FARM BILLS 2020 : POLICY. PROTEST. PANIC – A DEEP DIVE.
By: Souvik Roy Moulick
Tags: Farm Bills 2020, Farmers Protest, India, Agriculture, Policy

Commenting on the parenthesis in our agrarian policy Salil Thripathi wrote that among the advisers and framers of our public policy “there are too many people pretending to be farmers.” It would be unfair to not acknowledge that I, like many around, assume a similar position in this piece. But having said that I also hope that I can contribute genuine intent behind this posturing.

On September 27, President Ram Nath Kovind gave his assent to three contentious farm bills passed by Parliament — The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 (FAPAFS), the Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 (FPTC) and the Essential Commodities (Amendment) Act, 2020 (EC). First off, lets look at the what the three bills offer (you may directly skip to the twelfth paragraph if you are already familiar with the bills) –

a) In The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 or FAPAFS there are primarily two parts. The first pertains to farming agreement between farmer and a buyer effective pre-production or before rearing. Minimum period of agreement has been defined as one production cycle of livestock. Maximum period has been defined for five years, unless the production cycle requires more than five years. The second part pertains to pricing of the farm produce. It defines that pricing of the agricultural produce should be mentioned in the agreement and for prices subject to variation the process of price determination must be also mentioned in the agreement. Long story short, this act creates the basic framework for contract farming through an agreement.

b) Essential Commodities Ordinance, 2020 Regulation of food items is effectively an amendment that introduces changes in the previous Essential Commodities Act (1995). The later empowered the central government to enlist certain commodities like food items, fertilizers, and petroleum or any other product as an essential commodity to meet demands of mass consumption. It allowed the central government to ensure smooth supply of such goods or to regulate and prohibit their production, supply, distribution, trade, and commerce whenever it wanted. The amendment limits these powers enjoyed by the central government only during, what the bill defines as ‘extraordinary circumstances’. The extraordinary circumstances include – war, famine, natural calamity or extraordinary price rise.

That’s not all. The amendment also restricts the imposition of any storage limit exempted only during the following very unlikely circumstances :

1) If there is a 100% increase in the retail price of horticultural or perishable produce.

2) If there is 50% increment in the retail price of non-perishable agricultural food goods.



This increment will be calculated over the existing price immediately exceeding 12 months, or the average retail price of the last 5years. There is however a catch. Whichever of the two is lowest shall be taken into consideration.

c) The Farmers Produce (Trade and Commerce) Act, 2020 allows intra-state and inter-state trade of farmers’ produce beyond the physical boundations of APMC markets in states. State governments are also prohibited from levying any market fee or cess outside the APMC mandis that are not under their ambit of regulation. Much of the contention is premised around the provisions of this act.

The act also permits electronic trading of farmers’ produce (agricultural produce regulated under any state APMC Act) in the specified trade area. Electronic trading and transaction platform aims to provide a system for online buying & selling of produce. Section 5 of the ACt provides framework for electronic trading and transaction platform where the Central Government shall by rules –

(1) specify the procedure, norms, manner of registration; and

(2) specify the code of conduct, technical parameters including inter-operability with other platform and modalities of trade transaction including logistics arrangements and quality assessment of scheduled farmers’ produce and mode of payment, for facilitating fair inter-State and intra-State trade and commerce of scheduled farmers’ produce in a trade area.

That is the crux of what the three Acts offer. So, why are farmers opposing the policies that the government claims are designed for their benefit? In fact there were ongoing protests in Punjab, Haryana and Uttar Pradesh even before the bills were taken up in the parliament. We can discuss at length about various conspiracy theories behind the uprising – which I will take up later in the piece – but it is worth examining the contentions first off. And to understand why these bills are being opposed we must first take into account who are the ones protesting against these ‘reforms’.

While it is true that so far the protests have been led primarily by farmers from Punjab and Haryana, this reductive hypothesis also blurs out the extent of the agitation that over 80,000 farmers organised protests in around thirty different regions of Maharashtra on 26th and 27th November, over 500 dissenting farmers have so far been arrested from Karnataka and Tamil Nadu alone where prominent farmer leaders Rishipal Ambawata and P. Ayyakannu have also been placed under house arrest by the administration, taluka wise protest have been going on in Bihar, Chattisgarh and Jarkhand for weeks now. From south of India, many farmers are on their way in trains. Farm union leaders from Karnataka, Tamil Nadu and Kerala are on their way in the hundreds but because lack of public transportation due to coronavirus, many protests are being mobilied locally to show support. From Madhya Pradesh farmers and daily-wage workers had to organise their own means of transportation because several trains like the Jabalpur Festival Express train, in which many protestors were travelling to Delhi from Madhya Pradesh, has been cancelled by the administration. From Uttarakhand over 300 trolleys and tractors joined the protest on the morning of November 30th. In Uttar Pradesh most farmers are are not being allowed to mobilise and many union leaders have been sent notices by the government and police. Printing of pamphlets and leaflets about the protest has also been forefully stopped in many places. Right now over 415 farmer unions – including RSS’s Bharat Kisan Sangh and BJP’s own farmers body (Kisan Morcha) – are organising nationwide protest under the banner of Sanyukt Kisan Morcha.

Even last year farmers from 22 states and 4 Union territories mobilised in Delhi in similar demands for loan waiver, MSP and procurement guarantee. In fact All India Kisan Sangharsh Samiti & All India Kisan Sabha – the largest farmer union bodies in the country – never called for a kisan march to Delhi. On 24th November they had asked the farmers to seek solidarity action from elsewhere. On 26th there were large number of solidarity movements across the country to the extent that even the nationwide Worker’s Strike on 27th November recognised the demand of the farmers and also formally incorporated the farmers claim in their own set of agendas. Fifty one Transport Unions, bank unions, BSNL and LIC employees from across the country also declared their solidarity with farmers call for ‘Bharat Bandh’ on 8th December. But lets just get back to Punjab and Haryana for the time being.

The procurement mechanism in Punjab and Haryana is particularly efficient compared to the rest of the country. This is because this was the hotbed of Green Revolution in the 1960s when farmers were incentivised to grow rice and wheat by offering procurement through Food Cooperation of India (FCI) at a Minimum Support Price (MSP) declared before every agricultural season. This was primarily done to meet high domestic demand and supply shortage. Today, on paper, MSP is provided on 23 crops including some pulses and oilseeds and the overwhelming fear among farmers is that the new reforms are a step towards the eventual dismantling of the MSP mechanism and those farmers from Haryana and Punjab who benefit tremendously from it will stand to lose the most. But not all farmers in these regions benefit equally and it is particularly concentrated among those with large and medium size land holdings. ‘Price Policy of Rabi Season.2020-21’ published by the Commission for Agricultural Costs and Prices, which is a part of the Ministry of Agriculture, points out: “As indicated by data received from some states, medium and large farmers occupy a major share in total procurement in the State and share of small and marginal farmers, though improved during last few years, remain low.” However small farmers have also joined the protest in large numbers not because they have been misled but for different reasons which we will get to later.

In response to these apprehensions the government has however resorted to doublespeak. On one hand the Prime Minister has maintained his stand that MSP will continue to operate and on the other hand Narendra Tomar, the Minister of Agriculture, has publicly refused to provide any formal assurance, although he backtracked later forced perhaps by the cabinet, raising more eyebrows. One reason why the political consciousness of the farmers should not be scrounged upon is because they are well aware that scrapping MSP is the natural next step towards further reforms. As NITI Aayog – the official policy think tank of the Indian government (previously, the Planning Commission) – pointed out back in 2015 in their paper titled ‘Rasing Agricultural Productivity and Making Farming Remunerative for Farmers’ that – “there is a need for reorientation of price policy if it is to serve the basic goal of remunerative prices for farmers. This goal cannot be achieved through procurement backed MSP since it is neither feasible nor desirable for the government to buy each commodity in each market in all region.” This is one of the reasons why the farmers protests that took place exactly one year ago, in fact on the same day – November 26th – put forward this primary demand to continue MSP after the provided remuneration had declined successively in the previous quarters. The protests did yield results and record MSP was provided by the government in the last Kharif season. However the government’s own estimates project that farmers suffered losses worth 1900 crore in the last two months alone. This is why MSP has been a central contention not just in the protests that are happening now but since as long as it was introduced back in 1965 to tackle acute domestic fo inod scarcity.

