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Modi govt’s proposal shows it wants farmers to look unreasonable, not address their concerns

Modi govt’s proposal shows it wants farmers to look unreasonable, not address their concerns

Now that the Narendra Modi government has agreed to amend the farm laws, why are farmers being so stubborn? Shouldn’t they seek amendments of their choice, rather than ask for complete repeal? Sounds reasonable, doesn’t it? That’s what the government’s proposal for amendments was meant to be: sound reasonable without addressing the farmers’ concerns and objections. The name of the game is to push the ball away from the government and make farmers look unreasonable in the propaganda war that the Modi government has unleashed against this historic rebellion. This game of proposals and amendments serves as a smokescreen for the devious game of iron hand and velvet gloves, even as lakhs of farmers face plunging temperatures and rains, having lost more than 50 protesters.

For all its claims, the Modi government has put very little on the negotiating table. The government’s proposal to amend two of these laws were first made orally during the talks on 5 December and rejected on the spot by the farmers’ delegation. The same proposal was put down on paper and sent to the farmers on 9 December and reiterated on the 16th. They met the same fate. Apart from an oral assurance of stepping back on two secondary issues (penalty on stubble burning and draft Electricity Bill 2020), the government is yet to add anything to its one-month-old proposal for a few amendments in the three contentious laws. Interestingly, the government has not even made a proposal addressing the objections of the farmers to the Essential Commodities (Amendment) Act that facilitates the future plans of Adani Agri Logistics Ltd.

Skirting the real issue with dual regulation

The Modi government would like us to believe that the two amendments it has proposed in the Agricultural Produce Market Committee (APMC) bypass Act – officially called Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 – are the most substantial concessions. The Centre proposes to allow the state governments to register private mandis and impose market cess/fees in them to the same extent as in the APMC mandis, and to register the traders. Mind you, the proposal is not about imposing cess/fee on private mandis as the Bharatiya Janata Party (BJP) spokespersons claim on TV, but allowing the state governments to do so, if they so desire.

So, the government seems to have acknowledged one critical objection to this law by protesting farmers and many eminent economists – that it is unviable to have a dual regulatory system, with the state government regulation and fees under the APMC Act on the one hand, and practically no regulation in the ‘trade areas’ created by the FTPC Act on the other. Yet, the proposed amendments do not fix this problem, which is not simply about market cess, but about instituting unequal regulatory system. The amendments would not give states the power to regulate private mandis. Private traders and companies would still prefer to move to the poorly regulated space outside the mandis – thus leading to the collapse of APMC mandis and the support system they provide to the farmers.

Dual regulatory system is the heart of the matter in the APMC bypass law. While APMC mandis have many problems that need to be fixed, the farmers need a regulated market to protect their interests in terms of price, payments and fair market practices. They need regulated mandis to safeguard them on non-price issues such as weighing, grading, moisture measurement, etc., as well as facilities such as godowns and drying yards. We only need to look at Bihar or remote areas in any state, especially the tribal regions, to see that wherever farmers lack access to regulated market infrastructure, they face higher exploitation and lower prices.

The same applies to the Modi government’s proposal to allow the farmers to approach the civil courts for dispute resolution. The problem is that most small farmers have very little resources in terms of time, finances or legal expertise. Resolving disputes ex post facto by going to either a civil court or an SDM court is not viable for farmers, and they would often lack documentary proof to establish their case. What they need is a robust local regulatory system under the local and state government where their issues can be addressed immediately. Creating an unregulated market system and asking the farmers to go to court is not a solution.

You might ask: what if the government amends this law to do away with the dual regulatory system of creating ‘trade areas’ outside the APMC regulated markets? Well, in that case, you don’t need this law at all. You might as well repeal it.

Red herrings on contract farming

The Modi government’s proposal on amending the Contract Farming Act – officially called Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act – also dodges the real issues. The Centre has proposed an amendment that merely requires a copy of the written contract to be available with the SDM. The trouble is that very few companies register their contracts or even enter into written agreements. Almost all the contract farming that happens in India is ‘predatory contract farming’ through unregistered intermediaries such as ‘organisers’, where the farmers have no recourse when they make losses, when the seeds given by the company fail, or when the companies fail to purchase at the agreed price. The new Act only seeks to expand contract farming, without addressing these issues, and with no provision to ensure fair pricing.

Instead, the Modi government creates a straw man and destroys it. It seeks to introduce amendments to reassure the farmers that the company shall not be able to take away their land, or take a loan against any structure created on the farmers’ land by the company. It reiterates that no attachment of farmers’ land will be permitted under the contract. But that is not the point. The concern of farmers is about losing control of their land and assets as a consequence of contract farming.

Contract farming typically involves high input costs to the farmers with the promise that the company will purchase, often in commodities which preclude other buyers. But when they lose the crop or the company doesn’t keep up its promise, the farmers face huge losses, which push them into losing their assets. The two parties to the contract, small farmers and big agribusiness companies, are highly unequal in terms of financial and legal resources.

This has already happened under the existing contract farming. Seed farmers in Telangana and Andhra Pradesh lost lakhs of rupees due to faulty foundation seeds. Gherkin farmers found that their land was depleted and then they were dropped by the company after three years. They have little protection under the current Contract Farming Act. While Section 15 of the Act says that no action for recovery shall be initiated against the farmer’s agricultural land, the farmer can end up in deep debt, lose other assets such as house or tractor, and may end up selling land to protect from losses.

The Act provides for indirect control of agriculture by corporate houses. The ‘production agreements’ provided in Section 2(g)(ii) of the Act enable companies to make contracts with a large number of farmers in proximity and take over the cultivation. The Act already envisages that the contracting companies may set up structures on the farmers’ lands, showing that it is not simply about product purchase. Farmers can see that these are initial steps towards large-scale corporate farming and would lead to agriculture going out of their hands into those of the companies.

Way forward

The final question: by asking for nothing less than a repeal of these laws, are farmers not obstructing reforms in agriculture? The simple answer is NO. Agriculture and agricultural marketing is a state subject. Most state governments have undertaken reforms in their APMC laws, pushed and incentivised by the central government. The Union Ministry of Agriculture acknowledged as late as in July 2019 that most of the provisions of the Model APMC Act, 2017 brought by this government had already been adopted by 20 states/UTs. Why rush through new acts, bypassing the state governments and the farmers? The Modi government must repeal these Acts and sit on the drawing board with the stakeholders to facilitate meaningful and effective reforms.


Author: Yogendra Yadav

Published In: The print

Kiran Vissa is a farmer activist with Rythu Swarajya Vedika and member of the working group of All India Kisan Sangharsh Coordination Committee. 

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