Hyderabad: “The farm laws introduced by the Central government seem to be dragging farmers into a greater crisis. While it was expected of the government to increase investments into the farm sector to rescue the crisis-torn farmers, it made the new laws that will leave the farmers at the mercy of big business and corporate houses,” says agriculture economist Professor (Rtd) D. Narasimha Reddy.
Having retired as Professor of Economics and as Dean at the School of Social Sciences, University of Hyderabad, Professor Reddy is now working as a visiting professor at the Delhi based Institute of Human Development. He was a member of the farm commissions appointed by the Andhra Pradesh government in 2005 and 2016. An author of several research papers, Prof. Narasimha Reddy shared his views on the new farm laws with Eenadu/ETV Bharat.
What kind of problems will the farmer suffer due to the new laws introduced by the Center?
The new laws will deal a big blow to the farmers’ interests. While it was expected of the government to develop agriculture market committees by bringing in certain changes that will protect the farmers’ interests, the government introduced a deregulated agriculture marketing system. This is truly alarming. These laws will not be beneficial to an overwhelming majority of farmers.
Till date, we have had a regulated market system with Minimum Support Price. The new laws will enable demand and supply to dictate the price of the farm produce. Another important aspect is that the Essential Commodities Act has been rendered irrelevant. The Essential Commodities Act was a bulwark against hoarding. It shielded the farmers and consumers from trade practices like buying unlimited quantities of commodities at a cheap price to hoard. The law was thrown into the dust bin for the benefit of the unregulated market system. As a result of the new laws, government investment will dwindle. All regulations will be lifted. The role of FCI will be minimized. The procurement of farm produce will be completely in private hands. All the activities related to farm produce, from procurement to processing will be dictated by big businessmen. They will simply brand the farm produce to sell it for a higher price.
Investments on the basic farm infrastructure will taper out. It is common knowledge that the farm prices are commanded by the organizations or individuals that control warehouses, cold storage facilities and processing units.
The private warehouses, enabled by the new laws, will collect exorbitant charges for the storage of goods. If the farmer stores his goods in those warehouses and waits for good prices, he will get nothing more than the investment made for raising the crop. If the warehouses are in the control of the government, the farmer can store goods at an affordable price. He can also get the loan on the produce stored in such warehouses. The new laws make such conveniences impossible.
The new law enables the farmer to sell his produce at any market where he can get proper price. How can you say it will cause loss to the farmer?
Almost 85 per cent of the ryots in the country are small and marginal farmers. If the market yard is far away, the farmers sell their produce to the trader at their village itself. How can such people take their goods to far off places in search of the better price? For the 10 quintals of paddy or 10 bags of cotton he has grown, can a marginal farmer engage a tractor to carry the goods to the market located at a far off place? Can such a farmer wait until he gets a better offer at that market? Even today the farmers from Telangana are not in a position take their produce to far off places to get a better price. Farmers will be thrown into a pitiable position if the agriculture market yards are finished.
The Central government is saying that except for the commission agents based at Punjab and Haryana, no farmer will suffer any loss due to these laws. What do you say?
That is not true. The evil impact of these laws will be felt all over the country. The problem in Punjab is a little different. Almost 84 per cent of the farm produce grown in Punjab are paddy and wheat. They get MSP for nearly 95 per cent of their produce. In Punjab, change of crop means growing wheat after paddy. These crops are grown because they steadily fetch them the MSP. The irony is that Punjab grows paddy, which it does not consume. The entire crop is sold off by the farmers without keeping anything for themselves. That is not the case in other States. The farmer sells paddy after keeping some to meet his own requirements. In Andhra Pradesh, 40 per cent of the sown area is paddy. Cotton is the most extensively grown crop in Telangana, through paddy sowings have considerably increased last year and this year.
The problem is not confined to paddy and wheat farmers. Let me tell you the example of Anantapur district in Andhra Pradesh where groundnut is the staple crop. Since the past several decades, we have been hearing of the need to promote an alternative to groundnut there. Farmers in that district are raising alternatives like papaya and other horticultural crops. The grower is not getting adequate price for those crops. There are no arrangements for storage and marketing. There is support price for cotton in Telangana. Yet the cotton farmers face problems every year. Instead of taking steps to correct this situation, the government made laws that deregulate the market so that the market is handed over to private parties. The impact of these laws will be felt by all the States.
We are told that two kinds of markets will emerge as a result of the new laws. It is also said that there will be different sets of rules. How can this be possible?
