For ages, a farmer in India has always had the highest emotional space because he is perceived to be willing to feed everyone without distinction.
Although we became a free nation in 1947, the farmer continued to be chained by shackles. The inherited laws did not allow the farmer to sell his produce to a place or person of his choice. There were restrictions on storage. No one could keep foodgrains more than what was mandated. Farming activity over the years turned more of an obligation than an economic enterprise. Subsequently, these policies led to distress and anxiety, turning a farmer from being a businessman who commanded respect to a symbol of the oppressed.
The ‘draconian’ Essential Commodities Act, coupled with the Agricultural Produce Marketing Committee (APMC), crippled the agricultural economy over the past five decades. It bred monopolistic tendencies and imposed a heavy burden on the farmer. On May 15, the government decided to delist all agricultural commodities from this law and remove the ‘licence raj’, allowing a farmer to sell his produce to anyone, anywhere across the country without any restrictions.
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This single move is likely to unleash the true potential of the Indian farmer and he could become a businessman in the true sense. The removal of trade restrictions gives him the option of undertaking the economic activity out of free will.
Although it would take some time for the full impact of the decisions to be seen on the ground, it would certainly happen. The clamour for removal of these restrictions has been there for the past few decades, but it needed an invisible virus to make it actually happen.
The key thing which emerges following the freeing of farmers from the ‘licence raj’, is the discovery of new markets and prices. The National Agriculture Market, or eNAM, which provides online trading platforms for agricultural commodities in India, is likely to benefit many private players. What remains to be seen is how this price discovery takes shape in the new setup. This would push entities into striking price deals with individual farmers even before the seeds are sown. This is one benefit that would greatly help a farmer, and the laws need to be amended accordingly.
The need of the hour is to have a structured data set at each stage of farming — from preparing a field to sowing and harvest—to ensure there is true price discovery. The government should now revamp the archaic data collection programmes.
Surely, it is time to remind ourselves of what Chanakya, the ancient Indian philosopher, had said:“Prajápatye Kasyapáya déváya Sadá Sítá medhyatám déví bíjéshu dhanéshu cha. Chandaváta hé (Salutations to God Prajápati Kasyapa. Agriculture may always flourish and the goddess may reside in seeds and wealth).”
(This story is part of a series on Farm Matters)
(The author is a banker turned entrepreneur and founder of Agriculture Risk Management Firm Agri Risk,(hummingbird.in) which is an independent agriculture data entity, that addresses the data asymmetry in Indian agriculture sector by leveraging data science and cutting edge technologies)
(The Federal seeks to present views and opinions from all sides of the spectrum. The information, ideas or opinions in the articles are of the author and do not necessarily reflect the views of The Federal)