The Minimum Support Price or the MSP contrary to popular misconceptions is not set by the State government. It is the Central government that determines the MSP and regulates it before and during every cultivation season. However MSP is just one aspect of the system. It is rendered virtually useless without the procurement side of the mechanism. The government procures crops from the farmers at the APMC yards through the Food Corporation of India (FCI) for the public distribution system (PDS, or what we call ration shops in common parlance) Over the years, the FCI has reduced procurements as the PDS has been weakened and the number of beneficiaries reduced to ensure more profit to the private sector food grain traders. According to the FCI, 21,869 procurement centres for wheat in the Rabi crop season of 2020-21 and 64,515 procurement centres for rice in Kharif crop season of 2019-20, had operated all over India.

Now, APMCs do not have monopoly on procurement. In fact bulk of the transaction takes place outside the APMC. In Kalahandi, for instance, farmers have pledged their bulk produce till the year 2023 to Sahukars already because government’s procurement record is very poor and inconsistent. Except Punjab, Haryana, Andra Pradesh and some parts of Uttar Pradesh and Madhya Pradesh this is the overwhelming scenario across the country. Without guaranteed procurement in practice MSP holds absolutely zero value in terms of incentives. Take the example of former Deshmukh government in Maharashtra. They made a mockery of the procurement policy by declaring very high MSP which was not backed by procurement. In winter they used to declared high MSP for cotton but they delayed the opening of APMC centres late into the season and farmers in desperation to prevent their produce from waste & because they need money to buy food and survive themselves were forced to sell their crop to private agents for very low price. Over 300 MSP centres were promised during that time but less than 140 were actually setup and a fraction of that used to actually operate. These centres were closed before 20-25 days of the actual closing date channeling later arrivals to low price private procurers.

Also, there are major contentions regarding the method in which MSP is calculated. Rather than following the model proposed by Dr Swaminathan – in the Swaminathan Commission report – to provide MSP on the basis of C2 (cultivation costs that includes the imputed cost of capital and the rent on the land to give farmers 50% returns), the Modi regime, like his predecessor, has always calculated MSP on the basis of A2+FL (costs incurred by the farmer and the value of family labour), which, according to 2017-18 estimates was 53.73% less in the case of wheat and 57.52% less in the case of lentils. And like the UPA the Modi government has always denied to increase real MSP on C2 for the farmers and ignored requests from states on this. We have heard enough about how Sarad Pawar and Congress promised the same reforms but incidentally it was Mr. Modi himself who headed the working group of the Ministry of Consumer Affairs and he had submitted a report to the then Prime Minister Dr. Manmohan Singh in 2011 arguing that no transaction between farmers and traders should be allowed to occur at less than MSP. Modi had also pushed for setting up of fast track courts for settlement of farmer’s claims and disputes. But both these provisions have been conveniently left out of the Acts. In fact BJP had promised to implement the MSP mechanism suggested by the Swaminathan commission in their 2014 election manifesto but just 12 months after coming to power the government submitted an affidavit to the Supreme Court stating that the promise cannot be kept.

However, incentivsing farmers through MSP has its downsides. It has led to excess production and excess procurement of rice and wheat by the government over the years. As of September 2020, the Food Corporation of India had 700.27 lakh tonnes of rice and wheat. As per the stocking norms for food grains, FCI needs to have an operational and strategic reserve of 411.2 lakh tonnes as of July and 307.70 lakh tonnes as of October. It has also led to farmers growing rice and wheat at the cost of other agricultural crops. The NITI Aayog research paper referred to earlier points out: “Per capita intake and availability of pulses in the country has declined to two third since early 1960s. During the 50 years between 1964-65 and 2014-15, per capita production of pulses declined from 25 kg to 13.6 kg.” So it isn’t hard to guess the route India must opt for at this juncture.

We need to move away from rice and wheat and incentivise pulses and oilseeds instead. Doing so will not only save us millions of dollars annually by cutting import costs of cereals but it is also in tandem with India’s diplomatic posturing, especially with Malaysia, which is the largest oilseeds exporter to India, has tend to quite publicly side against India in issues concerning Indo-China tensions. Also as the procurement is channelised through the PDS, substitution of wheat and rice can enable the incorporation of cereals, pulses and even items that are not covered under the PDS until now, except in select few regions, like milk and other diary products. Here I’ll take the liberty to digress for while. A recent paper published by Raghunathan, Hedley and Herforth based on the National Sample Survey highlights the fissures in India’s Food Policy where 76% of rural India cannot afford nutritious diet. Post lockdown, the consumption of green vegetable has shrunk 73%. In this regard the Central government’s decision to substitute eggs with milk in the midday meal policy to ‘ensure quality control’ is atrocious given that the quality standards in milk can be much easily manipulated than eggs. And this has been brought in at a time when 63% of school children and 47% of anganwadi children are already receiving either dry ration or low cash transfer instead of midday meals.

And this brings us to the second bone of contention – the amendment to the Essential commodities Act, 1995 to subsection 1(A) in Section 3 of the principal act. This amendment (as explained in the very beginning) provides leeway to big corporates that are now set to assume the position of food processor, making them a player in retail marketing chain, etc, purchasing products from the farmers either through the “traders” or through the contract farming model. We will get back to contract farming in a while. Even under the previous Essential Commodities Act, there were no restriction on the farmers in relation to stock holding. What the new act does is remove the stock holding restrictions that was previously imposed on corporates and middlemen. Now the new contenders can now easily shore up the prices up to 49% for non-perishable agricultural foodstuffs or 99% of horticultural produce, as the provision itself allows, and also as they will control the lion’s share of the non-PDS supply, on which the majority of the masses are dependent due to the complications of the PDS, allowing them to easily squeeze out revuene. Simply put, the government can no longer interfere in the stocking and hoarding by unscrupulous corporate houses until there is a 100% price hike of horticulture products and 50% increase in the retail price of non-perishable agricultural foodstuffs “over the price prevailing immediately preceding twelve months, or average retail price of last five years, whichever is lower” (sic), as per the Gazette notification. This is a shot in the arm for the corporates keen to expand their profit margins by exploiting India’s food sector and jeopardising the right to food achieved through intense struggles. Rather than trengthening the PDS the government has introduced this provision citing India’s food sufficiency as excuse. How did the same government handle the excess reserves of 50 million tonnes? India slipped to 102 out of 117 countries in the world hunger index (below Pakistan and Bangladesh), during the pandemic 96% of migrant workers received no ration support from the government, 45% people in 11 cities across the country had to borrow money to feed themselves during the lockdown. More than 19 crore Indians are undernourished, more than 56 lakh Indian children (0-4 years) are in the “severe wasting” category with severely low weight to height ratio. A country where more than 3 lakh children die due to starvation every year. The government (instead of expanding the PDS to those agricultural products that are not procured by the government, such as fruits, vegetables as advised in some of NITI Aayog’s own reports) went ahead to sell large quantities of excess stock at highly subsidised rate to none other than China while they killed our soldiers at the border. One billion tonne of excess buffer stock lay unused but the cabinet passed an ordinance to convert FCI’s surplus rice stocks into ethanol to make sanitisers. Instead of feeding our own people the government chose to profiteer from the crisis.

This is not unprecedented however, In 2002 then Prime Minister Atal Bihari Vajpayee and Minister of Agriculture Shanta Kumar faced huge protest as Indian grains were exported as cattle feed to Europe at prices lower than what poor people in India were willing to pay, sparking major pushback against the government. There was a popular joke around that time that the cattle of Europe and USA are the most food secure creatres in the planet and the dream of the Indian farmer is to be born a European cow. Absence of ceiling brings back those uncertainties. Because even after having over 50 million tonne in excess we were unable to divert these supplies from government warehouses to proper channels, which is why the PDS machinery needs an overhaul and more Indians need to brought under its ambit. One Nation One Ration is a step towards that direction but the smokescreen of promises should not blur the fact that 63.3% of people in rural India cannot afford Cost of Recommended Diet (CoRD), as pointed out by Kalyani Raghunathan of the International Food Policy research institute.

