Why Farmers Protesting in India against New Legislation?

Why Farmers Protesting in India against New Legislation?

Why farmers in India are protesting?

Farmers are not ready to accept the three new legislations passed by the Government —the Farmers (Empowerment and Protection) Agreement of Price Assurance, Farm Services and The Essential Commodities (Amendment) and The Farmers’ Produce Trade and Commerce (Promotion and Facilitation).

Farmers are asking the government to give guarantee MSP in writing; otherwise the freedom given to private corporate houses will result in the exploitation of the farmers. The arhtiyas (commission agents) and farmers have friendship and bonding that goes back decades.

The main role of Arhtiya is to handle the financial loans of the farmers and make sure timely procurement and adequate prices for their crop. Each Arhtiya is in touch with 50-100 farmers on an average. Farmers are under an apprehension that the new legislations will finish their relationship with these Arhtiyas (commissioning agents) and corporate will not be as supportive to the farmers when in need.

What are the pros and cons of the new Farm Acts?

PROS

• A more flexible and free system for the farmers has been brought by the three legislations.
• Farmers get an additional marketing channel for selling the crops outside the physical boundaries of the Mandis.
• The new acts have not changed the system drastically. They have introduced only a parallel system functioning with the existing system. Earlier, farmers used to sell their produce through the e-NAM system.
• The acts ensures same attention for the producer i.e. farmer as well as the production. This helps in giving the farmer stipulated price for crops and this makes farming easier.

CONS

• The Farm Acts hampers with the monopoly of APMC (agricultural produce market committee) mandis, thereby allowing sale and purchase of crops outside these state government-regulated market yards or mandis.
• The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act does not give any statutory backing to MSP. The farmers have nothing to do with the legal system but everything to do with the MSP, a price at which they sell their produce, there is not even a mention of either “MSP” or “Procurement” in the said bill.
• The only crop where MSP payment has some statutory implementation is sugarcane for which FRP is determined. This is due to its pricing being governed by the Sugarcane (Control) Order, 1966 issued under the Essential Commodities Act. 
• The new acts are placing farmers and traders at the mercy of civil servants, rather than of the courts.

What was the arrangement that existed before this new law?

MSP is the minimum price decided by the Government at which farmers can sell their produce for the season. When market prices fall below the decided MSPs, procurement agencies step in to procure the crop and ‘support’ the prices.

The Cabinet Committee of Economic Affairs announces MSP for various crops at the beginning of each sowing season on the basis of the recommendations made by the Commission for Agricultural Costs and Prices (CACP). The CACP considers demand and supply, the cost of production and price trends in the market among other things when deciding MSPs.

What is APMC?

Agricultural Produce Market Committees (APMC) are the marketing boards set up by the state governments for eliminating the exploitation incidences of the farmers by the intermediaries, when they farmers are bound to sell their produce at extremely low prices.

• In most APMCs, buyers shall route all purchases through licensed arhtiyas (middlemen).
• These middlemen charge a commission for their “services” — many times, both from the buyer and seller.
• The arhtiyas are often a moneylender who supplies fertilisers, pesticides and seeds to farmers on credit. Then, farmers are forced to sell through Arhtiyas and settle their dues in perpetuity.
• Also, Mandi fees range from 0.5% to 5% on the value of the sale, varying across states and commodities.
• Further Mandi fees on inter-state trade amounts to double taxation and violates the single national market approach.
• At Mandis the lowest prices are during the 3-4 post-harvest months and highest in the immediate pre-harvest period.
• Farmers undertake maximum sales just after harvest, as they need to purchase inputs for the next sowing season.

Why farmers, in general, are protesting. What fear they have?

The farmers of India have been protesting for various issues for the past two years. The recent protest in Delhi by farmers from the State of Punjab, Haryana, Western UP, Assam, Karnataka, Kerala, and Tamil Nadu was against the farm Acts passed by the Indian parliament on Sept 27th, 2020.  Besides the disagreement with the farmers union and the opposite party, the farm Acts have been passed in the recent monsoon session.

The farmers are mainly protesting against these Acts because they are worried that the Farmer’s Empowerment and Protection Agreement of price Assurance Act may eventually put an end to MSP (Minimum Support Prices on Farmers). The farmers feel that without any legal guarantee or assurance by the government that the procurement price of farm produces will not be less than the MSP at any places in India, they cannot abide by the Act passed.

