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Farm Bill 2020 – ‘Free Markets Vs Regulated Markets’

Farm Bill, Farmers, Agriculture, Regulated Market, Modi, Rajya Sabha, Lok Sabha, Farmers Bill
Image Courtesy: Reuters

We all are familiar with the slogan ‘Jai Jawan, Jai Kisaan’ but let us analyze how much we care about our farmers or the so called ‘Kisaan’. A wide variety of taxes used to be imposed on farmers, if they sell their crops and vegetables in Mandis. The most common example is Arthiyas (middleman). They used to help farmers in loading, unloading, cleaning and setting up the Mandi, in return they used to take 2.5% commission. An estimate says more than 2,000 crore rupees were given to such middlemen out of farmers’ pockets. The State Government also imposes tax on such farmers. Punjab government earns more than 3,500 crore rupees from such taxes. Unions also have a stronghold on such a Mandi system and earn a good amount of money from the farmers’ pocket. The Government is giving farmers a chance to sell their crops outside APMCs as well. Those who wish to sell in APMC can continue to do so, while those who wish to sell in other states or other traders can do so. If the farmers chose the parallel system, extra costs that incur to them, like taxes, won’t be no longer bothering them. Obviously if the farmers chose the parallel system, it will be a blow to the earnings of middlemen and unions.

Two of the government’s three farm bills, which have led to massive protests by opposition parties and farmers, were passed amid an uproar in the Rajya Sabha. During the discussion on the bills, the government said the Farmers’ Produce Trade and Commerce Bill and the Price Assurance and Farm Services Bill will bring major reforms in the lives of the farmers. After the bills were passed, Prime Minister Narendra Modi tweeted: “For decades, the Indian farmer was bound by various constraints and bullied by middlemen. The bills passed by Parliament liberate the farmers from such adversities. These bills will add impetus to the efforts to double income of farmers and ensure greater prosperity for them. The opposition alleges that the proposed laws will give power in the hands of corporates and farmers will be deprived of a fair price for their produce.

The Modi government has come up with three ordinances related to agriculture. But these ordinances have turned the farmers of the nation against the government. Especially that of Punjab and Haryana. They have started to protest by blocking the roads and highways. As per the government, the three bills will help small and marginal farms by allowing them to sell produce outside mandis; allowing them to sign agreements with agri-business firms; and doing away with stock-holding limits on key commodities. According to the government these ordinances favour the ideology of ‘One Nation One Market’. It will give freedom of choice to the farmers. They can sell it freely across the nation and no need to bring them into APMCS. But if we see overall there are only 6% of farmers who receive MSP’s in our nation. Because MSP’s are only granted when a farmer comes and sells his goods in APMC. In a report of 2012-13 conducted by the government they found that the majority of the trade was being sold by the farmers to the traders outside the APMCS and not in the APMC. So, MSP was inoperable here. On this decision the farmers feel that if the government will make the nearby area tax free then it will be a heavy loss for them. Because in APMCS everything is regulated, transactions are transparent and are kept in account. On the other hand, places outside these mandis are not registered. Nor is there any MSP outside the mandi or APMC. The farmers who are protesting are saying that these ordinances will ‘Corporatize’ the agriculture. This will lead to the monopoly of big companies and MNC and will exploit the farmers even more. A recent example of this is, a few days back Pepsi Corporation sued the farmers in Gujarat. The farmers of our country are not that much literate who can read and understand these fluffy contracts made by these big MNCS. Many experts have also raised the concern that the government is just making fools of the people by saying that these ordinances will give freedom of choice to the farmers because freedom of choice already exists to them. They can sell freely wherever they want. Because freedom of choice hardly matters for the farmers. In a country like India farmers usually don’t travel miles to sell their goods. At the most what they do is sell in their own state or the nearby states. To sum up this whole issue is of ‘Free Markets Vs Regulated Markets’. Free Market basically means that there should be zero interference of the government in the business sector.

Before going to question the merits of the government’s claims, let us see what the farmer wants. He only wants a fair price for his produce, without affecting the interests of the consumer because he is also a consumer, consumer of his own produce. He believes a portion of what a consumer pays legally belongs to him. This portion actually goes to the middlemen. So, if middlemen are kept away at some level, the farmer will get his share without affecting the interest of other consumers. Therefore, what is needed is to reduce the number of middlemen, if not eliminate them. What one of the Bills has done is to introduce another middleman in the form of trade, in addition to the mandis. Can the government give an assurance that the farmer will get a higher price for his produce, henceforth? Would the purchaser sell the produce at the existing price, without affecting the customer? My answer is ‘No’, for the simple reason that the traders are not philanthropists. The farmer wants money immediately for the next crop and to repay the existing loans. The government says the farmer can sell his produce anywhere, outside mandis. Well, does he have the transport, time and patience for this? Does he have adequate storage for the produce? Is he in a position to bargain? No, and the government knows this.Now, the contract farming. What is the guarantee that the farmer will get a higher price for his produce, without affecting the consumer? The contract farming will go mechanized, causing more unemployment. What is the guarantee the farmer gets to work on the farm, his own land? The contractor will bring more migrant workers to save money at the cost of local workers. What is the guarantee, a farmer would get back his land if he wanted to come out of the contract? In case of any dispute he has to approach a magistrate. Does the government want a farmer to become a litigant or what? A farmer could become landless after giving his land for contract farming.

Dr Vaidehi Taman
Dr Vaidehi an Accredited Journalist from Maharashtra is bestowed with Honourary Doctorate in Journalism, Investigative Journalist, Editor, Ethical Hacker, Philanthropist, and Author. She is Editor-in-Chief of Newsmakers Broadcasting and Communications Pvt. Ltd. for 14 years, which features an English daily tabloid – Afternoon Voice, a Marathi web portal – Mumbai Manoos, monthly magazine Beyond The News (international). She is also an EC Council Certified Ethical Hacker, Certified Security Analyst and is also a Licensed Penetration Tester which caters to her freelance jobs.

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