Let’s get back to the issue of MSP. The incentives of big farmers of Punjab and Haryana are very strong. The reason I use the qualifier ‘big farmers' is because if MSP is done away and with private players coming into the market, prices are expected to fall even if in the short run. This is in theory but in practice prices have gone up in the long run but that concerns the second bill which we will get to later. On the other hand small farmers are far more susceptible to food inflation. But the reason farmers of Punjab and Haryana is concerned with procurement is because “95 percent paddy farmers in Punjab and about 70 percent farmers in Haryana are covered under procurement operations while in other major rice producing States like Uttar Pradesh (3.6%), West Bengal (7.3%) Odisha (20.6%) and Bihar (1.7%), very small number of rice farmers benefit from procurement operations”, according to Price Policy for Kharif Season 2020-21 report. In fact Punjabis themselves consume very less rice but they continue to grow it because procurement is assured. In a perfect world MSPs should no longer be continued by allowing farmers to take control of their own produce and revenue governed by market forces. But we don’t live in a perfect world and to turn this into a positive sum game for all players involved the government does not need to do away with either MSP or procurement but to divert MSP along with procurement to crops other than wheat and rice and promote diversification of produce.

But what feeds the farmers apprehension is that MSP has been declining steadily in the past few years. They also fear the lack of any MSP assurance in the procurement outside APMCs in the new Acts, which across the years has been dismal especially in areas where government procurement was efficient. Some estimates suggest that procurement in other states is 50% -60% less than in Punjab and Haryana. According to the “Evaluation Study on Efficacy of Minimum Support Price on Farmers”, published by the NITI Aayog in January 2016, only 10% farmers in India had prior knowledge regarding MSP of a crop at the sowing stage. In states like West Bengal, none of the surveyed farmers even sold their crop at MSP. Who benefits from cornering revenue produced by the shambolic APMC mechanism then? – The same feudal landlords and rich farmers. That is, those sections whose monopoly the new Act claims to challenge already benefits from the same unofficial provisions to which the bill grants legal legitimacy. For APMC was brought in to break the monopoly of sahukars, commission agents, traders and other third parties who cornerd stocks, hoarded them and later sold them at a very high price prompting even Nehru to once say that he wishes to hang these middlemen from the lamppost. So when Modi promises that MSP will survive, he is speaking the truth, but only partially. The MSP will continue to stay in the APMC yards but only the feudal landlords and rich farmers, that is the very 10% who already arm twist their way will benefit from the FCI’s purchases. The rest, especially the small and marginal farmers, will continue to be deprived of the MSP or even any price remotely close to it making them the most vulnerable to market volatilities.

However, in Punjab and Haryana government procurement and MSP has created its own set of problems. Continuous adoption of rice-wheat cropping system in North-Western plains of Punjab, Haryana and West Uttar Pradesh has resulted in depletion of ground water and deterioration of soil quality, posing a serious threat to its sustainability. It also leads to the problem of stubble burning during the winter and several alternative steps are now being adopted by the states to tackle the later. The pricing policy has also discriminated against eastern states where procurement at the MSP is minimal or non-existent. With part of the demand in these states satisfied by subsidised PDS sales of the grain procured in other states, prices of wheat and rice in these states end up below what they would be in the absence of price interventions of the government. The price policy has thus also created a regional bias in crop pattern as well as incomes of farmers.” The fact that inequality has gone on for years is disturbing. But this does not mean that the government should procure more rice and wheat from these states as well. Instead these states, along with Haryana and Punjab can be incentivised to shift their cultivation pattern to pulses and oilseeds. This must be especially carried out in Punjab because a semi-arid region with low ground water should not be cultivating rice and wheat in the first place. But the reason they continued to do so is because they are provided MSP on wheat and rice instead of oilseeds which is a perfect substitute especially in the case of Punjab.

It’s not just about the MSP. There are multiple problems with how the APMCs function. As noted in the 62nd Report by the Standing Committee on Agriculture (2018-19) that – market committees are dominated by politicians, traders and not by farmers. The provisions of the APMC Acts are not implemented in their true sense. For example, market fee and commission charges are legally to be levied on traders, however, same is collected from farmers by deducting the amount from farmers’ net proceed. Market fee is collected in some States even without actual trade-transaction has taken place and simply on landing the commodity at processing units. While in other States trade transaction outside the market yard is illegal. Besides APMCs restrict competition in a very fundamental sense. On the other hand APMCs helped provide a necessary safety cushion by incorporating rules that ensure price security with provisions like, if a trader does not pay the farmers within a specified time period, the trader can be suspended from trading. Traders also pay a commission to the Mandi Board, now this commission be hardly passed on to farmers in the form of higher prices if the APMCs cease to exist, moreover there will be new transaction costs that would arise for private players attempting direct procurement from farmers. It is also very much possible that such transaction costs may exceed the existing Mandi taxes, as it has already been the trend in some areas where the act has been amended. And this is precisely why non-regulated, non-APMC trade market flirts with the risk of being usurped by the same factions that currently plague the AMPCs. For an Act that claims to free the farmer from middlemen, the provisions of the ordinance does an incredibly shoddy job. For instance, look at subsection (n), Section 2 of Farmers Produce Trade and Commerce Bill, defines ‘trader’ as “a person who buys farmers’ produce” “on behalf of one or more persons for the purpose of wholesale trade, retail” . Such a “trader” will have the privilege to engage in the “inter-State trade or intra-State trade of scheduled farmers’ produce with a farmer or another trader” according to section 4(1). And, Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill defines an “aggregator” in section 10(i) as any person who acts as an “intermediary between a farmer or a group of farmers and a Sponsor.” It’s the intermediary who can enter into an agreement apart from the “Sponsor” or those who will invest in the crops upon certain terms and conditions. Thus, very provisions of the law changes the terminology of middlemen with legal jargons and instead of getting rid of third parties, the Acts formalise their legitimacy.

Because of the reasons stated above, minor reforms, and some major ones, in the APMC act has been already introduced for better or worse in 11 states, most notably in Maharashtra, Bihar and Madhya Pradesh. It is still premature to examine its success or failure in states like Madhya Pradesh and Uttar Pradesh, where it is in operation for less than six months. In Maharashtra, the reforms initially produced positive results with Maharashtra recording the best agricultural growth in the country. However the initial results whittled away gradually. In 2019 the state recorded bysmally low 0.4% agricultural growth. The state economic survey report revealed that state agriculture growth has consecutively declined over four years. In 2018, production of cereals went down 35% while pulses production declined by 6%. However, the crops under irrigated areas have shown a positive growth. Oilseed, cotton and sugar cane production has gone up by 16%, 17% and 10% in 2019 in the Kharip season. But rabi crop yeild declined by 50% and the area under cereals, pulses and oilseeds during the rabi sowing season decreased by 56%, 40% and 58% respectively. More than 53% population in the state which depends on agriculture is now struggling to survive and mostly relies on government subsidies. From 2017-19 13,000 crore have been spent on watershed management program, dubbed ‘Jalyukt Shivar’, but the groundwater table has not increased by an inch. This is not to suggest that AMPC reforms is solely responsible for worsening the state’s agriculture sector but the reforms failed to arrest the decline. Maharashtra has the precedence for the apprehensions of farmers from Punjab and Haryana. In August Chamber of Associations of Maharashtra Industry and Trade (CAMIT) has called for a strike to protest the State government’s failure to amend the APMC Act where AMPC traders were forced to pay cess whereas private players were exempted. A better alternative perhaps would have been to provide selling facility to the farmers outside APMCs and the state government should have ensured that even if the farmers are selling their crop outside the APMC yards then purchase tax and market fee is charged from the buyers. However such funds must be shown in the budget of the state and be used for the development works of the state to prevent misuse while creating a level playing field. Again, there’s no tangible evidence of any major private investment in the state even after Maharashtra did exactly what the new Acts seek to do along with an amendment in Maharashtra Agriculture Produce Marketing Act in 2018.

