OPINION: Are the new Farm Laws solely Punjab’s Problem?

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New farm laws are not solely Punjab’s problem,
only the wind began from Punjab.

The new farm laws have created a major stir and have escalated the farmer protest to a historic pan India People’s Movement. The government claims that the three farm laws are an attempt to invite private players to generate healthy competition along with the mandi system (APMC), and is not a takeover by any corporate house. The centre government’s think tank has been opining vociferously in media that the socio-economic backdrop for MSP has changed with better times in the country and so the policies need a change. Punjab and Haryana has been pin pointed for being complacent to the comfort of MSP and for not reinventing its agriculture in spite of its depleting water table. A new narrative is being fabricated that it is solely Punjab’s problem.

What is Punjab’s problem?

Punjab is certainly aware of water table depletion for a long time now. When India was deficit in grain and foreign exchange to buy from foreign markets Punjab and Haryana were used for the Green Revolution and guaranteed a minimum support price for staples like wheat and rice to usher the country into an era of food abundance. It is because of this that higher fertilizers and pesticides manufactured by private companies made inroads. No alternative agrarian model was provided. The constant rise in input costs have now led Punjab into an economic cul de sac. For a long time the farming community was looking for a bail out of this predicament with the help of centre, by way of MSP on other high value crops ‘in a meaningful manner’ or by subsidies that could help them diversify to food processing. But that never happened. Punjab was already trying to sustain itself and deal with the repercussions of the economic policies of Green Revolution when Modi government chose to bring in these Farm laws. Reinventing agriculture at this point in time is out of question. This raises yet another crucial question: Why did Modi government choose to bring about such drastic changes exactly now? With no new solid alternative model and no transitional phase, the Farm Laws have been bulldozed on the states and certainly Punjab is worst affected since it is a state that primarily depends on agriculture for its revenue.

But then how did one state’s agricultural issue gain pan India momentum? Clearly because the new laws are not solely Punjab’s problem. Here is a deeper analysis:

Liberty vs. Security

Indian farmers clearly understand that individual liberty that the centre government is promising them with the enforcement of farm laws comes by jeopardizing security of farming community. In fact, do the farmers really have the liberty of choosing which private company they want to sell their crop to? Or will the private player choose which farmers crop it wants? The fact is there is no choice but only a façade of choice. It is for this reason the farmers have been asking for the safety net of MSP as a legal provision and not because they are addicted to the ‘allure of MSP’. According to an analysis by ‘The Wire’, farmers across 11 major agricultural states have been denied Rs. 1,900 Crore due to sales below MSP in last two months alone. Moreover, if Indian agriculture is not subsidized it will never be able to compete in the international market.

Powerful tool of Crony Capitalism

The three laws serve as a dangerous tool of crony capitalism which can give rise to heavy hand and monopolistic behavior. Section 13 of The Farmers’ Produce Trade and Commerce Act (2020) clearly states: “No suit, prosecution or other legal proceeding shall lie against the Central Government, or any officer of the Central Government or the State Government or any other person in respect of anything which is in good faith done or intended to be done under this Act or of any rules or orders made thereunder.” This is simply outrageous. There is no legal recourse for Indian farmers. In fact, these farm laws together snatch away the basic constitutional rights of Indian citizens empowering the clout of government and big business houses to flourish. Certainly, the Indian farmers have understood the intentions of the current regime. Therefore, these new laws are not solely Punjab’s problem.

Crisis of Confidence

There has been a crisis of confidence in the government and its intentions. Never before did India view autonomous and independent agencies like CBI with skepticism. There was already a simmering distrust in all segments of society because of Modi government’s disastrous decision of demonetization, past rhetoric in Kashmir, CAA protests, frenzy of changing city and institution names, love jihad laws, mob lynching, extreme dip in economy – all of which has now been brought to a boil with these three Farm Laws being framed in a rush, behind the façade of a pandemic. Hence, a pan India movement where the farmers have been joined by various labour, trade and transport unions as well because the sense of fairness has been lost.

To encapsulate, these farm laws are not solely Punjab’s problem. Only the wind began from Punjab.

OPINION: Why Farmers Opposition To The New Agricultural Reforms Is Justified

Punjab farmer unions to corner Cong govt
Farmers are unhappy with the new agriculture bills

After the CAA protests, now the centre government is facing yet another major backlash. The new farm ordinances promulgated in June this year, have not gone well with the farming community, especially of Punjab and Haryana. The reforms in the agricultural markets include deregulation of farm foods from the Essential Commodities Act (ECA). Farmers are also allowed to sell their produce to the government regulated market yards (mandis) or Agricultural Produce Market Committees (APMCs), as well as to private firms outside this set up. They have also been allowed to enter into farming contracts. The government says that these bills have rid the farmers from the shackles of middleman, increased the profit margins for them, increased their bargaining power and hence a freer trade. However, the farming community refuses to accept these as pro farmer legislations and they have strong arguments to make which should not be overlooked.