The farmers also fear that the increased private investments in the agriculture field and agricultural produce may lead to unemployment and growing debt for small scale farmers. They also worried that they might force to sell their farmlands to the corporate companies. The next issue that the farmers raised in the farm act amendment is that this may let the agricultural market to corporate companies’ hands.

This may empower them to fix the procurement price from the farmers. They also say that these acts will affect the small farmers who do farming in lease land at large because no corporate will deal with small farmers.

What is the Government Stand Point and Point of View of Farmers?

In the Stand Point of Government, the three farm Acts passed will help the small and regional farmers to sell their agricultural produce outside the Mandis at the margin fixed by their own will. These Acts allow farmers to agree with agricultural-based industries and corporate.

As a result, there will be an enhancement in the growth and development of the agricultural market in the country. The Government also stated that these farm Acts had removed all the restrictions related to Stock holding Limits of some key commodities like Onion, Pulses, etc. This helps the farmers to earn their returns out of their investment in farming. These Acts will create competition in the market; the direct marketing of agricultural produce by farmers themselves will be cost-effective.

Whereas, in the viewpoint of farmer’s these farm acts are not beneficial until the government gives any legal guarantee about the procurement price. A Farmer’s Union also states that the above-mentioned farm acts are non-beneficial to small-scale farmers, wholesalers, and retailers and also laid down the way for corporate and industrial sectors to enter into an agricultural market by directly agreeing with farmers.

The majority of the Corporate Companies and Industrialist were interested and focused to invest in the large scale farmers. Once these industrialists occupy the market there will not be any place for the small-scale farmers in the market. As a result instead of creating competition, it might lead to a monopoly in the market.

Why farmers of Haryana and Punjab are protesting?

The Farmers of Punjab and Haryana are protesting against the Farm legislations amended by the Parliament In Sept 2020. The farmers from these states worried at large when compared to others because they gain largely from the MSP procurement. Though the government has assured several times that the MSP system will stand active but the farmers are not ready to believe without any written assurances from the government.

The farmers of these two states mainly agitate because of 2 issues i.e., primarily MSP shares on Paddy and Wheat they hold, and secondly, the Farmer’s Produce Trade and Commerce Act will reduce the role and significance of APMC (Agriculture Produce Market Committee). As per the 2019-20 Annual report, the purchase turnover of rice in the state of Punjab is more than 108 lakh tons and wheat is more than 127 lakh tons.

What are the discussions that are happening between the government and farmer unions?

There were five failed rounds of talks taken place between the Head of Farmers Trade Union and The Government. The Sixth round of talk has been declared to be held on Dec 9, 2020. In the fifth round in which Union Agriculture Minister Narendra Singh Tomer, Minister of State for Commerce Mr. Som Prakash, Minister of Food and Public Distribution Piyush Vedprakash Goyal, Agricultural Secretary Sanjay Agarwal and 40 representatives of various Farming Trade Union were present and they discussed the contingencies and issues related to dispute resolution, registration of traders under new laws.

The proposal has been placed for organizing a small committee consisting of 5-7 members to discuss the issues of the Farm legislation by the government to the representatives which have been rejected immediately by the representatives. Though the government states repeatedly that the MSP system will be in practice the farmers are not ready to accept without any written assurance. As a result, the discussion ends up without any conclusion, and protestors immediately declared “BHARATH BHANDH”.

ENDNOTES

1. https://www.aljazeera.com/economy/2020/12/1/why-are-thousands-of-indian-farmers-protesting.
2. https://indianexpress.com/article/explained/punjab-haryana-farmer-protests-explained-delhi-chalo-farm-laws-2020/
3. https://www.opindia.com/2020/11/farmers-tell-how-they-are-benefitting-from-the-new-farm-Acts/.
4. https://www.financialexpress.com/economy/explained-what-the-new-farm-Acts-are-all-about-and-why-being-opposed/2086681/.
5. https://www.thehindu.com/news/national/explainer-why-are-the-agriculture-Acts-being-opposed/article32618641.ece.
6. https://economictimes.indiatimes.com/news/economy/agriculture/why-many-indian-farmers-and-politicians-oppose-pm-narendra-modis-farm-laws/articleshow/78237635.cms?from=mdr.
7. https://www.downtoearth.org.in/news/agriculture/after-effects-of-new-farm-laws-why-is-there-chaos-in-the-mandis-74179.
8. https://indianexpress.com/article/opinion/editorials/farmers-agriculture-apmc-mandi-green-revolution-agrarian-crisis-monopoly-6418046/.