Take a different example. Kerala never had an APMC Act. But even that didn’t lead to any major inflow of private investment in spite of Kerala’s high value, export oriented crop pattern. The state government is now establishing rural markets across the state to help farmers. According to data from Ministry of Agriculture, as opposed to national average of 57.8% households declaring themselves agricultural, only 27.3% households did so in Kerala. And from those households over two third earn their livelihood from sources other than agriculture. Kerala earns less than 30% of its income from agriculture. What Kerala has in fact different, and better, than most other states is that they have developed successful models of cooperative societies that helps local farmers get fair price on their produce. The Bahmagiri Development Society (BDS) in Wayanad is one such example. BDS has developed a range of projects in collaboration with local Panchayats like watershed development, biogas plants, milk cooperatives, farmers markets, agro chemical products, provided training workshops and promoted crop diversification. Then there is Kudumbashree which United Nations described as one of the “greatest gender justice and poverty eradication programme in the world”. Kudumbashree oprates in Kerala’s agrarian space through Community Development Societies (CDS), Area Development Soceities (ADS) and it also mobilises women for lease land farming through Neighborhood Groups or NHGs which are grassroot level organisations. Thus cooperates help strengthen the bargaining capacity of farmers while negotiating with corporations. The cooperatives are of very radical sort, unlike ‘Khandan cooperatives’ in Maharashtra where 15000 members are under two rival familes. Out of 4.3 million people in Kudumbashree, many run garages and also participate in highway repair works. 70,000 collectives are in the agricultural sector today, most of which have registered consistent profits. The only setback they had has been in last two years because of climate change and devastating Kerala floods – something that the new Acts does not address along with the pertinent problem of small landholding – that is a major impediment in co-operative formation.

Let’s get to Bihar now, where APMCs were largely abolished in 2006. It is a model that has been much lauded in the backdrop of the ongoing protests and for good reasons. Bihar’s agricultural growth had been increasing even before the reforms and it has substantially increased ever since. In 2018 Bihar’s contribution to the national GDP surpassed that of the national average. On a side note, state figures do not effectively represent the macro trends, take West Bengal for instance. Bengal clocked the highest contribution to national GDP in 2019 surpassing all other states but there has been little development on ground. The reason I draw this comparison is because both Bengal and Bihar are largely dependent on agriculture. The framers of Bihar’s new agriculture policy had identified the incentives behind the abolision of APMC as a move that would improve private investment in agriculture, improve investment in cold storage and warehouses and free up the markets for farmers to trade their produce, in the process, bringing more remunerative prices for the crops. But how much of it translated on ground?

A 2019 report by the National Council of Applied Economics Research, which studied in detail, the impact of Bihar’s farm policies on ground. The report, authored by a team from NCAER amd ratified later by Niti Aayog, states that not only did prices of farm produce crash but unregulated middlemen and traders forced farmers to pay for their crops to be offloaded and sold. Like Maharashtra, Bihar also recorded steady short term gain. While the net income of farmers in Bihar rose from 2007 to 2010, it has been declining continuously since 2010. The reason for lower income of farmers is attributed to “continuous rise in cost of material inputs, higher wages and high cost of finance contributed to a rise in cost of cultivation.” despite the fact that land productivity produced higher growth. The reason why farmers have not been able to gain higher income as envisaged by the reforms even after high productivity, high yield and switching over to cash crops is because of market volatility. Prices of agricultural produce has fluctuated wildly during the period. While there was a variation of 11% in prices of paddy, before the repeal of the APMC Act in 2006, prices, though higher for paddy, changed much more i.e. by 27.7%. Instability in prices of agricultural produce also affects the farmers’ decision to allocate area under different crops and adopt improved cultivation practices. After the reforms were introduced in 2008, agriculture accelerated to 3.1% from 2008-09 to 2011-12. Subsequently, however, growth in agriculture fell to 1.3% between 2012-13 to 2016-17.

Bihar’s policy makers expected private investments to flow into the agriculture sector, resulting in better cold storage chains and warehousing facilities. They also relied on increased contract farming. However, this did not pan out as expected. The report notes : “On the contrary, the situation at the ground level has not improved. Market density remained low; in other words, a particular market serving a number of villages was very high. Further, the participation of government agencies in procurement and the scale of procurement of grains seems to be low. Farmers are left to the mercy of traders who unscrupulously fix a lower price for agricultural produce that they buy from farmers. Inadequate market facilities and institutional arrangements are responsible for low price realisation and instability in prices” The report explains what actually has transformed on the ground after abolishing APMCs – “Most farmers reported that their poor economic conditions and the need for immediate cash after harvest compel them to sell at a lower price to traders. Further, government market facilities are not available near the village. Even if farmers take their produce to a distant market yard, they face the problem of paying bribe to commission agents. Farmers also cannot store produce at their household due to lack of space and the necessary storage conditions to avoid spoilage of grains. Therefore, they are forced to sell at whatever the price the traders are willing to offer.”Although Bihar did retain the MSP for crops that would be procured by the state for its PDS, poor implementation of Primary Agriculture Cooperative Societies or PACS, turned into a nightmare for farmers. I already explained above how MSP is worth nothing without better procurement and the report also states that the procurement operation is limited to a certain amount and time, and these restrictions are considered to be highly arbitrary. In fact PACS do not procure wheat at a time, which otherwise it should, when there is a glut in the market and consequently farmers get lower price. Unfortunately, even at PACS, farmers reportedly received a price much lower than the MSP and payments are not made in time after selling their produce at PACS. Farmers mentioned that non-availability of a fair price is the most important constraint in expanding agricultural output. The change in procurement rule also had unusual side-effects. For instance, the permissible limit for moisture content in paddy is 17 per cent. Under the previous arrangement — when rice mills would buy the crop on behalf of the state government — either the crop was dried in the yards or sold with high moisture content with a price cut. With the direct procurement rule, government officials measure the moisture content level before approving the sale. Government inspectors often reject the crop saying it had 22 per cent moisture content. When asked deduct from the MSP for excess moisture they didn’t budge. Meanwhile, farmers don’t have any facility or space to dry the paddy or to keep the moisture in check.



The recommendations of the final report suggested – a) Low level of crop diversification is reason behind low growth (something that plagues Punjab), b) abolition of APMC Act in 2006 did not usher in private investment for creating new markets or strengthening facilities in the existing ones leading to low market density (something that Farm reforms 2020 claims it will achieve), c) The participation of government agencies in procurement and scale of procurement of grains continues to be low. Thus, farmers are left to the mercy of traders who unscrupulously fix lower price. And the solutions prescribed were – a) design incentive mechanisms such as tax concessions to attract private investment in the development of agricultural markets (this is a provision that the new Farm bills incorporate), b) government should step in to provide the necessary market infrastructure.

In this regard I would also like to address the dishonest comparison between Punjab and Bihar that popular media houses, namely Zee News, Times group, CNN News 18, India Today, The Print – have endorsed. They used NABARD’s All India Rural Financial Inclusion Survey 2016-17 (NAFIS), incomes per hectare in Bihar and Punjab were Rs 4,236 and Rs 3,448, respectively. However, the average monthly incomes per household in Bihar and Punjab were Rs 1,652 and Rs 12,481, respectively. According to their data this was a result of higher share of fruits and vegetables in the cropping pattern of Bihar, and that the new Acts will trigger same result in Punjab. But macro-aggregates of value of output (VOO) in 2016-17 published from the Central Statistics Office show that VOO from fruits and vegetables for all crops was higher in Bihar at 31% than in Punjab at 12% but, this did not translate to higher VOO per hectare in Bihar. VOO per hectare was Rs 1.84 lakh in Punjab, and Rs 1.27 lakh in Bihar. In simple words, despite a higher share of fruits and vegetables in the total VOO, Bihar did not record a correspondingly higher VOO per hectare than in Punjab. Take a different data source of you like, The 70th round of the Situation Assessment Survey (SAS) conducted by the National Sample Survey Office (NSSO) in 2012-13. It shows in 2012-13, the average monthly income from cultivation per agricultural household was Rs 1,715 in Bihar and Rs 10,862 in Punjab. But the value of output per hectare was Rs 35,825 in Bihar and Rs 78,652 in Punjab—i.e. the value of output per hectare in Punjab was more than double of that in Bihar. The media houses mentioned above took their data of average monthly income from cultivation from the NAFIS but average possessed landholding size data from the Agricultural Census, i.e two separate data sources were used for selecting two separe parameters for the same survey which is ethically questionable. Had they used the same source they would recorded that income per hectare was Rs 3,304 in Bihar and Rs 8,915 in Punjab – more than double.

