Our guest writer, Manu Moudgil makes an attempt to decode the recent farm reforms and explains why it is a matter of concern for the farmers!
A large number of farmers have been protesting at the Delhi borders for the last 25 days, seeking revocation of the three farm laws enacted by the Union government recently. They feel that these laws allow corporates to take over crop production and trading, which will impact their earnings and land ownerships. The three laws, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, and the Essential Commodities (Amendment) Act, deal with allowing the sale of produce outside the government mandis, giving a free hand to contract farming and removing the cap on storage of food items respectively.
The government claims these steps will open up the agriculture market and help farmers get better remunerations for their produce. The protesting farmers, on the other hand, point out that they won’t be in a position to negotiate with private companies in absence of a regulatory mechanism and oversight of Agriculture Produce Marketing Committee (APMC).
Currently, APMC is authorised to oversee trade and contract farming agreements between private players and farmers. The new laws don’t mention any regulatory mechanism or authority to monitor such transactions or agreements and restricts the jurisdiction of APMCs within their market yards while trade can happen anywhere.
Farmers also feel APMC mandis will close down eventually due to competition from private mandis, leaving them at mercy of companies.
In Bihar, APMC mandis were abolished in 2006, and now farmers are forced to sell crops at rates much below the Minimum Support Price (MSP).
MSP is the rate at which govt intends to buy from farmers. It is announced taking into account input cost for growing a particular crop. Government is assuring that MSP will stay but is not willing to make it into a law.
Government also claims that moving the trade beyond APMC will remove middle men like commission agents thus benefiting farmers but critics say more powerful middle men in form of big companies will replace the current agents.
The cap on essential commodities was placed to prevent black marketing of produce. The new law does away with the stock limits. Protesters feel that this will allow corporates will now be able to buy from them at lower rates, and store and sell at higher rates to consumers in the lean season; thus benefiting heavily from both sides.