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Experts warn: Agri reforms to take away big share of Punjab revenue from mandis

Farm experts, however, say that an agrarian state like Punjab will end up as loser once the new measures are implemented.

Written by Anju Agnihotri Chaba | Jalandhar | Published: June 7, 2020 6:28:43 am
Agriculture reforms, Amarinder singh, mandi revenue, Punjab news, Indian express news Punjab earns Rs 3500 to 3,600 crores annually in the form of market fee and rural development fund (RDF) for providing its yards for selling wheat, paddy, Basmati and cotton crops in the APMC premises. Such taxes are paid by the buyers, not by the farmers.

When Chief Minister Capt Amarinder Singh termed the Centre’s move to end the Agriculture Produce Marketing Committee (APMC) monopoly through an ordinance as “a brazen attempt to erode and destabilise the country’s federal structure,” he was only giving voice to fears being raised by the farm experts, who besides calling the Union Cabinet’s move “anti-farmer and anti consumer”, say that it will land a huge blow on the state coffers.

The Union Cabinet earlier this week cleared three ordinances, which will lead to the Essential Commodities Act of 1955 being amended, and is aimed at lifting restrictions on key commodities such as cereals, pulses, onion and potato, and giving farmers the freedom to sell their produce directly or through e-trading platforms without being confined to state mandis. The ordinances will also enable farmers to enter into an “agreement” with private sector players on pricing and purchase.

Farm experts, however, say that an agrarian state like Punjab will end up as loser once the new measures are implemented.

Punjab, they say, currently earns Rs 3500 to 3,600 crores annually in the form of market fee and rural development fund (RDF) (at the rate of 3 per cent each) for providing its yards for selling wheat, paddy, Basmati and cotton crops in the APMC premises. Such taxes are paid by the buyers, not by the farmers.

As per the data sourced from Punjab Mandi Board (PMB), in the Kharif and Rabi season 2019-20, the government earned Rs 3642 crore by charging market fee and RDF. This revenue goes directly to the Punjab government, which utilises it to maintain 70,000 km-rural link roads and for construction of village streets.

“This revenue comes as big relief for the government, which is always dependent on the Centre for getting its share of GST and other grants,” said a senior officer in PMB.

Renowned agricultural economist Sardara Singh Johal, while talking to The Indian Express, said, “Providing selling facility to the farmers outside APMCs is a good move. The state government, however, should ensure that even for such sale, purchase tax and the market fee is charged from the buyers and such fund is shown in the state budget and used for the development works. If the government fails to make any such provision, then it will face a major financial blow”.

The Farmers’ Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020, notified by Centre on Friday, allows barrier-free trade in agriculture produce but proposes to bar state governments from imposing taxes on sale and purchase of farm produce undertaken outside the mandis.

“Fund earned from the market fee or RDF by PMB, are like a six-monthly recharge for the state’s economy as crops are sold in the APMCs every six months. The new law will hit APMCs badly and big corporate houses will purchase farmers’ produce in their own premises and mint money without doing any welfare work for the state,” said Kesar Singh Bhangu, professor of economics at Patiala University.

He too termed the Centre’s move anti farmer and anti Punjab and Haryana.

Prof (retd) Gian Singh, an expert on agriculture and economic issues, said that the move allowing sale of crops outside the regulated markets is a step towards abolishing the MSP and the worst sufferers will be farmers with non-MSP crops. “The major implication of selling outside the non-regulated markets would be control of the big players on the agriculture sector who will hoard the produce,” he said, adding that 85 per cent of farmers in India have small and marginal landholdings and not enough produce to take to mandis. “Why would they go to other states to sell their crop,” he asked, adding that amendment in the ECA is a move to finish the federal structure of the country.

“How will small and marginal farmers, majority of whom are illiterate and lack knowledge or information about distant markets, seek better prices for their produce,” asked Jagmohan Singh, general secretary, Bhartiya Kisan Union (BKU) Dakaunda, adding that there is no evidence to show that deregulation of markets, as was done on Bihar or Kerala, has actually ensured remunerative prices for farmers.

Former PMB chief and president of BKU-Lakhowal, Ajmer Singh Lakhowal said that with the amendment in the APMC ACT, Punjab and Haryana states will face a major loss and thousands of employees at Mandi boards will be rendered jobless. He added that they will fight new amendments and ordinances tooth and nail.

“Farmers have no time to go searching for new markets. Earlier, the ‘Apni Mandi’ scheme was launched for farmers where they could sell their produce directly, but farmers could not find time to do that,” said Ravinder Singh Cheema, president, Punjab Arhtuya Association. He said that earlier the government had also brought E-NAM under which farmers could have sold their products in any mandi across the country but it was not much beneficial for a state like Punjab where 96 per cent crop is sold under the MSP regime and only a small percentage of farmers are into commercial farming.

“These reforms will encourage multinational companies to enter the farming sector. Scrapping of APMC in Bihar brought no benefits to the farmers, but led to their exploitation at the hands of big traders,” said Cheema.

All India Kisan Sabha (AIKS) also demanded to scrap the ordinances and amendments in ECA. It said that it will burn the copies of these anti-farmers Ordinances on June 10. The APMC Act, it said, was introduced in the 1960s and 1970s to put a check on the monopoly of large traders and big buyers who historically used their economic means to buy grain from poor farmers at low prices.

“If the intention of the government was genuine then it should ensure MSP for all crops at C2+50 per cent with guaranteed procurement and a minimum wage of Rs 600 per day to all agricultural workers said Dr Ashish Mital, member, All Indian Kisan Sangarsh Coordination Committee (AIKSCC).

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