Farmers in Punjab are worried concerning the implications of the three new farm payments that can permit them to promote their produce immediately to non-public gamers. Vikas Vasudeva studies on the considerations of farmers, commission agents and workers regardless of the federal government’s assurances that the laws empowers them
In June 2020, 55-year-old Shingara Singh in Fatehpur village in Patiala, Punjab, bought his spring season maize crop at ₹700-₹800 per quintal, far beneath the Minimum Support Price (MSP) of ₹1,850/q fastened by the Central authorities for the season’s crop. He says personal merchants purchase the produce at a a lot cheaper price than the MSP.
In the upcoming Rabi (winter) season, Shingara is hoping to get a remunerative value for his wheat crop. In Punjab and Haryana, the Central authorities purchases wheat and paddy (rice) on the MSP, which provides farmers an assured market and return. But Shingara is worried that following the passage of the farm payments in Parliament final week, even wheat and paddy will face the identical destiny that crops that aren’t bought by the federal government companies of the State or the Centre face.
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The Central authorities says the three payments — the Essential Commodities (Amendment) Bill, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill — are geared toward remodeling agriculture within the nation and elevating farmers’ revenue. The provisions of the payments, it says, will allow barrier-free commerce in agricultural produce and empower farmers to interact with buyers of their alternative.
‘I can’t belief personal gamers’
But farmers will not be satisfied by the federal government’s guarantees. In each Punjab and Haryana, farmers are up in arms towards the three farm payments. They concern that they’re a step in direction of abolition of the MSP regime, leaving farmers to undergo potential exploitation by the hands of large company homes. And the concern just isn’t restricted to anyone group of farmers; it’s shared by marginal, small and giant/ different farmers. While marginal farmers (these cultivating as much as two and a half acres of land) and small farmers (these cultivating as much as 5 acres) concern that they are going to be utterly pushed out of agriculture, giant farmers (cultivating over 5 acres) really feel they are able to trip it out for a number of years, however will ultimately discover it troublesome to face as much as multinational firms and large merchants.
Shingara is cautious of coping with personal corporations. His concern is rooted in his expertise of buying and selling with an organization. He began sowing barley crop round eight years in the past after a liquor manufacturing firm close to his village provided to purchase his crop. “The company makes beer. People from the company came to our village and wanted us farmers to cultivate barley. They said the company would purchase our produce at a higher price than the MSP. Initially, for two-three years, they did pay us ₹400 above the MSP. But later, when several farmers started sowing the crop and supply increased, they were reluctant to buy the produce at that assured price. On the pretext of quality, they either rejected the produce or paid us a lower price. After 2015-16, I stopped cultivating barley,” he says.
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Dilbag Singh, 44, one other farmer from the identical village, who has over 15 acres of household land, speaks of the same expertise that left him poorer. “A local pea processing industry asked me to plant green peas. In 2012, representatives of the company approached me and said they would pay ₹8.5 per kg. They prepared some documents as well. I planted the crop. When the crop was ready, I took a tractor trolley with around 100 bags (50 kg each) of produce to their unit, but they were unwilling to buy my crop citing poor quality. It was only after the intervention of local farmer outfits that they purchased my crop. Later, I sold the rest of my crop that I had sown in five acres of land at ₹2-₹3 per kg in the local mandi (market place). I had to bear heavy lossses,” he says. “I can’t trust them anymore.”
The story isn’t any completely different in different elements of the State. In Tibba Tapprian village in Rupnagar district, Dharmpal Singh, who owns shut to a few acres of land, says he bought 25 quintals of maize crop at ₹800/q on the Balachaur mandi a number of days in the past. “The government announces the MSP, but what’s the use if I have to sell my crop below the MSP? Government agencies should buy farmers’ produce at the MSP or make it legally mandatory for private traders to purchase crop at the MSP,” says the 56-year-old.
A senior authorities official factors out that the federal government didn’t intervene as maize just isn’t distributed underneath the Public Distribution System (PDS). “Government purchases only those crops that are distributed under the PDS. Maize is not among those crops,” says Gurvinder Singh, Joint Director at Punjab’s Agriculture Department.
Surjit Singh, 65, fears that mandis underneath the Agricultural Produce Market Committee (APMC) will regularly vanish if personal commerce is allowed with none authorities regulation. “Trade within the mandi through the arthiya (commission agent) is taxable, which includes rural development fee, market fee and the commission of the agent. But after these bills, no taxes will be levied on trade outside the regulated mandis,” he says. “That means private traders and companies can offer a higher price to farmers as they won’t have to pay tax. Once they start offering a better price to farmers than what is offered in the mandis, it is but natural that farmers will be inclined to sell their produce to them. And over time, with trade outside the mandis growing, the mandis will eventually disappear. As I stand against the new bills, I have decided I’ll sell my crop of Basmati rice only through the mandi. But for how long will I be able to do this? I can negotiate with private traders or companies to some extent because I have better resources than the small and marginal farmers (he owns over 25 acres of land in Patiala’s Lachkani village). Yet, against the big corporate houses, it will be a losing battle,” he says.
