Farm Bills 2020: Death warrant to mandis, end of small farms

Indian farmer on bullock cart
The hurried manner in which the bills have been passed shows how a pandemic could be turned into an opportunity for deregulation and disintermediation.

By Mini K

What should a doctor do if she does not know how to cure her patient? Kill the subject? Why not? That is a solution to free the patient from all her present pains along with the pains that would probably bother her in future. Worries about how that decision would affect those dependent on her economically and/or emotionally should not be the headache of the doctor, right?

Does this sound insane to you? Then you should join the side demanding a thorough revision of the three contentious farm bills that await presidential assent. The bills propose exactly the same thing —killing the subject. To borrow the idiom, throwing the baby out with the bathwater.

The political parties of all hues, barring a few exceptions, have accorded a warm welcome to these bills. As farmers plead and protest, webinars are being organised, channel war rooms are getting heated up, and scholars are busy exchanging views. Social media is vertically split on the issue. Most of the discussions are centred on questions on minimum support price, elite capture and corporate loot. All those arguments hold water and should be discussed with more vigour. But for being a practitioner in rural development for a long period, I believe, we often forget that the bills might entail multiple social implications as much as the economic ones. My apprehensions are about the potential pitfalls in the promised path on the sociological front when the policy is put to practice.

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In pursuit of a historical journey — really?

Prime Minister Narendra Modi has described the passing of these bills as a watershed moment. Though we normally call a moment historic only in hindsight, I agree with him here. It is a turning point that would change the direction of the current beyond which the things will never be the same. But where that path would lead us is uncertain and the problems that might entail are indeterminate. That’s why choosing the right path, or at least not following a fatal one, is of paramount importance.

I must admit that, while going through the original bills, I got carried away with the neatly wrapped package of promises . The invisible hands and brains behind the bills deserve applause for crafting and decorating it in such a beautiful and alluring wording. Right from the preambles, they would give you goosebumps. Reading further, it would make perfect sense to any common man. While going through it, one might even feel like dancing in ecstasy thinking about an India at the horizon that these bills promise to build. It looks like a cakewalk that would lead Indians to a promised land of eternal happiness and justice.

Only once we start walking, we would probably feel the piercing pieces of blades and shredded glass pieces cleverly hidden inside that cake. We may not even realise how much toxins have been mixed in the attractively coloured decorations on the cake because we may not live to feel it, once we taste the piece of that cake as such.

Pay heed to the hidden dangers in the bills. Join the campaign that demands the removal of those blade pieces, glass shredding and the toxins from the cake.

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Playing with the buzzwords

In a webinar hosted by ASHA (Alliance for Sustainable and Holistic Agriculture) Kisaan Swaraj Network a couple of weeks ago, I heard Dr. Sudha Narayanan naming the three ordinances, promulgated in June 2020, in easier terms. That nomenclature perhaps sums up what is being served in our platter, exactly. To comprehend those ordinances easily, she named The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 as the APMC Bypass Ordinance, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 as the Contract Farming Ordinance, and The Essential Commodities (Amendment) Ordinance, 2020 as The Freedom of Food Stocking by Agribusinesses Ordinance.

Replacing the word ordinance with the bill would not change anything because all the three have been passed now at the sanctum of democracy in the most undemocratic way.

Under the attractive masks lazed with fascinating buzz words such as promotion, facilitation, empowerment, protection, price assurance, farm service, and amendment, that radiate high-intensity positive connotations, we fail to see the real intentions behind them. My plea to the readers is to look through the veils.

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Turning a pandemic into an opportunity for deregulation

The hurried manner in which the bills have been passed shows how a pandemic could be turned into an opportunity for deregulation and disintermediation, cleverly disguised as barrier-free trade.

When the entire world resorted to measures to support their citizens by ensuring food and lifesaving essential commodities free or at an affordable rate, India was busy amending the Essential Commodities Act, allowing free stocking of essential items. When the nations supported the less privileged to protect their livelihoods, we were busy locking them down and cutting down their livelihood options.

Throwing the baby out with the bathwater?

