Why are farmers wary of corporates? These Kerala farmers have a tale to tell

Alibhai, a coconut farmer in Kerala, isn’t aware of the ongoing protest against the new farm laws, at the Delhi border. The 67-year-old finds it strenuous to read the newspaper because of his weakening eyesight. Nor does he find his smartphone user-friendly. Old age ailments and a fading memory have made Alibhai weak. But despite his age and health, he can’t think of retiring. For, he has to repay a loan he took 16 years ago.

Back in 2003-04, Alibhai was among the many farmers in Kerala, Karnataka and Tamil Nadu to be wooed by alluring advertisements to try their luck with a new crop — safed musli, a medicinal herb.

At least 80 farmers from the three states engaged in a tripartite contract with Hyderabad-based Nandan Biomatrix and its Kerala franchisee Herbz India.

The agreement stipulated that the company would provide seeds at ₹500 per kg. The farmers had to cultivate the herb at their own cost and the company would buy the crop at a price not less than ₹1,000 per kg of dry musli.

The cultivation started in September 2003 and the ripe tubers were ready by next March. But Nandan Biomatrix reneged on the contract and refused to buy the produce.

When Alibhai was told how farmers were protesting in Delhi in the cold winter against laws that could put farmers in a situation like his, he turned emotional. He had given up fighting long back and has been struggling hard to make ₹24,000 every month, to repay his loan.

The corporate maze

Minimol Abraham and her husband Jayanthan, a couple from Kattappana village in Idukki district who also signed the farming contract, say they were told by the company that it can’t purchase wet musli from the farmers.

“They asked us to dry the crop which would have required us to spend a huge amount of money. We reaped the produce and piled it in a corner. The entire crop was destroyed,” says Jayanthan.

Drying the narrow wet tubers requires diligent human labour which is very expensive. Most of the farmers could not afford to do it.

But unlike Alibhai, Jayanthan and Mini did not fall into the debt trap as they had other sources of income. Both of them retired as deputy secretary-rank officials, and have been doing farming too.

“We were in touch only with the Kerala-based Herbz India. We knew nothing about Nandan Biomatrix although they were a party in the contract. We trusted these people and were cheated,” says Jayanthan.

On the other hand, Herbz India, a Calicut-based company, says it is as helpless as the farmers. “Nandan Biomatrix went back on the promises. It failed to buy the yield on time. We were told that they would buy the dried crops. There was complete uncertainty and finally they refused to buy the produce. The farmers and we suffered huge losses,” says Vinay James, managing partner and CEO of Herbz India.

According to the contract, a copy of which has been accessed by The Federal, Nandan Biomatrix had agreed to buy back the dried musli through Herbz India, which was supposed to get 10% from the payment made to farmers.

Multiple attempts to contact the officials of Nandan Biomatrix for comments failed to elicit any response.

The legal battle

With the mounting financial losses, the farmers finally decided to take the legal route. Ambika Devi, a farmer based in Kozhikode, filed a complaint in the District Consumer Protection Forum seeking compensation from Nandan Biometrix.

In what came as a shock to the farmers, the forum ruled that a farmer is not a ‘consumer’ and doesn’t fall under the relevant provisions of the Consumer Protection Act, 1986.

Aggrieved by the order, Ambika Devi and a few others appealed to the State Consumer Dispute Redressal Commission, which set aside the District Forum’s order and held that a farmer is also a consumer.

Nandan Biomatrix then filed an appeal in the National Consumer Disputes Redressal Commission (NCDRC), which after a few years, upheld the state commission’s ruling and endorsed that a farmer engaged in a contract has every right to seek protection as a consumer.

The company then filed an appeal before the Supreme Court. By then, a bunch of civil appeals had been filed against it. The apex court, considering all the appeals, upheld the ruling pronounced by the National Commission that the farmer falls within the ambit of the Consumer Protection Act, 1986.

In the judgment dated March 6, 2020, the court 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”.

Ignoring SC orders

Meanwhile, there had been multiple litigations going on simultaneously.  Just after Nandan Biomatrix violated the contract and a dispute had arisen, an arbitration process had begun in Hyderabad.

Farmers from Kerala were asked to appear in Hyderabad, but many, having faced financial setbacks, could not afford to travel to Hyderabad for arbitration.

However, when the Supreme Court made its final ruling, it also ordered the company to pay ₹25,000 to each farmer for court expenses and directed the concerned district courts to decide the matter within three months.

But Nandan Biomatrix seems to have not paid heed to the SC order and the issue remains unresolved, say farmers who have again approached the SC with a contempt petition against the firm.

“They showed complete disregard to the judgment. They stopped even attending our calls long ago,” says advocate Bobby Augustine, the counsel for farmers in the Supreme Court, adding that they are still fighting for the farmers.

Many, who lost money after getting into the farming contract, are unaware that the case is still being fought. Many rural farmers were not familiar with the nitty gritty of the contract.

When The Federal reached out to Alibhai, he was surprised to know that the case had not ended. Even Minimol and Jayanthan were in the dark that the SC had ruled in favour of the farmers.

Alibhai recalls that he came to know about safed musli and its attractive offers through his friend Ummar, who too has an equally disheartening story to tell. A Gulf returnee, Ummar invested his entire life savings in the project and lost everything.

“I worked in the Gulf for 25 years, did menial jobs, married off two daughters and finally decided to come back and settle in my village. I invested Rs 5 lakh in safed musli cultivation,” says the 64-year-old, who too earns a living from coconut farming now.

Like Alibhai and others, Ummar too came to know about the deal from some of his friends. “We were a group of five friends, none of us got the money back,” he says.

Ummar showed a bundle of papers related to the contract and the litigations — all in English and complicated legal language which do not make sense to him.

The contentious omission

Kerala State Planning Board member and economist-author Ramakumar argues that the story of these farmers shows how farmers get exploited when big players take over the market.

“The farm bills made a deliberate omission of this important judgment. They are mute on this aspect,” he says.

Under the new farm laws, farmers cannot approach local courts in case of a dispute with a company and only reach out to the sub-divisional magistrate.

Ramakumar believes that this omission has been done deliberately so as to skirt the Supreme Court judgment upholding that farmers are consumers too.

Alibhai and others are now keeping their fingers crossed — not only for justice in their case, but also for the victory of farmers protesting in Delhi in the biting cold.