. Second, Haste with which the bills were passed in Parliament is seen as a threat by states & regional parties.
This reading list looks at why the passage of the bills has been met with stiff opposition from farmers’ associations, regional political parties, & Regional governments.
First point of contention regarding the farm bills is about the minimum support price (MSP)—the agricultural product price set by the govt to protect farmers with minimum profit for their harvests., farmers are often not aware when the govt procurement takes place, if it takes place at all.
With the bills providing for the setting up of alternative (private) markets outside the conventional Agricultural Produce Market Committee (APMC)-governed mandis, & making no mention of the (legalisation of) minimum support price (MSP), the concern, prima facie, is that the govt is now replicating its proverbial approach of dodging accountability for the distress-ridden farm sector under the guise of “barrier-free trade for farmers’ produce.”
Bill was passed without any discussion on important issues. The controversy around the bill, therefore, is not only in its contents but also in the way it was passed.
More than the content of the bills, it is, perhaps, the brazen infringement of parliamentary procedures in getting the bills passed—be it either the refusal of a division of votes following the debates on the farm bills or no informal headcount votes instead—that has driven the opposition’s resistance. Coercing the bills through by the sheer dint of power instead of their deliberated merits is a to ride roughshod over both federalism and democracy.
The more obvious issues with the farm bills—the exclusion of intermediaries & the mentioning of the MSP & the subversion of democratic procedures—Nayakara Veeresha argues, are just a part of the problem. One crucial point that is often overlooked is the implementation of the bill. Small & marginal farmers, who constitute 85% of the country’s agricultural landholdings, are indeed promised the freedom of expanding their market choices, but this is just part of the story.
High rate of indebtedness among the Marginal & Small farmers decreases the bargaining power to negotiate the Rate of the farm produce with the sponsors. Another factor is transportation & transaction cost involved in selling the produce from APMCs to the chosen buyer. Given the low average agricultural income, that is, 6,426/- Rs per household as estimated by the National Sample Survey Office (NSSO) during 2012–13, it is highly impractical to burden Marginal & Small farmers with these costs on the pretext of providing an alternative market system. FPAFSA fails to take account of these considerations, which are critical in what the bill claims, that is, price assurance and empowerment.
Powers, Policies, & Penalties
There is no food emergency in the country that could have required the government to act with such haste as it has, writes Pritam Singh, suggesting that the opportunity created by the pandemic was used by the govt to swiftly pass the bills without critical assessment. Singh lists several reasons why the bill poses a threat, not only to farmers but to states and regional parties.
A dissatisfied farmer with limited resources, knowledge, and time, however, would not dare to challenge the legal prowess of powerful corporate entities who can hire expensive lawyers.
The govt is also increasing its control over states & undermining their autonomy by making them more reliant on the centre for funds while leaving no scope for states to ignore the centre’s directives.
The attack by the Farmers’ Produce Trade & Commerce (Promotion & Facilitation) Act, 2020 on the limited revenue resources of the states is also clear in the provision that “no market fee, cess or levy” can be levied by a state APMC act or any other state law. After depriving the states of the revenue they earlier earned through sales tax by replacing it with the centrally controlled goods and services tax, and now resisting compensation to the states due to this revenue loss, this is another attack on financially weakening the states & making them more dependent on the centre.
Then comes the question of divisions & tensions along regional & federal lines. States & communities that depend more on agriculture would be worse off than those states & communities that depend more on industries.
Agriculturally dependent states, such as Haryana and Punjab, & the farmers of these states would be the most adversely affected due to the weakening of the MSP structures. In contrast to that, industrially advanced states, such as Maharashtra and Gujarat, & the big business interests (especially agrobusiness ones) based in these states would be the beneficiaries due to increased & easier access to food & agricultural raw materials from other states. This will increase regional & class tensions.
Singh sees this as part of a larger scheme by the BJP govt of centralising the country.
Its propagation of “One Country, One Agriculture Market” in defence of its farming policies articulated through the farm acts, the aggressive promotion of Hindi over regional languages (far more than the Congress ever did during its reign), its decision to scrap Jammu and Kashmir’s constitutional status and its statehood, and its New Education Policy are some of the key indicators of the BJP’s aggressive centralisation agenda