Farming Trade Ordinance
By Shivaji Sarkar
Indian agriculture is a complex mix. It has myriad problems and the solutions suggested are often not practical. Interestingly, the largest beneficiaries of the food dole to 80 crore poor are the producers of the food grains!
It is a dichotomy. Often, in terms of agriculture, privatisation, private investment and handing it over to private hands become the policy plank. More this is being discussed and “reformed” through ordinances, the government is getting enmeshed in it by direct benefit transfers, Rs 6000 pension for farmers and dismantling their mandis (local wholesale markets) under the agriculture produce committees (APMC), easing Essential Commodities Act and facilitating contract farming.
There is apparent policy confusion. The first major agriculture reform was the Green Revolution, creation of mandis and setting up the Food Corporation of India (FCI) for procurement, creating buffer stock and distribution. It has its pluses and some minuses too. Except at purchasing level, the government is not involved.
Farmers still are making their own investments, may be now through bank support extended by the kisan credit card or simply bank loans. Government institutions selling seeds, fertiliser or other support do it at commercial rates and a bogey had been created that the farmers are dependent on the government. The mandis despite many flaws served them well and assured payments. The mahajan (money lender) system popularly enshrined by cinematic character Sukhi of Mother India found their roles limited, but not eliminated.
The Sukhis are still there for smaller tillers who still do not find it easy to have bank support. The new ordinances are euphoric about a pan-India market – a complex and expensive system, “larger” involvement of private sector, a euphemism for multinational involvement in the farm sector, which is operating for almost two decades through various “cash and carry” wholesale trade across the country. Some Indian firms too have entered the scenario. In Kashmir, some companies have monopolised the apple trade through their leased orchards; in other places motley groups manage partially grape, orange, mango and spices trading.
Many have emerged as parallels of FCI. But farmers have concern. They become their pawn and alternative support is difficult once a contract is signed. The ordinances for demolition of this alternative are concern for many farmers’ organisations. Again it is all private investment that most official functionaries take pride in. That is the plus and minus. The plus is “investment”. The minus is it creates a larger chunk of farmers looking for direct government support for their survival.
The COVID-19 lockdown has opened up the chinks. The government is trying to correct it through enormous stock, it built in FCI warehouses through the years of toil. It is distributing food grain worth Rs 1.5 lakh crore for free till at least November 2020, from April onwards for over 60 per cent of the population.
Despite years of deliberations, the nation has got into the same quagmire of government support to farming instead of promoting individual farmer’s capabilities to be self-sustaining. The APMC mandis have flaws though it is a robust system. Since it is still an ordinance, the policy makers need to relook for removing the flaws but prevent its demolition. The ordinance should for now not be enacted into statutory law.
Over the years corporate cartels have created lobbies to control the base of Indian economy – agriculture. It is profit-oriented, not a bad word, but at the cost of sustenance of the farming community. The farmers need monetary support all through the year. They need small credits. This is provided by the buyers at the mandis and adjusted against the final sales. The payments to farmers are assured in the system. Yes, this creates a kind of bondage too. There are instances of it being exploited as well.
The pan-India market is there in the mandis as well. Many farmers have taken their produce from Punjab to sell at Bihar mandis for better price. The present ordinances try to legalise that but creating monolith of large corporate players. Politically it suits various operators as election funding in bulk is assured. Practically, the nation is creating convoluted system, where the involvement of the government at micro level would increase.
Economically and financially it may be populist but certainly not profitable either for the farmers or the nation. There is another apprehension. Sizeable sections of the farmers may be controlled through Vikas Dube-type goons creating severe law and order issues – in short perpetuation of more powerful Sukhis and dumping more costs on the State.
So India neither needs a full corporate system, nor full privatisation nor full government involvement. Agriculture remains complex. Giving it to the corporate may have long-term impact on food security about which the nation has false sense as granaries overflow as per 1960s model.
India has gone far ahead of it. Now the farmer is not just food grain producer. He produces poultry, meet, dairy products, vegetables and fruit. He has yet to grow into nutrition supplier – the next level – to have a healthier nation.
Farmers will need to be supported – through finance or credit, policy interventions that turn them into competitors by increasing their power to sustain. The potato, tomato or onion farmers have none of it. The government needs to set up monitoring systems with able experts from the community, market experts and scientists. The fluctuation in production from high like potato in 2019 to low now or low production of onion in 2019 to high now cause price crash or volatility. A perspective plan in each such crop will remove the need for seeking government support. Crop production needs zone wise planning.
The MNREGA, subsidies, doles cannot be permanent solution – economic, financial or political. The combination has created severe dependence on the government. Indian agriculture has remained in the private sector and will remain so. But through judicious planning, advice and policy intervention, individual farmers have to be empowered to create a national syndrome of independent entrepreneurs.
The NDA-II under Narendra Modi has array of experts and visionaries. It needs to put them together to evolve a farming that would be strong and other sectors dependent on it. The government should remain an observer but not a direct player. And for now let us redo the three June 5 Ordinances for a better future. — INFA