The farm ordinances fail to resolve the dilemma of depressed farmer livelihoods even while amputating the ameliorative measures earlier built into the system.
Not all ordinances are reforming and not all reforms are the “1991 moment”; at least not for agriculture. The recent ordinances to facilitate trade in agricultural produce have been historically resisted by the bureaucracy and the states. Pent up frustration over repeatedly failing to change the status quo of depressed farmer livelihoods and the pressure of the instant-delivery seeking PMO, had the establishment introducing ordinances rather than bills.
Bills need to be placed in the public domain for comments, have consultations with farmers and states expected to experience loss of powers and curtailment of revenues, which would get a hearing. In the hurry to impose ordinances, however, the baby has been thrown out with the bath water, specifically with ‘Farming Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020.’
Due to the unionisation of middlemen (arathias) and their financial clout, politicians in the states have been reluctant to amend agriculture marketing laws, which are exploitative and do not allow farmers to receive a fair price. Rather than coaxing the states financially to correct the markets, an unregulated marketplace has been created where 150 million farmers will be exposed to the skulduggery of traders. Imagine the mayhem in the stock markets if ROC and SEBI were similarly made redundant!
Rather than replicate Punjab’s successful agriculture mandi model, what obtains now is that states will lose vital revenue to even upgrade and repair rural infrastructure. The ordinance may be challenged by the states for its constitutional overreach. However, over time, the largest informal sector in the country will begin to get formalised and new business models will develop. A different breed of aggregators will create the much-needed competition to the existing monopoly of local traders.
Additionally, henceforth, when farmers sell agricultural produce outside of APMC market yards, they cannot legally be charged commission on the sale of farm produce. To survive, the APMCs across the nation will have to radically standardise and rationalise their mandi fee structure and limit the commission charged by traders on sale of farmers’ produce.
To my mind, with the amendment limiting the powers and revenues of the state but not those of the agriculture department itself, the central government rushed in with an amputation where a surgery would have sufficed. However, where an amputation was required, in the Essential Commodities Act (ECA), 1955, a band-aid dressing has been applied.
This amendment was supposed to allay the genuine fears of traders vis-a-vis the bureaucracy’s draconian powers to arbitrarily evoke stock-holding limits and such others. Rather than forego its own powers for the larger good, the amendment’s fine print makes it ambiguous and leaves space for whimsical interpretations as before. The trader’s uncertainty is compounded by the arbitrary import-export policy decisions that dilute the purpose of the amendment itself.
Finally, “The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020” could have been simply called the “contract farming ordinance 2020”. It tries to placate the fears of both the farmer and the contractor when they sign an agreement. For the farmer, the legal recourse is never a practical choice as the persuasive powers of the aggregators’ deep pockets cast a dark shadow over the redressal process. Likewise, the tediously stretched legal proceedings are a dissuasion enough to either not seek redressal or settle for unfavourable terms.
That produce derived from contract farming operations will not be subject to any obstructionist laws is a very good step. It will provide farmer-producer organisations and new aggregators with a boost and become a harbinger of prosperity in some small corners of the countryside. There are green shoots in the ordinances but the downside dwarfs them all.
The union of the three ordinances appears to be a precursor to implementing the Shanta Kumar Committee recommendations to dilute and dismantle FCI, MSP and PDS, which will push farmers from the frying into the fire. It may also be interpreted to mean that now the sugar industry need not pay farmers the central government FRP or the state government SAP price for sugarcane.
The way the establishment has gone about pushing these ordinances has cost it the lost moral and political ground even amongst its most ardent supporters.
Shakespeare said: “The evil that men do lives after them; the good is oft interred with their bones”. As in the past, the government’s efforts are not delivering a cure and, like a wound, rural distress festers. Officers creating policy retire and cease to be held accountable for the mess that they leave behind.