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Wednesday, September 23, 2020

Speak to the farmer

In face of protests, government must clarify that ordinances, to be debated in Parliament, will not affect MSP procurement.

By: Editorial | September 15, 2020 12:11:54 am
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Two things are striking about the ongoing farmer protests against the three central ordinances that seek to liberalise agricultural trade in the country. The first is the apparent reason. Farmer organisations say that the ordinances — particularly the one that allows sale and purchase of crops outside the premises of APMC (agricultural produce market committee) mandis — will sound the death knell of minimum support price (MSP)-based government procurement. This fear has no basis. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, which is to be approved in the current Parliament session, merely provides an additional marketing channel. Farmers, if they choose, can now sell directly to processors, retailers or exporters. They can, of course, still take their produce to mandis. Government agencies, too, can continue to procure grain from these state-regulated market yards. The ordinance only dismantles the monopoly of the APMCs.

The current protests are happening largely in Punjab and Haryana, states that have well-established systems of mandis and MSP-based wheat and paddy procurement, valued at Rs 80,000-90,000 crore annually. The benefits of it are obvious not only to their farmers, but also the powerful lobby of arhatiyas (commission agents) who extend crop loans and “facilitate” procurement at the APMCs. Any threat to the existing order is bound to face resistance. One shouldn’t be surprised to see the stir finding support among farmers in other states that have also built strong public grain procurement systems.

The Narendra Modi government should explicitly clarify that the ordinances, while they are being presented and debated in Parliament, will not affect MSP procurement operations. That, in any case, is not the intent behind the present legislation. These only seek to remove intra- and inter-state movement and stockholding restrictions on agricultural produce, apart from enabling farmers to enter into contracts for supplying directly to organised agri-businesses (think cooperative dairies or sugar mills that don’t procure milk and cane through mandis). The Punjab wheat farmer may be happy selling in mandis to government agencies. But that shouldn’t be at the expense of the Maharashtra pomegranate or orange grower, who would definitely want to explore options outside of the APMCs.

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