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A robust, age-old bond
While the federal government says farmers can now commerce anyplace, Gurmukh Singh, 47, asks how that can be potential as they can’t afford the hefty transport prices. Gurmukh is a small farmer with round 4 acres of household land in Lachkani village. He has sown paddy in his discipline. With hardly any sources to retailer or transport his produce, he’s extraordinarily worried. “Once I harvest my crop, I sell it at the local mandi. Even if I get a higher price from private traders in some faraway place, it won’t be easy for me take my produce there. I do not have the capacity or resources to trade my crop at distant places. So, even if the bills promise us the freedom to sell anywhere, it seems a distant dream in practice,” he says.
“Moreover”, he provides, “I can’t leave my commission agent for private traders. The relation with my arthiya goes back generations. Whenever I am in need, I get money from him. He pays me in advance for the crop that is to be harvested. Such a relationship based on trust will be difficult to establish with private traders or companies.”
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In Patiala’s Ranbirpura village, Avtar Singh, who owns two and a half acres of land, is equally grateful to his commission agent. “I have already taken an advance of ₹1 lakh from him for the paddy crop that I had planted this season. It would have been next to impossible for me to cultivate my farm if my arthiya had not given me the advance. He gave me an advance only because he is assured that my paddy crop, which I’ll sell through him, will be purchased by government agencies at the MSP. If the government stops purchasing paddy or wheat at the MSP, I don’t think I’ll be able to cultivate any crop on the farm. No one will give me an advance or offer any financial help without a tangible guarantee,” he says.
Avtar fears that after the parallel personal market begins functioning outdoors the regulated market, there’ll ultimately be no MSP in that market. “The government should come out with another bill making MSP a statutory right of the farmers,” he says.
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Commission agents and labourers working in grain markets have their very own considerations concerning the new payments. “The government has announced the MSP for several crops but it is only for wheat and paddy that farmers actually get the MSP. And that’s because the government buys it. For instance, this year, government agencies purchased wheat at an MSP of ₹1,925/q during the official procurement. But now, after government purchase, the wheat is being bought by private traders at ₹1,600/q-₹1,650/q in the mandi here. The government, it seems, wants to remove us from the market,” says Mulk Raj Gupta, president, Arthiya Association, Patiala new grain market. “But they possibly don’t realise how many people are generating employment in this entire chain, be it labourers, staff at shops, employees of market committees or others,” he says.
In the grain market, Badri Mukhiya, 45, who hails from Bihar, ropes in labourers from his State. He says he has been coming to Punjab since 1990, however is now worried after listening to that work on the mandi might scale back. Work contains loading and unloading of produce and cleansing of grain. “If farmers stop coming to the mandi altogether or even if fewer farmers come, there will be less work. The livelihood of at least 20 people and their families who are associated with me is dependent on the work we do here. We earn around ₹400 a day, but we will have to return to our native place if there’s no work. Everyone is worried,” he says.
Concerns and responses
Agricultural specialists have expressed their reservations concerning the payments as effectively. Lakhwinder Singh, Professor of Economics and Coordinator on the Centre for Development Economics and Innovation Studies at Punjabi University, Patiala, has been mapping rural Punjab for many years. He says these payments have generated rather a lot of suspicion as they had been handed by way of the ordinance route. “The new bills state that the foodgrain trade will be in the hands of private traders. But no safeguards have been enacted. The majority of farmers in India are small and marginal farmers. They usually wait for the crop to be harvested in order to fulfil their basic needs. They don’t have the capacity to trade the food at distant places. Therefore, the claim that farmers will have the freedom to sell does not hold true. Giving private players the freedom of foodgrain trade without any regulation will eventually lead to the emergence of monopolies, oligopolies or a cartel system,” he says.
