Part 3: Why the old wine in new bottle smells stale

Replacing the mandi infrastructure with bigger cartels of private players is not the way forward

agricultural reforms, Essential Commodities Act, farmers, agriculture sector
The of scientists led by Prof P V Shivaprasad has shown that a previously unknown AGO named AGO17 is essential for the growth of panicles that hold rice grains. Photo: iStock

The Centre on Friday unveiled what it termed as “sweeping reforms” to transform the agriculture sector. But the decision to give farmers freedom to sell their produce, critics say, will not only offer few immediate benefits to them amid the coronavirus pandemic but may also provide little succour in the long term.

Finance Minister Nirmala Sitharaman said that the government would amend the Essential Commodities Act and that the Centre would ask states to amend their respective Agriculture Produce Marketing Committee (APMC) Acts, which BJP-ruled states Madhya Pradesh, Uttar Pradesh, Gujarat and Karnataka have done already.

Besides, the government will frame a new law to provide more marketing choices to farmers to sell their produce at an attractive price to any buyer of their choice. The proposed changes and the deregulation of most agricultural commodities like onions, pulses and oilseeds are aimed at enabling private players to enter the agriculture market with a hope to increase competition and help farmers get better market access.

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However, farm experts are wary about the proposed changes and say the government should exercise caution.

Devinder Sharma, a food and trade policy analyst, says that if the argument for dismantling the APMCs is that farm committees have become a stronghold of cartels, then it’s an issue of failure of governance. Replacing the mandi infrastructure with bigger cartels of private players is not the way forward, he says.

Also, many of the changes seem to be long-term and will not offer an immediate relief to the farmers affected in times of the pandemic.

Moreover, Sharma says, much of what has been spelt out now was mentioned in budget documents previously. “Why is the government using this pandemic to pass laws without discussions?”

Sharma cites the example of Bihar, which revoked its APMC Act almost a decade and a half ago. “After the Act was revoked, many farmers had to sell their produce below the minimum support price. It is not unusual for wheat and paddy grown in Bihar and Uttar Pradesh to be sold in mandis in Haryana illegally,” he says.

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This is because farmers in Bihar and Uttar Pradesh do not have enough buyers procuring their produce in their states. “Where did the so-called buyers, who the government thought would come after opening up the market, go?” he asks. Instead of dismantling certain laws, the government should widen the network of these markets, Sharma says.

Krishna Prasad, director at Sahaja Samrudha, an organic producer and marketing company, says he looks at the government measures from the point of ending the monopoly of APMCs. But he suggests setting up more farmer markets like Uzhavar Santhai in Tamil Nadu and Rythu Bazaar in Andhra Pradesh and Telangana to provide the growers greater access to the cities.

Besides, he adds, the government must improve infrastructure by enabling transport facilities for the farmers. “Like milk collection, let the government now create collection points and vehicles to take the produce from rural areas to urban centres where demand exists.”

To be sure, the agriculture reforms are not sudden. In fact, the Centre has been pushing the states to scrap APMC Acts and adopt the Model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017.

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Also, this year’s Economic Survey called for scrapping the Essential Commodities Act saying the law was “anachronistic” and led to harassment of farmers.

But not all agree the Centre’s decision will result in a positive change. Some highlight the failure in states like Odisha and Assam where the electronic National Agriculture Market (e-NAM) didn’t prove beneficial to farmers. Many a time the farmers were left in the lurch in the absence of poor internet connectivity and unified licence to traders.

Abhijit Sen, a former Planning Commission member and a professor at the Jawaharlal Nehru University, says all governments have been thus far unsuccessful in achieving the true objective of such reforms.

“Also, states still have the right to prevent crops from moving across their borders,” he says. “We have to see if that will change, so that farmers can get a better price.”

(This story is part of a series on Farm Matters)