That leaves us with the Act concerning contract farming. Before we address this, note that those protesting against the bills emphasise that a large corporate takeover of agriculture is on the cards. As per the Agricultural Census of 2015-16, the number of medium and large operational holdings is at 63.16 lakh. If just take a look at large operational holdings, they are at 8.31 lakh. Hence it is impossible for corporates to do anything without involving middleman, let alone ‘take over agriculture’. So those in favour of the bills are either misinformed or dishonest when they suggest that new laws would help get rid of middlemen. If businesses just concentrated on states which have a higher proportion of medium and large operational holdings they are looking at Punjab (33.21% of the total operational holdings), Rajasthan (19.47% of the total operational holdings) and Haryana (14.35%). Not surprisingly, farmers of Punjab and Haryana are most worried. They would rather deal with the known devil, the government, who, they can always vote out in the next election but no one can actually vote out a corporate. Section 3 of the act states that responsibility for compliance of any legal requirement shall be with the Sponsor or the farm service provider, as the case may be. Section 5 states that the price to be paid for the purchase is to be predetermined before entering into the agreement. Section 9 allows linking of produce with insurance or credit instrument under any scheme of the Central or State Government or any other financial service provider. So far so good right? Well, not quite.

This year, for maize, most farmers reported getting a price of ₹1,000-1,300 per quintal, as against the official minimum support price (MSP) of ₹1,850. For wheat too, farmers in Bihar reported receiving prices 10-15% lower than the MSP. Besides, wheat procurement in the state was only 5,000 tonnes, compared to 13 million tonnes in Madhya Pradesh, which has the same crop yield as Bihar, and 39 million tonnes nationally. Unlike Bihar, Madhya Pradesh did not abolish and instead strengthened its APMC infrastructure over the years. Before their abolition, Bihar had 95 market yards, of which 54 had infrastructure such as covered yards, godowns and administrative buildings, weighbridges, and processing as well as grading units. In 2004-05, the state agricultural board earned ₹60 crore through taxes and spent ₹52 crore, of which 31% was on developing infrastructure. With no revenue to maintain it, that infrastructure is now in a dilapidated condition. Also, no major private investment has come in. Bihar experiment has important lessons for future marketing reforms in agriculture. That benefits of these reforms will only accrue to farmers if they are accompanied by private investment in creating the physical infrastructure and institutional mechanisms and by only attempting to shift trade away from APMC to non-APMC areas, without a regulatory framework, the new law is unlikely to ensure better price realization.

There was nothing restricting the farmer even before the new act was passed to enter into contract with corporations. In fact, farmers already maintain contracts with several government registered private cooperatives like Amul, Hindustan Unilever, ITC and some non-government registered corporations like Pepsico to name a few. In 2013 the UPA government had started ‘Million Farmer Project’ in which corporations were brought in and 3,500 crore outright grant and another 4000 crore later was shelled out to those corporates. These corporations were to partner with farmers and train them. Ambani, Tata, ITC, Adani decided to train farmers in Tamil Nadu to grow ragi – something Tamil farmers have been doing since the last 200 years. The scheme was an astounding failure because even after receiving government incentives the corporations refused to invest in agro infrastructure. However, they have helped farmers stike better deals than mandis but that has been concentrated to large farmers primarily. So how does this bill take into account farmer’s interest? Previously farmers entered into contracts from a weaker no bargaining position. However this act does not seek to mitigate that. Instead it allows corporates to easily flout the contract and there is little the farmer can do to fight their might. From that standpoint this act further weakens the farmers by restricting them to seek judicial remedy by foreclosing the option of farmers to seek regress from civic courts by putting a bar on their jurisdiction. The only punitive measure is fine imposition which is trivial from the standpoint of big corporations. Article 13 of the new Act provides incredible immunity by mandating that No suit, prosecution or other legal proceedings shall lie against the central govt, or state govt or any officer of the central govt, or any officer of the state govt, or any other person in respect of anything which is done in “good faith” or intended to be done unde this act, a similar “good faith” provision operates in a new bill that seeks to protect people “acting in good faith to prevent cow slaughter”. The underlying assertion being that the State should be all powerful, even if it usurps its power by curtailing liberties of the citizens, as the State is benevolent and is capable pf no harm. Article 15 of the Act states that no civil court will have jurisdiction to entertain any suit of proceedings in respect of any matter of dispute. Remember this government tried doing something similar with Aadhar by moving all proceedings outside civic courts, but the move backfired and the government had to later backtrack. Article 19 further limits power of redressal and underlines that no civil court shall have any jurisdiction to entertain any suit of proceedings in respect of any dispute under this act. Basically farmers can no longer seek redress from any court as powers arrogated by the executive have been vested under a sub-divisional magistrate with limited powers.

As per the World Bank, it is only the large supermarket chains and agro-product processors or exporters who enter into contract farming with farmers. This makes the Indian farmers, disorganised and divided along class and caste lines, vulnerable. But this is a vulnerability that can be fixed with the right legal form and intent. Unfortunately the new Acts does little to address that. The corporates (called ‘sponsors’ in the Act) and their agents (called ‘aggregators’ or ‘service providers’) in section 10 of The Farmers Agreement of Price Assurance and Farm Services Bill, aren’t liable for the losses of the farmers. They will only pay for the crops that were agreed upon and unless there is an evoking of the force majeure clause, the farmers are bound to pay the actual losses to the sponsors or the service providers. Though section 15 prevents the corporates from seizing a farmer’s land to recover losses, there is no clause that prevents them from pressurising the farmer to sell the land and repay the dues.

The experience of previous contract farming in different states, especially with potato farming in West Bengal by PepsiCo, show that the farmers have been turned into labourers and their lands and crops remain under the strict control of the corporates, as record unemployment is ravaging the cities, it’s unlikely that they will absorb any surplus labour created by the villages. there will be more concentration of land in the hands of a few big feudal landlords, usurers and rich farmers corporates usually don’t favour small landholdings, or to deal with multiple stakeholders. But this does not mean that all previous experiences with corporate negotiations have been bad for the farmers. In West Bengal, most farmers prefer to enter into trade with PepsiCo because their variety of crop gives better yeild and return than government recommend Jyoti variety. However, farmers in Gujarat had to resort to strikes after the courts did not rule in their favour and it was only after political intervention that they could avoid losses after entering into contract with PepsiCo. Or take a look the major ruling of the Supreme Court in M/S Nandan Biomatrix Ltd vs S Ambika Devi, which appears to have missed public attention in the midst of the lockdown. Ambika Devi was a small farmer from Kerala owning about 1.5 acres of land. In 2004, she entered into an agreement with Nandan Biomatrix and its franchisee Herbz India for the sale of safed musli, a medicinal crop, at a predetermined price. The company was to buy back Ambika Devi’s produce at a minimum price of Rs 1,000 per kg. But it breached the contract. Ambika Devi complained to the Kerala State Consumer Disputes Redressal Commission in April 2008 under the Consumer Protection Act, 1986. The company argued that the complaint will not hold under the 1986 Act, as it was a commercial contract between two free agents. But the Commission ruled in April 2008 that the covenants entered into between the parties were in the nature of both sale of product and rendering of service, and would indeed fall under the ambit of the 1986 Act. The company took the matter to the Supreme Court. But the Supreme Court upheld Ambika Devi’s complaint, and ruled that “excluding such farmers from the purview of the 1986 Act would be a complete mockery of the object and purpose of the statute”. Thus, now, a farmer signing a contract farming contract is upheld as a “consumer” under the 1986 Act. This changes the picture completely. Does the bill take this ruling into consideration and factor in its full legal impact? Unfortunately no. And this is a major omission.

