New Delhi: As the Narendra Modi government enters the second round of discussions with select leaders of agitating farmers, it does not give the impression that it is in any hurry to back off from the three contentious Farm Laws, nor do farmers look in a mood to relent.
Three union ministers participated in the meeting along with senior officials, more to gauge the mood of the farm leaders than to offer any alternative, as decision-making lies elsewhere.
However, the fact that the government is making an effort to take a feedback on farmers’ point of view should be read as a positive signal. This-- and extensive, transparent dialogue with political parties and state governments--should have been done before the reforms-oriented bills were introduced in Parliament through the Ordinance route.
The 32 farmer leaders from Punjab and a five-member team representing the Samyukt Kisan Morcha put forth their reservations to the three Farm Acts, namely, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 on contract farming; The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 for private markets; and The Essential Commodities (Amendment) Act, 2020, removing stock holding limits.
A majority of farmers wants the three Acts that together provide for privatisation and commercialisation of agriculture with long-term impact on India’s rich bio-diversity, to be scrapped.
Speaking for the Samyukt Kisan Morcha, Shivkumar Sharma Kakkaji pointed out to government representatives that they were opposed to the setting up of private markets which will serve private interests more than farmers’ and wanted a law for mandatory payment of the Minimum Support Price (MSP) to farmers for purchase of their notified produce.
The Morcha wanted all farm commodities to be covered under the Essential Commodities Act for stock-holding limits. They said contract farming agreement must drawn up by farmers and the company/lessee should not be allowed to raise loan against a farmer’s leased land. All trade, within or without mandis, should be under license, they said.
The team of union ministers, comprising Agriculture and Farmers’ Welfare Minister Narendra Singh Tomar, Commerce, Industries and Railways Minister Piyush Goyal and Minister of State for Commerce and Industries Som Prakash, held consultations also with Rakesh Tikait-led Bhartiya Kisan Union (BKU) and its state representatives. The BKU backed the Morcha demands but insisted that a profit margin limit be fixed for agents/artiyas, to keep under check middle-level profiteering.
Till Wednesday, the government had not relented on imposing mandatory MSP on trade in private markets, which is the starting point of differences with farmers. Indeed it is questionable as to why the government is reluctant to making payment of MSP mandatory and is protective of private trade and big agri-businesses, against farmers over 80 per cent of who are small and marginal, not to forget the lakhs of farm labour that is employed in the sector.
As it is, the MSP set by government does not cover the input costs incurred by farmers making agriculture non-remunerative. Almost eight years ago a government survey showed that 40 per cent of farmers would prefer to leave agriculture if they had other avenues to make a livelihood, which can be a challenge for the country’s food security.
Coming to the crisis at hand, the government position is reflected in public statements of Prime Minister Narendra Modi, who maintains that the farmers need to be made to understand the new laws, prompting one of the farm leaders to remark that “unless the Prime Minister makes his stand clear, talks with farmers have no meaning”.
The Farmers (Empowerment and Protection) Agreement on Price Assurance Act allows private companies and agri businesses to buy farmers’ produce from outside designated mandis which are dominated by commission agents and bound by various taxes and levis imposed by state governments. Mandi charges vary between 5 to 8.5 per cent in Punjab, Haryana, Rajasthan, Gujarat, Arunachal Pradesh, West Bengal and Uttar Pradesh. The charges are highest in Punjab, which has thrown itself full-fledged in the current agitation.
On its part it appears that the central government wants to take on the commission agents or artiyas on one hand, and state governments earning huge revenues from mandis, on the other. Reports say that the annual turnover in Punjab mandis runs into thousands of crores of rupees which is why the Congress-ruled state government, as well as opposition Akali Dal, are as entrenched in the imbroglio as farmers and commission agents. The Centre believes that charges of less than 2 per cent would be reasonable for commission fee and maintenance of the mandi yard and favours a cap on commission charges which will be to the benefit of farmers. But agriculture being a state subject, it cannot impose its writ on this.
The issue, it must be underscored, is that the Acts not only protect the private players from paying government-set MSP to farmers, but also shield them from the levies as there are no charges for private players in alternate/private mandis. Clearly, the Acts are designed not only to promote private companies, supermarket chains, big processors and agri-businesses, but also to protect them commercially to make their business viable.
Commission agents or artiyas or middle-men, who are an intrinsic part of the mandi system and double up as money lenders, are a reality. They have a symbiotic relationship with farmers running through generations. A huge section of the middle-men are exploitative and there is no doubt about it, but farmers are dependent on them for loans, seeds, fertilisers, pesticides and other inputs that they supply. They cannot be wished away and need to be taken on board for talks.
“We told the government that no business can be run without a distributor. Consumers are in cities and urban areas and the producers (farmers) are in rural areas and both are being exploited. So why not set a limit on profiteering (Maximum Price) by commission agents/middle-men? After all, even the companies that will come into play, will function through agents and agencies,’’ said a farm leader.
There are many issues that have been left unattended in the Contract Farming Act as well, such as compensation for crop damage, disputes over quality and grading and conflict resolution. Such loopholes and the government’s unwillingness to regulate contract farming, makes farmers wary.
Apart from all of above, the government needs to address serious concerns about India’s bio-diversity being grossly affected by agri-businesses, processors, multi-national and private players who are known to be in the business for serving export markets and have profiteering as a motive.
Monopolistic farming yields mono-cultures and eventually loss of soil fertility. Whenever a company goes for contract farming their preference is for diversification to commercial agriculture, high value and export oriented cultivation which is not conducive for India’s centuries-old rich bio-diversity. Loss of desi variety of cotton seeds after transgenic cotton entered farmers’ fields, is one such example.
Not just this, leased chemical-based farming tends to exploit the soil and leave it infertile. There are numerous examples in several countries where companies, mega processors and agri businesses have exploited farmers and their fields through contract farming and left them devastated.
To persuade agitating farmers to lift their siege of Delhi, the government suggested setting up of a joint committee to look into various demands, which was rejected outright by farmers’ leaders who said numerous panels in the past yielded no results.
Now the tug-of-war is about how much pressure farmers’ organisations can bring and how well the government can resist.