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Explained Ideas: Why ongoing protests will hurt farmers and benefit traders

That allowing more buyers for farm produce would reduce exploitation has been the wisdom-by-consensus of almost all experts, expert committees and conferences at least since the late 1980s, writes Rajiv Mehrishi.

By: Explained Desk | New Delhi |
Updated: December 23, 2020 8:59:22 am
Farmers block NH9 during their ongoing agitation near Ghazipur in the early hours of December 22, 2020. (Express Photo: Prem Nath Pandey)

Rajiv Mehrishi, former CAG of India, wonders why farmers are protesting against the new farm laws and, in doing so, protecting not their own but the interests of the traders. In his opinion piece in The Indian Express, he explains why the new farm laws make sense for the farmers.

“The APMC Act of the 1950s freed the Indian farmer from the monopoly of the local trader (a la Kanhaiyalal of Mother India), undoubtedly with substantial benefits. Equally truly, what got created were oligopolies. In practice, each trader in the mandi has built relationships with a set of farmers: The traders provide credit, the farmer then sells his produce only through that trader, to have the credit/advance against such sales adjusted. More often than not, the mandi trader is also a conduit for the sale of foodgrain at MSP (direct sale by farmers to MSP centres is virtually impossible), reducing the net received by the farmer to below MSP (the traders’ “commission” for such transactions is obviously off the books). The symbiotic relationship between particular traders and farmers, which have been created within these oligopolies, is possibly less exploitative only in comparison to the Kanhaiyalals of yore,” he writes.

Taking the next step of allowing/introducing more buyers for farm produce would further reduce exploitation of farmers and this has been the wisdom-by-consensus of almost all experts, expert committees and conferences at least since the late 1980s.

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“The logic is simple: If the farmer has a single buyer for her produce, she is most vulnerable; if there are a few buyers, she is less open to exploitation; and if there are an unlimited number of buyers, she is the best off, because she can sell to whoever offers the best price. Few can argue against this simple logic,” writes Mehrishi.

What is astonishing then is that the concerns of the traders — additional sale options for farm produce other than the mandis, and contract farming — are being mouthed by the farmers.

What is equally astonishing is the silence of all those “intellectuals” and “experts”, barring a few exceptions, who had passionately argued for years for these reforms.

“Let us not let our reform imperative be informed by which party is in power,” writes Mehrishi.

There is obviously more to this agitation than meets the eye, he states. To think that the farmers have been “misled” as part of a “political conspiracy” is perhaps naïve.

“Perhaps, the key lies in the way the MSP scheme works in certain states, and the way ‘big’ farmer-trader relationships have worked out in such states,” he concludes.

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