Infact, The National Commission for Farmers chaired by MS Swaminathan (yes, the same recommendatios that Modi wanted Manmohan Singh to ensure back in 2011) had discussed this issue in detail in 2006, and had noted three major impacts that a contract farming system may entail: “The first is that the purchaser is quite likely to be interested in short-term gains/profit maximization and may, therefore, suggest practices, which in the long run are not good for the land/other assets of the producer. The purchaser has the option of ‘moving on’ after a few years of ‘exploitation’ of an area. The second issue relates to possible shifts in favour of export-oriented crops at the cost of crops providing basic food. The third is the preference for the larger producers in choice of partners by the purchaser, ignoring the small landowners. Such practices over a long time could encourage the small farmers to enter into sub-agreements with the larger farmers thereby adding a tier between the grower and buyer or to sell/lease out their land and work as labourers.” point is not to ban contract farming. That is not the demand, and you also cannot stop a farmer from entering into a contract with a company. This is a free country. The point is that the interests of the farmers should be held supreme in contract farming arrangements. A suggestion is that the government should sign every such contract as a third party, so that the companies cannot withdraw unilaterally from contracts citing flimsy reasons, or incorporate exploitative clauses into such agreements. But the bill does not appreciate the need for such protective covers for farmers.

It’s not as if these concerns are newfound. There is nothing sui generis about the reforms. It is a case study in isomorphic mimicry where a model that previously failed in the Europe and US is being repackaged as an unique solution to a structural crisis. In US, in 2018, price of corn was lesser than even 1972’s price and both US and Europe are currently facing high inflation in food prices. The nations on average spend 400 billion dollars per annum to just sustain their farmers. That is equivalent to spending 6200 crore per day. Don’t trust me? Listen to Arun Jaitley explain why the same reforms failed in other nations (you can find the video in Rajya Sabha’s official archive on YouTube). Also, farmers simply do not trust corporations and for good reasons. Agricultural input like seeds, pesticides have seen large-scale corporatisation in the past decade, but this has been accompanied by a sharp rise in prices of intermediate inputs in agriculture. Data from the Ministry of Agriculture show that rising cost of intermediate goods has been the biggest factor behind stagnation and eventual decline in terms of trade for farmers. Given this experience, the suspicion towards growing footprint of big capital leading to a squeeze in earnings cannot be dismissed just as dogma. Farmers are often hard-pressed for resources against traders and end up selling their output when prices are lower. Thus replacing local traders with big capital will only increase this gap in bargaining power.

That’s all about the policy. But there’s more to the connundrum than what’s on paper.

A Reserve Bank of India study based on a survey of farmers and traders in 2018 found that more than 50% farmers found MSP to be the most beneficial scheme for farmers. This number was just around one-fifth for e-NAM (a pan-India trading portal) introduced by the Modi government. These are the government’s own data. So they were well aware that majority of farmers were unwilling to buy their promises long before this ordinance came into force. The section for which the legislation was being introduced felt apprehensive about its form. Perhaps this explains why the government had to rush these reforms during a pandemic by paralysing parliamentary proceedings. Let me remind you, that the new Acts were not introduced as ‘bills’ in the first place but as ordinances which became the law without any parliamentary discussion. When it was finally taken up for discussion after the parliament reamed normal proceeding this is what unfolded. The demand by opposition MPs to refer the bills to the select committee of the parliament was arbitrarily struck down by the speaker and eight opposing MPs were suspended. The NDA has ensured that travesty of parliamentary proceedings is no longer an aberration but an accepted practice. The stage had already been set with the government’s refusal to allow referral of previous bills like Constitution Amendment Bill abrogating Jammu and Kashmir’s special status, Bills concerning Citizenship Amendment, Triple Talaq, Unlawful Activities (Prevention) Bill (UAPA) and ordinance concerning labour law – to any of the committees of parliament for in-depth deliberation on a non-partisan basis by taking into account inputs from a variety of stakeholders. The statement of the agriculture minister – who piloted these Bills in the Rajya Sabha – that there was no need to refer these Bills to select committee of the House because these are “small Bills” sounds hollow because the government on one hand terms these bills insignificant and on the other they label it as as ‘landmark, revolutionary reforms’. The Bills were passed amid din with audio feed in Parliament being disrupted for nearly 20 minutes when the three contentious bills were debated that ensured that many MPs who were sitting in the Lok Sabha chamber as part of COVID-19 protocol could not hear the proceedings nor participate in the debate. Betrayal of procedure in Parliament is not just about technicalities. Even the Question Hour was suspended using the pandemic as an excuse. Even in taking that decision, the Speaker did not accede to the demand for a division. For argument’s sake lets consider NDA’s allegation that these processes “delays governance”. If that is true then this government should take steps to make the procedure time bound, however, that idea does not interest them because they want to continue using it as an instrument to sidestep legislation like previous governments have done in the past. But the third and most important is ‘division’. If a member of a House asks for a division of votes, the Speaker needs to grant it. The Speaker can refuse under some circumstances, but then he has to take something like an informal headcount vote before refusing division – even that course of proceeding was flouted blatantly. The intent is to reduce Parliament to a notice board and railroad legislation instead of admitting that reforms, however necessary, cannot be rammed through.

All procedures point towards an even more insidious agenda to override federalism. Nehru wanted to do it but Modi is exemplifying how it’s done. The simple point is that referring it to a committee could have at least allowed the exploration of other possibilities. It is also possible that in the case of the APMC, a more creative solution could have been found for concerns of the states, like an opt-out clause for them that could have hit the nail on its head. However this government wants to demonstrate that they can do pretty much anything with impunity and in the process reduce parliament to a notice board. One of the key point of contention in the new bills is that it takes away cess revenue from states and like GST, it is another step towards impoverisation of state treasury. However, allegations that state machinery was completely bypassed while reforming state machinery is also not true. The Punjab government had in fact rarified the draft bills and Kejriwal government had approved one of the three bills prior to their coming into effect. This is one of the factors behind Akali Dal leaving the NDA and their refusal to join hands with Congress either. The pushback against federalism comes at a time when it being universally acknowledged that decentralising executive and financial powers in favour of localisation helps in promoting more efficient governance, take Haryana, Chattisgarh, Telegana for instance where the results have been quite remarkable. Having said that, let’s assume that all existing doubts about the bills are mere allegations. How does the government address that? By resorting to the tactic of distortion instead of discussion.

Whenever the government is faced with a crisis its proxies in the news and social media work overtime to legitimise what is being done and pull off all sorts of tricks to square every circle. The fact that three lakh thirty thousand farmers committed suicide didn’t bother the media, neither the fact that not one session was dedicated in the Parliament in the last 16 years to discuss the findings of the Swaminathan commission. Instead they pulled all stops to paint the dissenting farmers as either ‘mislead’ or ‘misinformed’, the same overused labels that they had previously put on anti-CAA protesters, those protesting fee hike or Article 370 abrogation. Times Now, Republic and Aaj Tak accused the farmers of being vectors of Covid-19. Remember these are the same networks that covered the Bihar, West Bengal and Telengana polls without batting an eye about the possible implications of large political gatherings. Nor did they question why the Puri Rath yatra or ‘bhoomi pujan’ of Ram Mandir had to be performed during an active pandemic. Allegations are being levelled that Khalistans have taken over the protest. There have been some support for Khalistan movement, but it has been concentrated in circles outside India, especially in Canada. Khalistan was always the object of overseas Sikh chauvinism abetted by champions of multiculturalism in the West who have sought to disfigure Indian pluralism. But it’s ironic that the same bunch that celebrates the idea of a Hindu majoritarian state, publicly advocates for flouting instruments of state contract now has reservations against what is essentially the minority registering a reaction against the same principles that drives both responses. Some allegations like the issue is being needlessly politicised to cater to a certain vote bank is downright risible. The same government had publicly said before 2019 elections that corporates are their vote bank instead of interrogating why the Left caters to farmers interests or when the incumbent government ceded this space to the opposition and why. Again, the same bunch that celebrates the felicitation of mob lynchers and rapists to cater to vote bank politics is now concerned about why the opposition is catering to its own section.