Yes, there will be agriculture market committees. But private individuals will be allowed to buy goods outside those market yards. That means there will be two kinds of markets. How can MSP be enforced on private dealers? The Central government did not enact any law that binds the trader to buy the farm produce at a specific price. Instead, the new laws were introduced to enable a free market. There will be regulated marketing inside the market yard while outside of it there will be a deregulated market. Different fees and rules will be applied to each one of those markets. As a result, traders will leave the regulated market and do their business in a deregulated market. Already there are allegations that traders are colluding with each other to dictate price to the farmers at the market yards. They will do the same outside the market yard also after the law is enforced. We can approach the authorities when collusion comes to our notice inside the market yard. But outside the agriculture market yard, there will be none to hear our complaints.
Outside of the market yard, farmers will have to face problems on account of the price, weight, moisture content, grading etc. This kind of exploitation of farmers is already there in tribal areas and other remote areas. The new laws will expose all farmers to this kind of problems. It is evident from the new laws that the government wants to do away with the MSP without abolishing agriculture market yards. Except for Punjab, Haryana and Eastern Uttar Pradesh, Agriculture Market Committees (APMCs) purchase only 20 per cent of the produce from the farmers. Still, farmers are able to demand minimum price at least to that extent. When the new laws will come into force, the government will maintain that the MSP is there, but it cannot be enforced due to the deregulated market.
The Center maintains that it has implemented the Swaminathan report in toto while it was thrown aside by the erstwhile the UPA government?
This is totally false propaganda. What is happening today is in complete contradiction to what Swaminathan had suggested. The commission had clearly stipulated how to calculate the support price and advised the addition of 50 per cent to it as the price for the farmers. They are distorting the commission’s suggestion on the method of price calculation. How can that amount to implementation of the commission’s recommendation? While fixing the price, the commission has called for taking all aspects, including interest on the investment and land tenancy into account. Swaminathan Commission’s recommendations are not confined to MSP alone. The commission made several recommendations on warehouses and other basic infrastructure facilities also. What the centre is doing is in total contravention of what was recommended by the commission.
When the laws are not in favor of the farmers, can the State governments not keep them at abeyance?
State governments have no role in this. Agriculture is a State subject. Right from the supply of seed to the procurement of crop, everything is in the purview of the State government. But the Center has introduced the new laws by taking advantage of a rule that is in its favour. Earlier the Center used to make a model law and circulate it among State governments with an advice to enact something on those lines. Contrary to the earlier practice, the Center has itself enacted these laws. The States have to follow these laws. The farmer looks at the State government for all his requirements, be it seed, fertilizer, crop loan, procurement of the crop or anything else. The Center is over-riding the powers of the States. State government control will not be there if there is no controlled marketing. It is not proper on the part of the Center to act as if the State has no role in this matter. The Centre has created new business points that are beyond the purview of the agriculture market yard. That is why some States are arguing that every place where agriculture produce is sold comes under the purview of the Agriculture Market Committee. While formulating the new law, the Center has not consulted the farmers. Nor has it consulted the State governments. Tomorrow it is the farmers that will suffer. States will have to bear the brunt. As part of expanding its policy of liberalization, the Center has brought in these laws to bring big businessmen into the picture. That is why it has totally set the States aside.
What should the Center do as a measure of solace to the farmers?
The Government investment in the farm sector should be increased. Instead of giving Rs 1 lakh crore to big corporate houses for the development of infrastructure in the next ten years, the government should take up the task on its own shoulders. The sectors allied to agriculture should be encouraged. The number of people depending on those sectors should be increased to 25 per cent. The per capita landholding in the country is 2.5 acres. The farmer cannot get the required income from this small patch of land. Per-capita income of a farmer’s family is Rs 1.25 lakh. In Punjab, it is Rs 3.4 lakh.
As many as 5 crore people have abandoned farming between 2004-05 and 2017-18. Recently lakhs of people went on a long march to reach their villages after the lockdown was announced. Most of these people were farmers. While the average farm-based income rose by 1 per cent in the country, the average income growth in other sectors was 15 per cent.
Only 2 per cent of the population is dependent on farming in the US. Yet the country is able to produce one and half times more than what it consumes. Small and marginal farmers are a majority in Japan. Nearly 15 per cent of the population is dependent on farming.
Our country too should focus on the sectors allied to farming. How can a farmer owning around 3 acres of land meet the education, health and other requirements of his family? Education and health should be made affordable to the farmer. The new laws instead of ameliorating the farmer’ situation, tended to drag him into more miserable conditions.
Also read: Govt keen to resolve ongoing farmers' protest with MSP assurance