Agricultural Produce Market Committees (APMCs), beyond doubt, is a corrupt and flawed system in its current form. But instead of adopting corrective measures, the state resorted to scraping it. This act is a blatant denial of the existence of a more exploitative market before the APMCs came into being. It undermines the transforming potential of a state-regulated market and questions the fundamental principle of collective bargaining power of the otherwise unorganised group of producers.

When more and more private players enter the arena under a deregulated regime, the price discovery would become problematic and it does not need a Nobel in economics to explain who will benefit from the situation. The 3Cs — cartels, commission agents, and corporates — are here to stay, consolidating and colluding. They are going to direct the show, but out of state oversight.

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Discrediting the need for the regulated oversight by state machineries, citing the existing corrupt dealings by the state-market nexus, is like leaving a fort unattended fearing the guard could be bribed by the invaders. Arguing that a deregulated market would fetch higher prices for the commodities of less privileged farmers is a cruel joke. If that was true, none of those farmers selling outside the mandis would have ended their lives.

A large part of the transactions is already taking place outside the mandis. Designating any place beyond the boundaries of APMC Market yard as trade area will not benefit those farmers who are not part of the APMC system. But the price in mandis influences the price in the open market. By killing the APMCs, we are killing small farms too.

There is no other word in agricultural marketing that is more vilified than the word middleman. Middlemen indeed siphon out a major part of the producers’ share. But a supply chain functioning without an intermediary is a myth. The proposed law, though expresses the desire to do away with the middlemen, does not shine any light on how it will be done. For argument sake let us imagine that all intermediaries are removed from the supply chain. Where would they go? What would they do for a livelihood? I don’t need not remind the readers that the GDP growth is negative and the unemployment rate is at an all-time high.

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The bills portray rural marketing system taking the market to the farmers through creating more market yards within their vicinity. What it hides is the fact that it would divide the number of traders too, which might end up in monopsony. Electronic platforms might expand the number of buyers, theoretically. But agricultural goods are not emails or text messages. It needs logistics to take the producers to the consumers, storage and package, price discovery mechanisms and follow up in payment. The invisibilisation of the sellers and buyers would be the result and again the buyers are going to be in an advantageous position. A deregulated system, in such a context, is going to leave the producers in peril and the buyers safe in their cabins.

Doing away with data: Sign of a regressing nation

We talk about a data-driven and evidence-based policymaking. By deregulating the trade at the backstage, we are killing the opportunities to garner pieces of evidence. In an unregulated system, a private player is under no obligation to divulge information. The makers of the bill have not explained how market intelligence would work in the absence of data.

The mirage of empowerment and the dangers of homogenisation

The buzzword empowerment is the neoliberal articulation of self-governance — more precisely a euphemism for running away from the responsibility of an elected government or conveniently shifting its welfare functions to the citizens themselves. All you need is a nice benign-looking interpretation for an otherwise malicious act. That is the role of buzzwords like empowerment in the policy.

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For instance, in February 2019, just before the announcement of the Lok Sabha election, the Prime Minister announced PM Kisan scheme that promised to transfer Rs 6,000 each to the accounts of more than 14 crore small and marginal farmers. With this meagre sum, the farmer was expected to compensate her losses, look after her family, get inputs for the next crop and thereby get herself freed from the clutches of money lenders. In less than six months, the same farmer is expected to be transformed herself into a new avatar, empowered enough to be seen bargaining with the traders face-to-face, dictating her terms in the agreement with the corporate giants, negotiating with the organisers of contract farming, and arguing with the district collector for dispute resolution as envisioned in the bills. I am simply awestruck thinking about the imagination of the makers of the bill. Believe me, that’s the image I want to keep. But we know that, on the ground, the reality is far from it. (My advice to Google and other search engines is to take lessons from these bills and rewrite its algorithm for responding the searches for the images of a farmer, who still shows a farmer in dim light.)

Homogenisation of categories of farmers as empowered enough to dictate terms with traders is equally problematic as imagining the traders as a homogeneous benign lot of individuals or firms who are keen in transferring the benefits of deregulated trade to the producers and consumers. This portrayal is far-fetched and utopian. Anyone who has spent time studying the marketing of agricultural commodities on the ground could vouch that the market does not work like that. Historically, the benefits of the high price are not transferred to the farmers whereas the burden of low price is singularly borne by them.

