Farm groups say bills got passed without scrutiny1 min read . Updated: 21 Sep 2020, 06:49 AM IST
Farmers fear they will be left at mercy of large buyers without regulatory oversight
Resetting the way farm produce is traded within India, the Parliament on Sunday gave its nod to a set of bills aiming to liberalize agriculture markets. Despite repeated agitations by farmers and the minister of food processing industries Harsimrat Kaur Badal resigning in protest, the passage of the contentious bills marks a new beginning—farmers will now have the freedom to sell their produce to any buyer outside state-regulated wholesale markets and such transactions will not attract taxes or fees.
The new set of laws allows direct purchase of produce from farmers outside state-regulated mandis (also known as Agricultural Produce Market Committees or APMCs) which have enjoyed a monopoly till now—and where trader cartels have often manipulated wholesale prices to the disadvantage of farmers. Produce can now travel freely across states, and farmers, the government hopes, will receive a better price as trade opens up to competition.
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After amendments to the decades-old Essential Commodities Act removed stock limits on traders and exporters, agri-businesses are expected to invest in post-harvest infrastructure like storage, transport and value chains.
However, farmers fear they will be left at the mercy of large corporate buyers without any regulatory oversight and monitoring. This has led to a wave of protests in Punjab, Haryana and western Uttar Pradesh—the erstwhile green revolution regions.
“The haste with which the bills were passed in the Parliament shows the lack of confidence of the government to open this up to debate and scrutiny. It knew that delving into the details would have shown the bills to be anti-farmer," said Kavitha Kuruganti, convenor of ASHA, a farm policy advocacy group.
The changes are in the right direction but unfortunately, the debate took a political turn, said Siraj Chaudhry, CEO of National Collateral Management Services Ltd, and former chairman of Cargill India. “Now that all hurdles to trade are gone, corporate players have to invest in building a relationship of trust with farmers. It may take a few years (to show results) since states have to be aligned and the ability of private players to invest is limited."
Farmers are genuinely worried, said Ajay Vir Jakhar, chairman of the Punjab Farmer’s Commission. Farmers fear that by weakening mandis and leaving them to market forces, the government will gradually withdraw from open-ended (unlimited) procurement of paddy and wheat at minimum support prices (MSP), the mainstay of farmers in north-western India.