NEW DELHI: At a time when protesting farmers had decided to continue their agitation, a group of economists wrote to Agriculture Minister Narendra Singh Tomar on Thursday, calling on the government to repeal central agricultural laws that they claimed did not favor the best interests of little and marginal farmers.
The economists proposed five reasons why the three laws were fundamentally harmful in their implications for small farmers. “We believe that improvements and changes in the agricultural marketing system are required for the benefit of millions of small farmers, but the reforms brought by these laws do not serve that purpose,” they said.
The economists who wrote the joint letter included Kamal Nayan Kabra (retired professor, IIPA, New Delhi), D Narasimha Reddy (retired professor, University of Hyderabad), R Ramakumar (teacher, TISS, Mumbai), Arun kumar (professor, Institute of Social Sciences, New Delhi), Vikas rawal (associate professor, JNU) and five others.
Referring to the provision of unregulated ‘trade area‘outside APMC’ mandis’, they said that there were mechanisms to address and prevent market manipulation in APMC markets, while the Central Law does not contemplate such mechanisms in unregulated commercial areas. They said that there would be no safeguards for farmers against non-price means of exploitation such as weighing, sorting, moisture measurement, etc. in unregulated commercial areas.
They also noted that APMC’s yards were still setting reference prices through daily auctions and offering some reliable price signals to farmers. “Without these price signals, fragmented markets could pave the way for local monopsonies,” they said while citing the example of Bihar, where farmers have fewer buyer options and less negotiating power, resulting in significantly lower prices. lower compared to other states, since the elimination of its APMC Act in 2006.
On the contract farming law, they said that while contract farming agreements are voluntary in principle, the acute crisis in agriculture without price guarantees may push farmers towards this paradigm in hopes of saving themselves from the crisis. “However, the reality of the contract farming experience does not confirm this in the absence of mechanisms to protect their interests,” they said.
Economists also believe that the new laws would undermine the role of the state government in regulating agricultural markets and this, in turn, would negatively affect farmers. “The machinery of state government is much more accessible and responsible for farmers, down to the village level, and therefore state regulation of markets is more appropriate than including a large part of the sales and trade of products. basic principles within the scope of the Central Government Law, establishing commercial areas ”, they said.
On farmers’ concerns about the dominance of large agribusinesses, economists said: “It is legitimate to understand that the three laws together represent the liberation of agribusiness companies from state-level regulation and licensing, restrictions such as existing relationships between farmers, traders and market agents, and the limits of storage, processing and marketing.
“This rightly raises concerns about the consolidation of the market and the value chains of agricultural products in the hands of a few large players, as has happened in other countries such as the United States and Europe. Inevitably, it led to the ‘Increase or Exit’ dynamic in those countries, driving out small farmers, small traders and local agricultural businesses. ”
Instead, they believe that what Indian farmers require is a system that allows them better bargaining power and greater participation in the value chain through storage, processing and marketing infrastructure in the hands of farmers and MROs. .
“That would be a way to improve farmers’ incomes, and some of the government’s previous policy initiatives were expected to help in that direction. However, current laws establish a different direction in which it corresponds to agro-industrial companies, free from regulations and restrictions, to invest and establish a processing, storage and marketing infrastructure, consolidating their control in the value chain, while the government backs down of their commitment to help farmers build infrastructure and consolidate their negotiating position in the market, ”they said.
Referring to these points related to APMC mandis, commercial areas, contract farming and the dominance of agribusiness, economists believe that modifying some clauses will not be enough to address the concerns raised correctly by farmers.
“For example, if the establishment of unregulated ‘business areas’ outside the purview of state regulation is in itself detrimental, then any modification with some provisions of the Act will not address that,” they said.
Noting that it is undesirable to perpetuate the impression that farmers are misled by others when they raise valid and genuine concerns, they said: “The current stalemate benefits no one and it is the responsibility of the government to resolve it proactively. addressing farmers’ concerns. ”
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