In 1947, when India gained Independence, the urban-rural income ratio was estimated to be 2:1. That ratio now stands at about 7:1. The decline came even as farm production grew to the point that India became self-sufficient in food production and also kept exporting some food crops. For 60 long years, governments kept ruling in the name of poor farmers and ensuring that they remain stuck in poverty.
Even as India attained surplus growth in agro commodities, our policies remained anachronistic and did not factor in the variety of post-production activities. No thought was given to processing, value-addition or marketing, and trade of farm produce to make the Indian farmer self-sufficient. Less than 5 per cent of India’s food and agriculture produce is processed in contrast to over 50 per cent in developed countries.
Over 50 per cent of India’s population, directly or indirectly, depends on agriculture, which contributes about 12 per cent to GDP, a fact that our budgetary allocations have chosen to gloss over in the Congress era of governance. Public investment in agriculture has been below 5 per cent resulting in low capital formation and low private sector investments, leading to poor agri infrastructure. No policies were drafted to allow farmers to market their produce and earn the profits that an open, competitive market would have allowed them to make.
It is against this backdrop that the government has pushed for the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill and Essential Commodities (Amendment) Bill. Together, these three pieces of legislation will create a system in which farmers and traders can sell and buy agri products outside mandis. The Bills provide for a system that encourages intra-state trade and reduces transportation cost. The Bills formulate a framework on agreements that allow farmers to engage directly with agri-business companies, exporters and retailers for services and sale of produce. All this will be achieved by giving the hardworking farmers of India access to modern technology.
India’s agricultural markets restrict farmers from selling directly to retailers and getting the right price for their produce. Also, the existing system forces farmers to pay undue commissions. The Opposition has misinformed people saying the Bills open the road for corporates to exploit farmers. In fact, these pieces of legislation bring uniformity into contractual farming rules and provide a framework for trade agreements on farm produce. Farmers cannot be forced to enter into any agreement. They will be free to choose who they want to sell their produce to and a regulatory framework will protect them.
Concerns over contract farming are also misplaced. Contract farming is not anti-farmer by its nature. As much as 66 per cent of poultry business in India is under contract farming. Once contract farming is mainstreamed, agribusinesses will be able to pool farmers, invest in their land and make the latest agri technology available to them.
The Bills are part of the Narendra Modi government’s commitment to double farmers’ income and follow its credo of minimum government and maximum governance. They are designed to free the farmers from the hold of government-controlled markets. The Essential Commodities (Amendment) Bill makes provisions for the removal of items such as cereals and pulses from the list of essential commodities and attract foreign direct investment in the sector. Some sections have raised the fear that this will compromise on food security. They must know the Food Corporation of India will continue to stock essential commodities such as wheat and rice, ensuring that India’s food security isn’t hit. Also, traditional mandis will stay. The proposed pieces of legislation will only remove trade barriers and allow digital trading of farm produce.
A lot of misinformation is being spread about the Minimum Support Price (MSP). A fear psychosis is being created amongst farmers by telling them that with the passage of the Bills, MSP will be done away with. Parliament has repeatedly been assured that MSP will stay. Those opposing the bills have either not read them or are just worried that an empowered farmer doesn’t fit into their scheme of vote bank politics.
During 2009-2014, the budget allocation for agriculture increased by a meagre 8.5 per cent. From 2014-2019, the Modi government took it much higher – an increase of 38.8 per cent. Today, the parties that are responsible for the poverty of those who feed us are questioning our commitment to farmers.
Agriculture sector badly needs high-end technologies, digital tools, entrepreneurs and farmer organisations to provide services to farmers. The Modi government has already created 2,000-plus Farmer Producer Organisations (FPO) and 10,000 more are in the works with a budgetary allocation of Rs 5,000 crore. Over 1,000 agri start-ups, driven by young technology graduates, have been created and over 20,000 agri clinics have been made possible by agriculture graduates. None of this can grow if reforms don’t happen.
India has given the new-age farmer internet access. Nobody should now try to stop this empowered farmer from using the same internet to access markets to sell his produce. The Modi government will do everything to empower this new-age farmer; we owe this to the people who feed us. I hope the Opposition will rise above partisan politics for this cause.
This article first appeared in the print edition on September 22, 2020 under the title ‘Power to new-age farmer’. The writer is national general secretary of BJP and Rajya Sabha MP
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