Dear Farmers, its time to be enterprising New Farm Law-Opportunity and Challenges- Vishnu Langawat
Though agriculture’s share in India’s economy
has declined to less than 15% due to rise in industrial and services sectors, still
it is an important sector as majority of the population of the country reside
in a rural area and agriculture is the backbone of the rural economy. India
despite being a global agricultural powerhouse and largest producers of various
agro-commodities, growers of these agricultural commodities face significant
challenges as in every 42 minutes one farmer commits suicide and farm business is
considered as risky and inefficient.
From where we started:
India, which was once a number one economy of
the world from 1AD to 1500 AD contributing 24.4% in the world GDP declined to
4.2% in 1950 {Economist Angus Maddison} and was engulfed in starvation, therefore,
immediately upon attaining freedom from the colonial power, the primary focus
was raising agricultural output and improving food security and during the green
revolution, India’s food production multiplied 3.7 times making India not only food
self-sufficient but also a net food exporting country. In this, the focus was
always on attaining food security and raising the income of farmers was not at
all in the agenda of any government which resulted into agrarian crisis, so to
address the agrarian crisis, the government aggressively following an agenda to
double the income of farmers by 2022-23 which is still less compared to growth
in other sectors.
It is relevant to mention here that policymakers
of the country were so much apathetic concerning the income of growers that it took
them more than 90 years to declare the bamboo as “a grass” in the year 2017[1]
otherwise it was being considered as “tree” under the Indian Forest Act, 1927 due
to this cutting and transporting of the same was unlawful resulting into a lot
of harassment of farmers in North-East State and because of which despite India
being second largest grower of Bamboo, it used to import bamboo from Taiwan
even for sundry purposes such as making agarbattis.
Reform?
Legislation, of course, has to keep pace with
the expansion, advance, and complication of society, of trade and commerce,
public life and public relations[2],
in initial days, when the country was emerging from the aftermath of partition
and shortage of food, thus, to make essential commodities available to the consumer,
the Essential Commodities Act was enacted. The Act empowers the Government to
control production, supply and distribution of essential commodities by making
order(s) under Section 3 of the Act, however, after opening up of the economy,
the Act discouraged entrepreneur in investing in agri-businesses due to
uncertainty and unfettered power of Government to control essential commodities.
The “foodstuffs” which is an essential commodity under the Act, can be controlled
by the Government at any time and entrepreneur did not come forward to build
storage space knowing that storage of certain commodities above a certain limit
is illegal like onion.
The Essential Commodities (Amendment) Act seeks
to limit the power of Government in controlling the foodstuff. The Government shall
be allowed to regulate the supply of such foodstuffs as notified only in
extraordinary circumstances (include war, famine, price rice and natural
calamity of grave nature) and extraordinary price rise. Therefore, frequent policy
changes, the promulgation of control or movement orders will be thing of past concerning
agricultural foodstuffs which will boost the confidence of entrepreneurs in investing
in agro-businesses.
Once the agricultural foodstuffs will be decontrolled,
a need arose for providing competitive markets to farmers. As of date,
Agricultural markets in most parts of the country are established and regulated
by State APMC Acts and Once a particular area is declared a market area and
falls under the jurisdiction of a market committee, no person or agency was allowed
to carry on wholesale marketing activities without license or permission of
concerned APMCs which had not provided any help to the farmers in direct marketing,
retailing, smooth supply of raw material to agro-processing industries. The Farmers’
Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 create an alternate
ecosystem between farmers and traders apart from APMCs and allows farmers or traders
to sell or procure the farmers produce outside APMCs which otherwise was
illegal. The Act allows farmers and trader to carry on the inter-state and
intra-state trade and commerce in farmers produce in a trade area (i.e. outside
APMCs). It also allows traders to engage in interstate and intra-state trade of
scheduled farmers produce with a farmer or another trader in a trade area freely
without any restriction and levy of market fees by APMCs and creating a competitive
environment among traders, APMCs and Trade Area which will benefit farmers. The
Act also seeks to develop Price information and Market Intelligence Systems for
farmers produce and dispensation framework enabling farmers and traders to make
informed decisions about what to grow, when to harvest, where to market and to store
or not.
Further, in continuation of reforms where agri-product
is decontrolled and marketing layout is prepared, the Third Act (The Farmers (Empowerment
and Protection) Agreement on Price Assurance and Farm Services Act, 2020) seeks
to connect farmers with the market. At present the Indian agriculture is fragmented
due to smallholdings and largely dependent on weather, uncertainties in production
which make it risky and inefficient business. The Act seeks to govern the
relation of farmers and agribusiness entrepreneur by a written instrument containing
detailed terms of price, quality, grade and standards of farming produce. The parties
can agree for guaranteed price including additional amount over and above guaranteed
price liked to prevailing prices in APMCs or electronic trading platform etc., the
parties can agree for quality, grade and standards as mutually agreed or formulated
by any agency of State or Central. The agreement may be liked with insurance or
credit instrument under any scheme of the government to mitigate the risk of
farmer or sponsor or both.
The biggest challenge of these reforms is their
implementation by state governments and intent of corporates who are profit-driven.
if State Government reduces rumble blocks and improves APMC Network, as per my
understanding it will increase competition among corporate house which will directly
benefit the farmers. Central Government, since 2007, asking State Governments
to allow free competition, promote transparency, unify fragmented markets and
facilitate the flow of commodities and asked to implement Model Agricultural
Produce and Livestock Marketing (Promotion and Facilitation) Act, however, States
Government adopted the lackadaisical approach and didn’t amend their respective
state APMCs and during Covid-19 only a few state like Gujarat, Madhya Pradesh,
Uttar Pradesh, Karnataka relaxed regulatory aspects in their APMCs and Goa
promulgated ordinance exempting farmers from paying the market fee and allowed the
farmers to sell their produce to private players, however, rest of the States
rendered lip service or ignored it. As the experience shows State Governments have
adopted a lackadaisical approach on amending APMCs, it is a matter of great concern,
how, the State Governments are going to implement these Acts when various State
because of their political thinking is contending that these Acts are an intrusion
in their legislative sphere under the Constitution of India. Further, marginal farmers
are also required to form a large co-operative association to deal with corporate
muscle power and Amul is the example of consolidation and collective decision
of co-operation. Though Central Government has promised that it will propose a
Model Agreement among farmer and Corporates, however, time will tell how these
practices are going to be implemented at the grassroots level.
Wayforward for Farmers
·
Marginal
farmers are required to form a co-operative organization or self-help group
·
Invest
in agriculture technology which can be part of the farming agreement
·
Ask
Panchayat to perform an active role in agribusiness
·
Be
aware of the various policies and rights
·
Adopt
multi farming techniques
·
Adopt
hydroponic farming
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