In an archetypal example of 'Orwellian Newspeak’, India Today did a special coverage on the success story of farmers where the source of the unofficial report were not farmers but Union Minister Prakash Javedkar. Media outlets based their theory of protests being hijacked based on the involvement of Darshan Pal while conveniently being dishonest about the fact that it was the Home Minister Amit Shah himself who had called on him for a meeting thus allowing him to come to limelight after attending the Singhlu press conference. Some media houses even went to the extent of labelling this Modi’s 'Thatcher moment' – remember that the term is being used for a government whose minister of external affairs decries globalisation, a government that believes in protectionism and unlike Thatcher, Modi has created his own economic problems himself. What the 'godi media' should instead ponder upon is if everyone starting from farmers, students, minorities, public intellectuals and academics are either 'mislead' or ‘misinformed' shouldn’t they rethink before calling Modi a great orator the next time. And how does the government address this so called information deficit? By printing advertisements in English dailies and the Prime Minister going all the way to Kutch to speak to 245 farmers from Punjab and Haryana all the while refusing to go to the borders of Delhi to speak to thousands of dissenting farmers. Modi is busy convincing urban masses about issues that directly concerns farmers. This along with the refusal to hold Winter session of parliament to deliberately evade debate at all costs shows that this government cares zilch about dialogue. The government should not also forget that it is the same 'misinformed’ mass that voted for it and if they can be 'misled' this easily then it questions the very legitimacy of them being in power, beside a lot of other things.

The deceptive coverage helps the government evade all blame. Because what intensifies the agitation more than theories of conspiracy is the government’s own track record when it comes to agriculture. Take the much lauded Pradhan Mantri Fasal Bima Yojna for instance. Out of ₹1,400 crore earmarked annually for the north-eastern States under the Centre’s flagship Pradhan Mantri Fasal Bima Yojana, only ₹8 crore — or just over half a per cent — was actually spent. This is even after Arunachal, Mizoram, Nagaland and Nagaland are not yet covered under the scheme. Remember that several north eastern farm unions have extended support to farmers dissenting in the Delhi. The results are grim across other parts as well. Second year of the PMFBY, saw enrolment numbers fall sharply, taking the coverage to below 2015 levels. Against the target of 50% for 2018-’19, the coverage now stands at less than 26%. Over 320 core was found to be unlawfully held back that sparked the Sirsa Kisan agitation. PMFBY is in fact an excellent example of why farmers are unwilling to trust corporates. In Pharbani district, Maharashtra, 173 crore was paid to Reliance Insurance which was the company selected for the district under the PMFBY scheme as premium by the farmers along with contribution from the government for the soya bean crop. The entire crop was lost but the firm paid only Rs 30 crore as compensation and made a profit of Rs 143 crore on just one crop in one season, that too in one district. You will get the magnitude simply by multiplying it by 600, which is the number of districts in India. Adding to the woes is declining MSP that further adds to the fear. In the last six years every 12 minute and 13 second a farmer committed suicide in India and the government has stopped publishing farmer suicide data since 2016. On one hand the government is highlighting how they are 'freeing farmers' by allowing them to trade outside the state on the other hand, BJP-led governments in Madhya Pradesh and Haryana have announced that no farmer from other states will be allowed to trade in their state. What we have here is a protectionist government promising to liberalise agriculture that is being sold as a move towards ensuing more capitalism while consciously ignoring that agriculture is officially the largest private sector enterprise in the country that is being monopolised to cater to a select few. In this regard it is important to note the second segment of Abitabh Kant’s comment on “too much democracy” where he said “we want to support five companies who want to be global champions”. However, the hypocrisy trickles down right from cabinet ranks. In 2016, Radha Mohan Singh, then agriculture minister, said we never made the promise of implementing Swaminathan comission – a blatant lie. In 2017, govt hailed so called Shivraj Singh model in Madhya Pradesh at the same time when there was firing on farmers in Mandsaur. Six died and police were given clean chit. In 2018, Gadkari admitted that all promises made to win election can’t be fulfilled and in 2019 Jaitley said in the budget speech (para 13 and 14) that they fulfilled all promises in the Rabi crops – again, an outright lie. In 2020, Narendra Tomar, the current agriculture Minister, says this is the only government who have respected the Swaminathan commission. Thus the sequence of hypocrisy and doublespeak comes full circle.

The web of distortions, misrepresentations and outright lies derails attempts to deliberate about a possible way forward out of this mess. And I’m going to end this piece by explaining one last problem in words of the solution.

What policy framers rarely admit is that the crisis in agriculture is essentially a job crisis. In this regard it is important to remember Ambedkar who argued in 1918 that promoting industrialisation is the “soundest remedy for the agricultural problems of India.” Both Ambedkar and Nehru, along with VKRV Rao in 1938 assessed that getting surplus labour out of agriculture would not affect agricultural output but indeed help create surpluses in industry. Krishnamurty commission quotes the Famine Commission of 1880 noting that in large parts of the country, people are “greatly in excess for what is really required for the thorough cultivation of land” There were some improvements after the 1992 reforms and between 2003-2013, the proportion of households whose main income is from agriculture dropped from 63% to 58%. According to Neelkanth Mishra’s estimates India needs to get around 6 to 7 million people out of farming every year to make substantive change possible. The biggest impediment in this process has been the fact that the so called 'India growth story' is now history, even more so after the devastating economic impacts of demonetisation and an unplanned lockdown, to name a few. With an estimated 10 to 12 million people entering the workforce every year, India needs to create around 20 million non-agricultural jobs every year (to meet Mishra’s estimates) compared to the unconscionable 0.5 million jobs per year right now - which is in fact the lowest rate of job creation in 46 years.

When Modi took over what was clear is the fact that he is either an economic reformer dressed as a religious messiah or he is a religious messiah dressed as an economic reformer - as the Modi government nears seven years of its term, the Prime Minster seems increasingly intent upon exemplifying the latter. Indian economy is ruins, it is a laggard in South Asia with one of the highest rate of contraction among all major economies, behind even Bangladesh, Pakistan, Sri Lanka and Bhutan. Over 35 lakh people have been rendered jobless in November alone with the real income of 96% households experiencing a decline.



If there is one important lesson that the lockdown and migrant workers crisis have taught us it is that, in this country, no one is a farmer by choice but by compulsion and even today agriculture is the only safety net against job instability. This aspect of agriculture as a socio economic shock absorber is largely overlooked. Think of the reverse migration that India experienced after the imposition of the first lockdown. The only reason so many wage workers took such a risky decision to walk back home was because they trusted the agricultural sector to save their lives. And arguably it did. Another example to understand the importance of this is to look at South Africa, which has a similar group of poor and vulnerable people. But the agricultural sector in South Africa does not provide a social safety net to their vulnerable people. This is because agriculture in there is in the hand of a few large farm and plantation owners. The result of this lack of social safety net is very high crimee resulting in populist politics. So what does this mean for India and our agricultural policies? If agriculture becomes commercialized with the participation of large retail companies as their clients, then sooner or later, farms will also be forced to consolidate. There are two reasons for this. Large retail companies will prefer larger farms to cut their procurement costs. Farmers will be forced to increase their size to bargain effectively with these companies. There are many ways though which this change in average farm sizes can and will happen. This also means that over time, as more families move out of agriculture, the sector will lose its ability to provide a social safety net. So a vision for development of commercial agricultural, also needs planning for an alternative social safety net mechanism at a comparable scale. Otherwise, the next time there is a large economic shock - which by the way are not just products of pandemics - there will be an urban crisis in India that will be indeed very costly.







