The central government has met with criticism over the farm laws from almost all states, especially from Punjab and Haryana. Are these new farm laws a transitionary move for agriculture?
New Farm Laws
The first bill, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation), facilitates farmers to sell their produce anywhere without mandi agents. A buyer with a PAN number can now buy directly from farmers. The second bill, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services, provides a setup for contract farming. The third bill, the Essential Commodities (Amendment), removes several restrictions on the export and stocking of agricultural commodities.
What Government Asserts the Bills Will do?
While critics claim that new farm legislation will lead to a withdrawal of government from the agriculture sector, the government believes that it will be a watershed moment for the entire agriculture sector. It will encourage the private sector to invest in the agriculture sector. Consequently, the advancements in the marketing infrastructure will increase productivity and yield better prices to farmers.
The Bills will reduce farmers’ dependence on Arhtiyas (middlemen) by liberating to sell to anyone in the new trade areas. Also, it will assure farmers a pre-determined price at the time of sowing. However, farmers state that the bills will weaken the state procurement and hence the MSP. Besides, they complain that without a proper regulatory framework, large corporate players will reduce the farmers to price takers.
Level of MSP Awareness
Data collected by Niti Aayog and a survey conducted by NSS reveal that a large number of small and marginal farmers remain unaware of MSP. That said, awareness regarding MSP for rabi crop is 17% and 18% for Kharif crops across the country. MSP awareness for wheat and rice remains as low as 39% and 31%, respectively. Also, the data collated shows that only 25% of agricultural households sold their produce in the APMC Mandis while the rest sold it to private players. Likewise, the percentage of procurement of wheat and paddy by state agencies was 16% and 10%, respectively. Except in Haryana and Punjab, the APMC market regime either doesn’t exist at all, or it is too weak to let the trade take place.
Way Forward
So what should be done to help farmers? Experts suggest expanding the existing marketing infrastructure by promoting more Farmer Producer Organizations. Also, they advise Panchayati Raj institutions to establish more village market organizations that can buy and aggregate produce from small and marginal farmers. Thereafter, they can negotiate on farmers’ behalf with the traders. Besides, there is a need to increase opportunities in the non-farming sector to make the rural economy more viable.
In all, farmers are discontent with the amendment in the farm laws. Whether these amendments will lead to a transition in the agriculture sector is uncertain for now as will continue to protests against the farm laws.