As a political battle rages to open up the agricultural sector and the procurement of agricultural products to large private players, farmers in one of the largest grain and vegetable producing states, Uttar Pradesh, are in a bind. Unlike the farmers of Haryana and Punjab, in UP the community, while a bit wary of the farm laws passed by Parliament, is still in the mood to wait and watch. This is because when dealing with private actors, exploitation by both government-controlled mandi and by intermediaries or open market agents is a bitter reality for them.
However, at the time when the Center and the ruling Bharatiya Janata party have been trying to convince farmers that government mandi will continue to exist, the procurement system and the minimum support price (MSP) situation in Uttar Pradesh it is a great disappointment to many. . This is because public procurement never exceeds 15 percent of total crop yields and most farmers never get MSP benefits for their crops.
The situation on the ground in UP shows how both government and open markets can be exploitative for farmers, especially where most of the growers are the poor and marginalized. Since the average land tenure is even less than the national average of 1.15 hectares, more than 80 percent of farmers in UP fall below the mark.
WHY THE GOVERNMENT MANDIS ARE INEFFICIENT
The first obvious question is why, unlike in Haryana, Punjab and even states like Madhya Pradesh and Maharashtra, the government procurement and mandi system is so inefficient in Uttar Pradesh. It should come as no surprise that this year, the state government’s procurement of wheat was just 36 lakh metric tons, which was well below the target of 55 lakh metric tons. Such a low purchase came despite the state producing a record 385 metric tons of wheat.
This is also the reality when it comes to buying rice, despite the fact that the BJP government in the state led by Yogi Adityananth had been making big claims about improving the mechanisms for public procurement.
Professor Sudhir Panwar from Lucknow University, who works for farmers’ rights, especially in the western UP, says: “Like all other public sectors, also in agriculture, the government wants to withdraw its operations and create a space for private actors. That is the reason why government mandis have become less attractive over the years, procurement mechanisms and the entire supply chain, from fields to mandis to storage centers, have become less attractive. neglected. The new agricultural laws will further reduce the role and control of the government in this sector. If the government’s intention is clear, it should establish a written provision that farmers’ purchases on the open market will not be less than the MSP. “
DEPENDENCE ON OPEN MARKETS AND REALITY
Since public procurement accounts for less than 15 percent of the total harvest, open markets in their current structure are the only option left for farmers. But experience shows that this open market has its own share of exploitation. Rarely do large companies or companies do direct business with farmers, most of whom have small holdings.
The farmer has no choice but to deal with the middlemen, or Adhatiyas, as they are known in the local language. The Adhatiyas generally pay less than the MSP. The only consolation for the poor farmer is that he has enough cash to cover his investment needs to plant the next crop.
Even well-off farmers are not safe from exploitation and lower MSP payments on the open market. Amrendra Singh, with around 300 bighas of land in UP’s Barabanki district, shares his experience. “For any farmer, transporting their products and finding the right buyer is a great challenge. Getting to the market through the middleman is a reality and therefore farmers like us are not usually in a position to negotiate either, “he says.
Amrendra also wants that, while opening the market directly for large companies and corporations, the government must ensure that purchases below the MSP cannot be made. “If the government cannot act as a guarantor of prices for farmers, the new invoices can increase exploitation,” he adds.
Brijesh Shukla, a freelance journalist who reports extensively on farmers’ problems, says: “In Punjab and Haryana, farmers have large holdings, they have influence over the government, and that is why the mandi have served them well. The maximum buy is in the MSP and that is the reason why they fear the new changes. But at UP it has been a very different story, and that is why the farmers here still cannot take a clear position on the new bills. “
THE WAY AHEAD AND POSSIBLE DANGERS
Right now, as the government and the opposition clash over the merits and demerits of the new bills, serious doubts remain about the way forward. On the opposition’s accusations of betraying the interests of farmers, Prime Minister Narenra Modi has assured the nation that neither the MSP mechanism will be diluted, nor will public procurement, and the mandi will stop doing business.
But, on the ground, a veil of suspicion lingers. Farmers are especially unsure about how much of the poor and small-scale farmers will be able to cope with the new form of contract farming and open market regulations. Manoj Singh, a middle-income farmer from the Barabanki village of Tandpur, feels that small farmers will not be in a position to decide the terms and conditions of contract farming and rates with large companies and industries. “Poor and marginalized farmers can be pushed even further against the wall under the new laws,” he says.
Professor Prashant Trivedi from the Giri Development Institute study cites his research and says: “Past experiences from different parts of the country show that large companies are inclined to deal with large farmers. Working with smallholders increases your investment and acquisition costs. So the question remains how they will reach out to poor and marginalized farmers, especially in states like Uttar Pradesh. “
Another aspect is that of the MSP. At the moment, even if a farmer is not paid the MSP in the open market, the fixed price still acts as a certain benchmark. Even if the payment to the farmer is lower, the open market is forced to work in the price range of the MSP.
“Therefore, the farmers are justified in their demand that the government give a written guarantee that it will continue with the MSP mechanism and that private actors will not be able to decide their own tariffs,” says Professor Trivedi.
As political parties continue to fight for what are called long-awaited structural reforms in the agricultural sector, there is a long way to go to determine the real impact of potential new laws. The impact, in turn, will redefine the mood and politics on the ground. At the moment, it’s more of a wait and watch scenario for the “Annadata”.
.