The farming community believes that with the coming of private players it will be difficult to hold them accountable for any malpractice or harassment. The eventual phasing out of the Minimum Support Price (MSP) will take away the farmers safety net and the farmers already have many issues to tackle with from depleting water levels, rising input costs for farming and debts. Least government involvement in the entire process of crop procurement will snub the small and marginal farmer decreasing their bargaining power instead of increasing it. The parallel mandi system that has been allowed to be carried out along with the entry of agribusiness firms will become redundant over a period of time – handing the baton finally to the big corporations. It is to be pointed out here that although the government claims that it is trying to help the farmers by ridding them of the monopoly of APMCs, the farming community has never been entirely against the APMCs work ecosystem in the first place. Many farmers are hugely dependent on artiya system (government licensed commission agents which gives them credibility with the farmers) for loans and smooth functioning of their daily lives. Even the banks could not provide as healthy an alternative to the farmers. Secondly and more importantly if the government could assure the provision of MSP in the legislation itself, they would not have faced such protests. The problem is not the private player but the lack of legal binding of MSP in the new bill.                                 

Here is a deeper analysis.

Small Threat v/s Big Threat

It cannot be denied that traditionally farmers have faced some problems at the hands of APMCs. However, the farmers have a collective strength as the government is answerable to them locally and nationally, which makes sure that APMCs never overreach themselves. Hence, it is a smaller threat to their progress. On the other hand, with big corporations coming in and no government involvement, the farmers will have no backup. A mutual agreement can only take place or rather hold its place if all the parties involved can exercise their strengths equally. With no strong protective measures from their democratically elected government, the farmers will definitely have a bigger threat from these corporations who have the financial power and the digital behavioral data of millions of people. Till date the American government could not completely round off Facebook founder Mark Zuckerberg for his mega company’s data malpractices that have impacted daily life and electoral decisions of people around the globe. How will the simple farmers ever round up private players and big corporations in case of any injustice?

One size does not fit all

Punjab and Haryana are states where the agitation against the new reforms is the most severe since they have higher contribution in filling the food security pool of India. Therefore the legislation needs to be flexible in its application. 34 % of wheat and 22% of rice is contributed to the nation by Punjab alone. The Punjab government too collects handsome mandi tax which is also outside the GST. This tax helps create and maintain robust infrastructure like roads connecting rural areas, mandi infrastructures, etc. It is used for the welfare of people and hence should not be done away with. By removing the fee on trade and excluding the mandis from the definition of trade areas the government is clearly incentivizing the traders. Earlier the traders came to a defined and well allocated area for trade with the farmers. Now a marginal farmer is expected to carry around huge quantities of produce directly to various bases of traders. This new provision is unviable for the farmers of Punjab and Haryana. This predicament is not as strongly applicable to other states as they have a weak APMC structure. In Bihar not even 1% of targeted wheat procurement happened at MSP in this past rabi season which ended in April this year. The overall contribution of the state in terms of produce is also lesser than Punjab and Haryana. Therefore, entry of a private player might be a good alternative in this state. Yet, without government back up or intervention no trader or private company will give a decent price for the hard labour of a farmer even in these states. The main point to be taken here is that one size or one approach does not fit all.

Why rush it through?

The APMC structure came to fore legally in 1956 in the face of famine in order to check unlawful trading. The system evolved to accommodate the changed circumstances of farmers over the years. Now when it has become an integral part of many state economies, where is the need to suddenly overturn it without a proper dialogue with the stakeholders? Why ram it through with these bills in the already troubling time of coronavirus pandemic? There was no need to issue an ordinance. Normally these ordinances are issued only as an emergency law. These have to be converted into legislation as soon as the parliament reconvenes. More importantly it needs to be highlighted that any law related to agriculture, agriculture processing and marketing is not even a subject of Union list. It is constitutionally a State subject.

The government is free to introduce reforms for the betterment of its people. Precisely, it is for this very reason the elected representatives have been sent to parliament by the people. But firstly, where is the emergency? To do it behind the façade of a pandemic is not the right way ethically and morally. Secondly, does it hint at something else too? Internationally, a new business climate is trying to emerge from the moribund economy due to the ongoing pandemic. There is a visible monopolistic behavior on the rise, with supersized deals taking place between various corporate giants who have strong access to capital market. The recent deals to boost Jio ecosystem is one such case in point. The accelerated digital transformation for these bigger corporations in turn primarily means enhanced “surveillance capitalism” making the governments across the globe more in sync with such deals since they can become the biggest buyers of this surveillance data, giving a more potential rise to ‘Cambridge Analytica’ like case. In times like this, when a new dangerous world wave is emerging do we really want private players to come in.

Even if it is just hysteria, why risk crushing the Anndatta by passing such ordinances in such a hush which might weaken the economy of states, and who knows…might also become entry point for a new East India company!