Updated: September 12, 2020 9:35:20 am
During the protest on Friday. (Photo Express)
On Thursday, farmers’ organizations in Haryana defied ban orders imposed amid the pandemic to hold a demonstration at the Pipli wholesale grain market near Kurukshetra. Its objective was three core laws enacted through ordinances on June 5: the Agricultural Products Trade and Commerce (Promotion and Facilitation) Ordinance, the Essential Products (Amendment) Ordinance, and the Farmers Agreement (Empowerment and Protection) on Price Guarantee and Agricultural Services Ordinance, 2020. These protests, preceded by sit-ins across Punjab, are expected to gain momentum after September 14, when Parliament meets for the monsoon session.
How widespread is the unrest in Haryana?
For now, these appear to be largely limited to Punjab and Haryana. Maharashtra peasant leaders, including Raju Shetti from Swabhimani Paksha and Anil Ghanwat from Shetkari Sanghatana, have welcomed the ordinances. Shetti, a two-time Lok Sabha MP, has called them “the first step towards financial freedom for farmers.”
The opposition from farmer groups in Punjab and Haryana is also mainly to the first ordinance allowing the sale and purchase of crops outside the APMC (Agricultural Products Market Committee) mandis regulated by the state government. They probably have no real problems with the other two ordinances, which basically eliminate the imposition of limits on the storage of food products (except in “extraordinary circumstances” like wars and natural calamities of a serious nature) and facilitate shrinkage cultivation (where farmers can enter into agreements with buyers before any planting season).
The protest in Sirsa on Friday. (Photo Express)
What is the first ordinance about?
In a letter to Sukhbir Singh Badal, chairman of Shiromani Akali Dal (which is part of the ruling alliance in the Center), Union Agriculture Minister Narendra Singh Tomar has said that the ordinance simply provides for “commercial areas” outside of the physical limits of APMC mandis. These would serve as an “additional marketing channel” for farmers, even as the CMPA “will continue to operate.” The freedom of choice to sell outside of regulated mandis should help farmers to obtain better prices for their products. Furthermore, “it will motivate the CMPAs to substantially improve the efficiency of their operations to better serve farmers.” APMCs may charge mandi fees and other charges as before, but these will only be with respect to transactions that take place within the physical boundaries of their main shipyards or sub-yards.
Read also | Rumors at BJP-JJP as Haryana Farmers Protest Central Ordinances
So what is fueling the protests?
There are two drivers. The first is the farmers, who see the dismantling of the APMC monopoly as a precursor to ending the existing system of purchasing grain by the government at guaranteed minimum support prices (MSP). In 2019-20 alone, government agencies in Punjab and Haryana purchased 226.56 lakh tonnes (lt) of rice and 201.14 lt of wheat, the value of which, in their respective MSPs of Rs 1,835 and Rs 1,925 per quintal, would have been of Rs 80,293.21 crore.
The ordinance itself does not mention anything, directly or indirectly, that suggests the end or phasing out of public procurement based on the MSP. But farmers’ leaders argue that the real intention of the latest reforms is to implement the recommendations of the High Level Committee on Restructuring of the Food Corporation of India (FCI) headed by Shanta Kumar. This panel, which presented its report in 2015, had asked the FCI to hand over all procurement operations in Punjab, Haryana, MP, Chhattisgarh, Odisha and Andhra Pradesh to state government agencies.
“The committee wanted the Center to get out of acquisitions and leave everything to the states. Where do they have the money to buy and store so much grain? This… is only intended to be an exit strategy from the Center, ”alleged Jagmohan Singh, general secretary of the Bhartiya Kisan Union (Dakaunda faction).
The Congressional government in Punjab also passed a resolution in the Assembly on August 28 urging the Center to make MSP-based procurement “a legal right of farmers.” In addition, he sought a “continuation” of said recruitment through the FCI.
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Reaction to the ordinances has not been uniform. (Photo Express)
What is the second driver of the protests?
That comes from the state governments and arhatiyas (commissioners) in mandis. The Arhatiyas (Punjab alone has about 28,000) provide platforms outside their stores, where farmers’ products are unloaded, cleaned, auctioned, weighed and bagged, before being loaded and taken out. They receive a commission of 2.5% above the MSP. These payments totaled more than Rs 2 billion in Punjab and Haryana last year.
States also derive substantial revenue from the various liens on the value of products that are traded in the APMC. Punjab’s annual revenue from mandi fees and a ‘rural development’ tax, which add up to 6% on rice and wheat, 4% on basmati and 2% on cotton and corn, they are estimated at Rs 3,500-3,600 crore. All of that would obviously be affected if exchanges were to shift away from mandis.
Is there a way out?
As noted above, the reaction to the ordinances has not been uniform. Shetti and Ghanwat believe that farmers will benefit if processors, retailers or exporters invest in infrastructure for direct purchasing. Currently, farmers spend money transporting their produce to the mandis, which they can save by making purchases closer to their fields. But even these leaders feel that the Center should reach out to farmers in Punjab and Haryana to dispel any misunderstandings. The hasty way in which the ordinances were passed, during the height of the pandemic, may also have increased the trust deficit.
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