If you have made it till here then you must have noted that the discussion seems to move around in circles, where a solution to one problem breeds another equally pertinent problem that needs a different solution. And this brings us to the final contention that is at the root of this crisis - land holding - or, the lack of it. A country where 57% of the population is directly dependent on farming and farm produces; where 54.6% of families out of a total of approximately 146500000 houses that are directly associated with cultivation do not have any land for cultivation of their own. For any reform to succeed or to reduce the possibilities of adverse outcome of any reform, like the apprehensions regarding contract farming in this bill, it is important to reduce the number of small farmers, even though small farms are more productive than large farms. And that cannot be achieved without completing the unfinished agenda of land reforms. Till today, 86.2% of the agrarian workforce are small land holding farmers. The reason why even after 70 years of Independence the land holding is small is because of trend towards concentration of land holding. There are farmers without land but state governments and the central government themselve sit on gigantic land sizes that was seized under surplus ceiling but never distributed. Concentration of land holding is also dominated by major caste undercurrents - an aspect that most political parties are unwilling to address or acknowledge. Only four states saw some distribution of land - first state it took place was in fact Jammu and Kashmir under Sheikh Abdullah. Remember Kerala’s success with farm cooperatives (and why other states haven’t veen able to emulate that model) - it has to do with less feudal ownership of land in the state.

It didn’t happen overnight, neither did it happen with government intervention. Kerala could achieve that because it was the site of class revolt. Malabar movement in the 1920s after the Malabar famine incentived the Public Distribution System (PDS) that we have across the country today. After the second world war and Bengal famine India adopted the system of PDS that was pioneered by Kerala. This allowed sectors in Kerala to develop collective roots action like the Producers and Collective Cooperatives (PCCs). Kerala was the first state to undertake land reform but not from above like Abdullah did in Kashmir but from mass movements. In fact it set such 'bad example' for neighboring states that the then Congress government dismissed E.M.S. Namboodiripad. The reason Kerala can run efficient cooperatives to counter the impediments of land holding is because it is the most egalitarian state in the country right now, as reflected in Key Indication of Household Social Consumption In Education this year, published by Government of India. (The survey reflects the pathetic education penetration in the country. Karnataka, mother of the IT boom, has an average rural computer availability at just 2%. While Kerala, Tamil Nadu more egalitarian in economic sense and is way ahead of the curve). Even Andhra Pradesh’s community managed farming model has found some success after promoting agro-ecological principles with locally produced, sustainable inputs while focusing on soil health instead of depending on chemical fertilizers.

In that regard, any 'reform' that does not even mention, let alone address the issues relating to the land revenue and land ceiling act is a set of half-baked assurances at best. One must remember there are no rich or poor farmer but less worse off, as the 70th National Survey Report 2014-15 titled 'Situation Assesment in Farms' - found that average farm household monthly income from all sources is 6,426 rupees (85 dollars) for a family of 5 - so per capita less than 1,300 rupees. The reported identified small land holding as a key factor behind the crisis in farm income. The Dalit communities in Punjab, form 32% of the state’s farming sector but barely own 3% of the land. All land reform programmes taken by the States were cosmetic and didn’t attack the core of the feudal production relations but did some cosmetic reforms, which aided the rich farmers. Each state saw a different level of land reform and it didn’t help at all in increasing food production to remove the wage-commodity obstruction caused by low production, high food prices, which reigned in India until the mid-1960s. As a result, limited demand obstruction reigned in rural areas due to lack of income to be spent on industrial goods. Without hurting the feudal structure, without changing the land and production relations, Indira Gandhi’s Green Revolution helped in uplifting farming with the help of imported high-yield seeds, fertilisers, pesticides and agricultural machinery, including tractors at places with high irrigation facility, and she also managed to pour in liquidity for the rich peasants and feudal landlords so that they can expand their production. With the help of the state-sponsored mechanism, the states like Haryana and Punjab saw a rapid increase in their crop production but never attained income autonomy in the true sense. In five decades income disparity between the Indian farmers has grown manifold as the feudal landlords and rich farmers have consolidated the gains from increased productivity, while the small, marginal and middle-income farmers had to suffer a lot. Forget the pain and exploitation the large section of landless peasantry undergoes.

If the average monthly farm income of different States are seen, then one can see how the farmers from Haryana and Punjab have fared well vis-à-vis those from states like Andhra Pradesh and West Bengal–which had undertaken a remarkable land reform programme from 1978 onwards. Hence, there are going to be no benefits overnight even if the act lives up to its promises. For such small farmers to benefit from their produce there needs to a massive overhaul in infrastructure that includes everything from more cold storages to better roads connecting villages to new markets that come up and increased power supply that meet the increase in demand from new cold storages. The change in land usage norms also needs reforms where farmers should be allowed to sell their land without government intervention, which is incidentally how Robert Vadra made all that money.

There is also an absolute absence of discourse on climate change and its effect on the agrarian crisis. Water crisis is interlinked with wheat rice cultivation in Punjab, Haryana and Sugarcane in Maharashtra - one of the reason why MSP mechanism has to be transformed. A 2011 Economic and Political Weekly paper found that richer farmers in Punjab were a bigger reason for depletion of water tables as they sank deeper tube wells everywhere including in villages which were already facing ground water problems. Because resorting to environmentally harmful farming practices that promise monetary rewards in the short term. It must be acknowledged that almost half of India’s nearly 100 million farming families are in debt. Of these borrowings, almost 30% are said to be in debt to private moneylenders, although farmers’ lobby groups say the ratio is many times higher. Bank interest rates are high as well, especially for rural borrowers. At interest rates ranging 13-14% for a crop loan, it is cheaper to purchase a small car than to purchase seeds. Even these loans are not provided without bribing bank officials. And predatory lenders are only part of the problem. Health care and education costs have risen dramatically in the past few years, while income has slumped.There is also the need to promote and strengthen farmer producer organisations (FPOs) and to move from the stage of “notional FPOs” to “functional FPOs”. Further, FPOs should be provided with adequate initial financial support for their successful operation and to expand the coverage of institutional credit through strengthening of primary agriculture credit societies (PACS) [as noted in a NITI Aayog’s past recommendations] but it finds no mention in the new bills.

In conclusion, the farm protests is the product of manifestation of underlying structural problems and knee-jerk reactions or isolated policy measures, are not going to take us anywhere nor resolve the crisis in Indian farming or even the problems of these particular farmers. This needs a much more holistic and comprehensive policy response, more attention to irrigation (both surface and groundwater), more funding of agricultural research oriented to current concerns, better and more comprehensive extension services to enable all farmers to make use of available technologies properly. Instead what the government and its proxies have resorted to is incite sectarian passions to eclipse economic failure, along the lines of what Milosevic told the Serbs after destroying Yugoslavia, "If we do not know how to run an economy, at least we know how to fight."

These protests are a call to action provoked by existential anxieties. There is a sense that if the government can get away with promulgating such significant legislation without adequate consultation with farmers, it will sound the death knell of farmers as a political force for the central government draws a lot of its political capital from being able to show that it could not care a damn. Even the state governments have been unwilling to intervene and are more than relieved to allow the central government to carry the can. Adding to this, it has become more and more difficult to protest in public spaces because of arguments that the public will be inconvenienced. This is a country where Supreme Court creates 'designated places of dissent’, something that even the imperial regime didn’t do. In this case even this supervised dissent was not allowed with tear gases, water canons, barricades and even trenches being dug at the national highway to prevent farmers from entering the capital. And it became all about breaking that documented boundary of designated dissent instead of channelising and limiting it in spaces where the powerful and the privileged don’t have to feel the discomfort. Adding to this is the gradual shift in political narrative and the increasing appeal of tribalism that immediately takes the attention away from domestic concerns. Brighter the hallow around the 'jawan' grows, larger the shadow over 'kisan' looms to the extent that agriculture has been confined to a state issue with little takers during the general elections. Contrast 2019 with 2014. Unlike Modi’s assuming power moment, 2019 packed little in terms of both promises as well as electoral importance to farmers. The base is shifting, farmers are aware that they are losing their political capital and thus the need to go all out in the face of foreboding. This might as well be a last ditch attempt by farmers to resist peripheralization and reassert their political identity, an attempt in which they represent the Indian working class. And if they lose they will be marginalised for decades.

— written by, Souvik Roy Moulick.

(I Tweet at @SouvikRM10, you can mail me at souvikroymoulick009@gmail.com)