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Noted economist and professor on the Ludhiana-based Punjab Agricultural University, Sukhpal Singh, factors out that 86% of Indian farmers have lower than 5 acres of land, and 67% of farmers have lower than two and a half acres of land. “These are the victims of the grave economic crisis. How can these small farmers sell their produce in other markets? What is the purpose of new markets if small farmers cannot participate in them? How will the new private markets operate? These new markets will not have any regulation and they won’t be taxed by the State government. State governments will regulate only the already running markets. In Punjab, for instance, these markets levy 8.5% tax, including 3% market fee, 3% rural development fund, and 2.5% commission of the commission agents. Thus this year, the tax is around ₹155/q on paddy and about ₹164/q on wheat. This means that due to non-tax on private purchase, the purchase of paddy and wheat will be cheaper for private buyers to the extent of ₹155-₹164/q. Initially, even if private markets offer farmers ₹55/q-₹64/q on paddy and wheat purchases, they (private traders) would still get a profit of ₹100/q. Government procurement will be affected as farmers will be inclined towards private markets. As the volume of purchase increases in the new system, the government will reduce its purchase target. Gradually, government procurement will be negated. In such a situation, the prices of crops in private markets will be reduced,” he says.
In response to all these considerations, Prime Minister Narendra Modi mentioned in a sequence of tweets in English, Hindi and Punjabi that MSP will proceed. “Government procurement will continue. We are here to serve our farmers. We will do everything possible to support them and ensure a better life for their coming generations,” he tweeted. He added the federal government was bringing in these provisions as middlemen have been bullying farmers for years.
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Union Agriculture and Farmers Welfare Minister Narendra Singh Tomar has additionally tried to allay fears. He mentioned the APMC system will proceed. Alleging that the Opposition was attempting to mislead the nation, Tomar mentioned, “Farmers, so far, were forced to sell their produce in mandis. In Punjab there’s 8.5% tax in the mandis on several items. Now, through these bills, the farmers will be able to sell their produce even outside the ambit of the mandi.”
The distance between merchants and farmers will scale back now, Tomar informed Parliament. “If a trader will visit a village, farmers of that village will assemble at one place to sell their produce. [The] trader will fix the rate of purchase after discussing with farmers. The trader will purchase the produce and take that away in a truck. Farmers will not have to go anywhere to sell their produce,” he mentioned.
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Playing politics over the payments
Despite the federal government’s assurances, considerations persist, and not solely among the many Opposition events. After initially supporting the ordinances pushed by the National Democratic Alliance authorities, Shiromani Akali Dal, an previous alliance accomplice of the Bharatiya Janata Party, determined to take a U-turn on the problem. The Akali Dal’s lone consultant within the Union Cabinet, Harsimrat Kaur Badal, give up the Cabinet in protest towards the payments. In her resignation letter to the Prime Minister, Badal wrote, “In view of the decision of the Government of India to go ahead with the Bill on the issue of marketing of agricultural produce without addressing and removing the apprehensions of the farmers and the decision of my party, Shiromani Akali Dal not to be a part of anything that goes against the interests of the farmers, I find it impossible to continue to perform my duties as a minister in the Union Council of Ministers.”
The Akali Dal has additionally accused the Congress authorities in Punjab of “double speak” on the problem. The Congress authorities in 2017 amended the State APMC Act after coming to energy in Punjab to incorporate provisions much like these within the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, the Akali Dal claimed. According to the State Act, commerce might be performed solely after acquiring a licence from the federal government in its mandis underneath the Punjab Mandi Board or the personal mandis. However, in response to the Centre’s new farm payments, no licence from the State authorities is required; any PAN card holder can have interaction in commerce. Besides, no personal or authorities mandi is required for commerce underneath the brand new farm payments. Trade might be performed outdoors the bodily premises of markets or deemed markets notified underneath varied State agricultural produce market legal guidelines.
The ruling Congress get together, alternatively, accused the Akali Dal of deceptive folks on the farm payments and requested the get together to half methods with the NDA. Chief Minister Amarinder Singh mentioned that the Akali Dal’s claims of standing shoulder to shoulder with the farmers are hole so long as it stays an element of the Central authorities.
In neighbouring Haryana, Deputy Chief Minister Dushyant Chautala, whose Jannayak Janta Party is an element of the coalition authorities with the BJP, has made it clear that whereas there’s no point out of casting off the MSP within the farm payments, he’ll give up if the MSP is certainly discontinued. That leaves a query mark on the alliance.
While events spar with each other, farmers are involved concerning the current. On September 25 afternoon, a whole bunch of offended farmers sat on the Amritsar-Delhi nationwide freeway on the Shambhu border of Punjab-Haryana, protesting towards the payments. Jasbir Singh, 55, who owns two and a half acres of land in Kutha Kheri village in Patiala’s Rajpura Tehsil, says he has sufficient money in hand to undertake farming operations. “But after harvesting my paddy crop, I’ll be needing money for sowing wheat in my field. It’s only my arthiya who will give me an advance. If mandis go redundant and arthiyas go away, how will I sustain myself? I am under a debt of about ₹2.5 lakh. I don’t think I have a choice but to sell my land,” he says as he drops his head in despair.