Don’t we need a shift from this? If one asks so, I would say “yes, we do”. But if one asks whether the bill can assure that, the answer is a resounding “no” — not in the current form.

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Producer-consumer binary

Supply chains are consumer-driven, mostly. The fundamental issue here is with the producer-consumer binary. By consumers, the imagery sticks to the middle class. A small or marginal farmer cannot grow all that he needs in a small piece of land. In a country where farmer community represents one-third of its population, they represent one-third of the consumers too. The landless labourers, construction workers, street vendors, rickshaw pullers, and the likes do not find a place in our imagination when we hear the word consumer. Another category that goes invisible under the generic term is poor women.

The Essential Commodities (Amendment) Act would be a death warrant for all such communities during food scarcity, which could be artificially created by using the provisions of the Act. We have experienced it during the great Bengal famine of 1943. The famine did not kill the upper class, middle class or peasants. When Churchill diverted our food grains to feed the soldiers fighting the World War II, the price of grains hit the roof and became unaffordable for the labourers, barbers, rikshaw pullers, and cobblers who starved to death in large numbers.

Deregulation will affect controlling the price hike. The government has ensured that it will step in when the price goes high but as many pointed out, the ceiling fixed is too high to allow the state to intervene.

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Partners in crime

It is said that when a structure is shaken, the cracks will get more and more visible to the viewers. The state-sponsored farmer agitations in Punjab is one such thing. The state says that the revenue collected through the mandis are being utilised for providing free electricity to the farmers themselves and if the APMCs are closed, the government may no longer be in apposition to provide electricity. It The term free too needs a redefinition in this context. Historically it was part of vote bank politics and no political parties, including the Congress and the left, can run away from it.

Equally important is the cracks occurring in the federal structure of the nation. The constitution deems agriculture as a state subject, but was never treated as one. This new Act rips off the last right from the hands of a state in deciding its agricultural policies and revenue generation. Tax and levies being the primary source of income for an elected government in a democratic state, denying their share of income is the sure-shot way to destroy its economy.

Dispute resolution: The new age fairy tale

Much ink has been spent on how to resolve disputes and was awesomely imagined to picture it. An individual illiterate farmer is expected to challenge the traders legally by taking the matter to the district collector and by appointing parties to speak for him. The policymakers who dared to visualise a farmer, who has been longing for survival with the Rs 2,000 after every crop to survive under PM Kisan, spending his resources for dispute resolution deserves a shock treatment to bring him back to consciousness.

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When all other things were deemed voluntary, the bill dared to stipulate that the farmer cannot approach the civil court to resolve the disputes. For a large array of agricultural commodities, trading is a daily affair. So will be the disputes. The makers of the bill knew this very well and were aware that if the farmers approach civil courts for resolving disputes, the country might need more courts than the markets.

Contract farming

It is hard to believe that those who drafted the bills had no clue about how contract farming works in India. It is mostly informal without any agreement for multiple reasons. According to Dr. Sudha Narayanan, who has been studying contract farming for so long, it is nothing but a non-starter. Signing a written agreement is not made mandatory. Providing a framework without mandating would not change much on the ground.

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According to the bill, the responsibility of ensuring the quality of the produce is vested with the sponsors. The makers of the bill have imagined a system without manipulated quality checking devices. I do not deny the right of the industry in procuring quality inputs for the production of quality outputs. Past experiences make me cynical to believe the benignity of the sponsors.

Look back, act now and then move forward

I urge everyone to stand with the small and marginal farming community. The bills are promising, but that’s where it ends. So, act now. If in doubt, have a look at the note ban and GST experiences. In both cases, what has been delivered had nothing to do with what has been promised. Our economy has touched the rock bottom and the states are clueless about how to recover their rightful share of GST from the Union government. Most unfortunately, we are dealing with a system that does not find it accountable for what it does. In 2020 we are asked about creating innumerable trade areas, physical and virtual. Do not to get blinded by the promises in the bills and do not take your eyes off the intentions behind them. These bills need revision and the government should listen to the people who voted it to power.

(Dr Mini K is a rural development practitioner and researcher based in Kerala. Views are personal.)

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