ISSUE There have been farmers’ protests going on in Punjab, Haryana and around the region of Delhi. Opinion of the general public on the support to the movement is divided.
BACKGROUND Government brought three agriculture farm bills which are aimed at bringing reform in agriculture marketing. The bill allows the farmers to sell their produce outside the mandis. Government believes that the step will reduce transportation cost and hence better remuneration for farmers as they will be able to sell their produce at the MSP. Farmers are apprehensive that privatization of the farm sector will bring corporatization in the agriculture sector and will end MSP.
While both Government and farmers may be right in their own belief, truths and half-truths of both Government and farmers need to know, so that constructive dialogue may be arrived between the parties.
- Protestors of Punjab and Haryana have benefited most by leveraging APMC and MSP provisions, which were put in place some 50 years to attract farmers to the Green revolution. 45% of the marketable surplus of wheat and rice is provided by farmers of the Punjab and Haryana.
- Due to neglect of the APMCs and MSP outside Punjab and Haryana, the MSP has been identified with wheat and rice and MSP of other crops has been neglected.
- The “arhtiyas” (mandi middleman) though seen as villains by farmers of Punjab and Haryana are lifeline of the agri-markets. Arhtiyas, which today are Jat Sikhs and are substantial farmers, help in weighing, grading and sorting grain, fertilizer and pesticide agents, money lenders, general knowledge providers.
- APMC mandi fee or cess levied by the state is used primarily to make better roads and storage facilities.
- Contract farming has not been completely successful. Big contractors either renege on their commitment to small farmers or beat down the price or refuse to buy the produce. Second, if they give their lands to them then they may not get them back for no contractor will invest in land if the contract is just for a year and is renewable annually. The anti-zamindari policy of land to the tiller might now work against the interest of farmers if they are not the actual tillers for an extended period.
- Demand of farmers for MSP as law is unfair as MSP was never a law but a policy.
- Like other produce, agricultural produce needs to obey market price fluctuations.
- Contract farming may free small farmers from their tiny plot allowing farmers to move out of villages and seek jobs elsewhere.
- Farmers get huge subsidies from the state to the tune of 2-2.5% of GDP which is higher than subsidies farmers receive in the USA, EU, Latin America or Japan. (Subsidies: India:$ 40-45 billion, USA: $ 20 billion, EU: $ 39 billion, Japan: $ 46 billion)
Half-truths of protesters
- Farmers’ demand for MSP as law is not really a roll back to the new agriculture bill but it is to bring a fresh one that makes MSP a law.
- Farmers resented for not being able to sell their produce in International markets when international prices are higher than domestic prices for example in case of Onion and sugars.
Half-truth of government
- Though Contract farming releases farmers from their uneconomical landholdings, issues exist such as selling their produce and when they want their lands back from the contractors.
- Small farmers don’t go to mandis because of high transportation costs as there are few APMCs mandis.
- Total farm subsidy may be higher but per capita subsidy to farmers in India is low. (Per capita subsidy: India: $ 48, USA: $ 7000). This is problematic as 85% of farmers in India are small and marginal farmers and social cover for health, education and unemployment is poor.
- MSP does not apply to only wheat and rice, but to 22 crops in all. It is active for only wheat and rice because strong farmers lobby in the northwest whose main crop is wheat and rice.
- Ecological crises like depletion of the ground water due to thirsty crops like rice in Punjab and Haryana can be ended by ways like crop diversification as recommended by S.S. Johl committee rather than just focusing on just letting mandis and AMPC go.
As both versions of government and farmers have their truth and anti-truth, a comprehensive dialogue between the stakeholders is needed to remove anti-truth of both sides.
It is true that subsidy is undesirable considering market ethos, and when a particular subsidy is withdrawn the population that was served by it will protest. Subsidy is bad, but only for other people not for one benefiting from subsidy.
But it is equally true that everybody, not only farmers ranging from Central government employees, ministers, prisoners, poor children, armed forces and businessmen (through “revenues foregone”) benefits from subsidies. Hence the need of the hour is a common meeting ground between government and farmers.