The farmers’ protests completed six months on May 26, 2021. The genesis of these laws can be traced to the Niti Aayog Agri Market Reform Study and Index which envisaged reform in agriculture marketing. These reforms were aimed at promoting a healthy trade ecosystem, competition, efficient and transparent transactions, removal of regulatory restrictions and market modernisation. However, the present laws are bereft of any monitoring authority and the government has left small and marginal farmers to fend for themselves, writes DR. SILPA AZIZ.
AS the farmers’ protests against the farm laws of 2020 completed six months on May 26, 2021, let us trace the trail of these laws and their basis.
The government made a systematic and consistent approach in bringing about these laws. While Niti Aayog’s agri market reform study of 2015-16 seems to be the primary reference point for the laws, it falls short of meeting certain basic research criteria –crediting the right sources for the data and consequent parameters. This has reduced the lustre of the latter exercises wherein various government documents (such as the Economic Survey 2018-19) have either developed or quoted the Niti Aayog study in connection with reforms and the new farm laws.
There are certain pointers regarding the farm enactments, the most significant of which is the absence of a monitoring authority.
In a country with 86% of farmers being small and marginal ones, the government cannot abdicate its role in the farm eco-legal framework, leaving them to deal with private players.
Six Months Too Long
Even as the apex court-appointed committee is to come out with its recommendations after hearing various stakeholders, the farmers’ protests complete six months. The legislative exercise which the centre claims to have carried out in favour of the farm sector has not only been questioned for its constitutionality, but also for the hurry with which it was enacted.
The laws were announced by the finance minister as part of Covid relief package for businesses. But these laws hardly had any impact on farmers in terms of immediate relief.
The fundamental exercise of a parliamentary debate in enacting a law was bypassed. There was criticism about the timing of the enactment, lack of discussion/debate (which meant subversion of a very essential parliamentary procedure), the haste in issuing the ordinance during the pandemic and passing such an important bill with a voice vote on the floor of the House. The trail revealed that the government was moving towards these enactments and waiting for an opportune time to roll them out.
The National Institute for Transforming India (NITI Aayog), the premier policy think tank of the government of India in 2015-2016 brought out a study titled “Agricultural Marketing and Farmer Friendly Reforms Across Indian States and UTs”. It listed contract farming, direct sale by producers to processing industries/exporters/bulk buyers and removing fruits and vegetables from the APMC ambit to other alternative markets. This provided producers the right to sell to anyone they choose — integrator, village cooperative or APMC mandis, private mandis, etc.–as critical areas for agriculture reforms.
And the government seems to have paid heed to NITI Aayog. The farm laws–Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, Farmers (Empowerment and Protection) Agreement on Price and Farm Service Act, 2020–resonate with the market reform measures listed in the study.
One of the three primary measures envisaged in the study was the reform of the system of agriculture marketing. Based on information on state and Union Territory initiatives collected from ministries, the study listed indicators relevant to agri market reforms against states where a majority of APMC markets existed.
These reforms, the study provides, were aimed at promoting a healthy trade ecosystem, competition, efficient and transparent transactions, removal of regulatory restrictions with an adverse effect on producers, market modernisation, etc.
The emergence of the present farm laws can be traced to the Niti Aayog Agrimarket Reform Study and Index (Agri Market Farmer Friendly Reforms Index-AMFRI) of 2015-16, the Ashok Dalwai Committee’s Model Act of State Agricultural Produce and Livestock Marketing Act,2017 and the Economic Survey of 2018-19 (Vol. II P182).
The formation of Farmer Producer Organisations (FPOs), which actually started in 2012-13, suddenly gained momentum on February 29, 2020, when the ministry announced the launch of a centre sector scheme “For the Launch and Promotion of FPOs”. The finance minister in the 2020-21 Budget Speech announced the Krishi Rail and Kirshi Udaan in Public Private Partnership (PPP) mode, where trains and flights would allow farmers access to faraway markets that were supposed to make them competitive and improve value realisation.
The Standing Committee Report of the Agriculture Committee (2019-20) tabled in Parliament has discussed the efforts made by the government in engaging with states for reforms in the APMC Act. The lukewarm response of states found specific mention by the Committee even as it noted the move partially by Punjab and fully by UP, Chhattisgarh, etc., to adopt the new Model Act of Agricultural Promotion and Livestock Marketing Act, 2017. This was intended to create a single market at the state/UT level, single trading license, democratisation of market committees, etc., all of which reflect the crux and context of the provisions of the new farm laws.
Niti Aayog’s study on agri marketing and AMFRI Index was part of the Economic Survey of 2018-19, but does not provide a clear statistical source to the figures used. A better approach would have been to authenticate the source and research methodology adopted.
It is clear that marketing boards and committees in established mandis will be deprived of revenue in a scenario where farmers move towards other market opportunities. However, going by the Niti Aayog study, 20 states have already set up private markets, 21 states are involved in direct marketing of produce to buyers, 16 states have set up farmer-consumer markets, 21 have contract farming, 18 have fixed single point of market levy, 15 allow single market trader license, 16 have farmers involved in e-trading of produce and 11 joined the e-nam platform markets.
Punjab has already moved partially to set up private market yards. It is also true that Punjab and Haryana have the best-established APMC markets. In such a situation, the government could have explored a transition scheme for the two states or any others wanting to opt for a framework specifying APMC market development threshold/parameter. Of course, now the Supreme Court-appointed committee report will provide an updated view based on stakeholder consultations.
Absence of Monitoring Authority
While the Farmer Producers Trade and Commerce Act draws heavily from the Model APLM Act, 2017, the present law stands bereft of any form of monitoring authority. Such an authority would have fixed the responsibility of decision-making pertinent to the overall market functioning.
It might be true that the APMC Act and its administrative paraphernalia had failed. However, that cannot become a reason for the government to abdicate its role in an agri-market eco-legal framework.
Globally, governments mark their presence in legal frameworks involving the farmer community to ensure intervention at the right juncture.
In a country where 86% of farmers belong to the small and marginal segment, leaving them to deal with a “sponsor” is perilous.
The absence of a monitoring authority is alarming considering that Section 4 (1) says that a trader requires nothing more than a PAN card to engage in trade with the farmer. Verification of the person by small farmers is impossible. There are more provisions that demand scrutiny.
State Cannot Abdicate
The moot point is: We are not yet there. A scenario where the government hands over the reins to market forces leaving bare minimum provisions as a dispute resolution mechanism to the farmer is not acceptable. In an agrarian economy like India, the State cannot abdicate its responsibilities.
Elberi and Sarris (2009) reminds us of a decade-old observation of the “Washington consensus” where governments were advised by the IMF and World Bank to get out of agriculture and replace it with the private sector. This was something many developing countries were wary of. India cannot afford to be an exception. Hope rides on the apex court’s final decision.
The article was originally published in The Leaflet.
(Dr. Silpa Aziz is a practising advocate in the Kerala High Court and Delhi NCR. Views expressed are personal.)