Dharminder is a final year law student of Symbiosis Law School, Pune and an activist at the forefront of the struggle in Punjab against the recently passed ordinances.
While the whole world is struggling with the pandemic, farmers in India can be seen on the streets, protesting against three bills that have been recently passed by the Parliament of India. These bills are:
- Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
- The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020
- The Essential Commodities (Amendment) Bill, 2020
We tried to analyze the effect of these bills on the grassroot level of our country and draw a parallel with the ongoing protests, primarily in Punjab. While conversing with Mr. Dharminder, we could draw an analogy between the present situation of the farmers and the changes that will be introduced with the passing of these Bills in the Parliament.
India adopted an agricultural model in the post-independence era to overcome the challenges of famines, poverty etc. How has agriculture in Punjab evolved since independence and how is it different from the rest of India?
When India got independence, different states adopted different measures for the development of the country. India was struggling to develop various sectors in order to become self-sufficient.
Owing to their varied histories, different states in the country were at different stature at that time and the difference still remains. While some states are extremely rich in resources and are highly developed, others still depend upon the centre to sustain themselves. An apt example of such states relates to acronym of ‘BIMARU states’, a termed coined in order to depict the poor economic conditions within Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh.
Therefore, different states took different measures to develop certain sectors. A specific sort of developmental model was adopted by the states in order to facilitate their growth. This model often depended on geographical, mineral and other resources available in the state. For example, coastal areas started developing ports, likewise, places with fertile lands started developing agriculture.
Historically, Punjab has witnessed constant invasions by different people from the Northwestern border front. Due to the mountains in Kashmir and desert in Rajasthan and Gujarat, Punjab became the primary route of invasion in India for invaders like Turks, Mongols, Afghans, etc. Hence, the people in this region grew stronger and prepared themselves for such situations. The constant struggle to preserve themselves resulted in deeper connection with their roots. Over centuries, the people in Punjab became hardworking and were ready to fight off any challenge. Even after partition of India and Pakistan, Punjab was left with very scarce resources.
Punjab during independence comprised of present-day Himachal Pradesh, Haryana and Punjab. The first 5-year plan of independent India focused on development of agricultural sector of which, Punjab was the focal point. The people there tilled the lands with bare hands due to the lack of technology back then. Eventually, with the Green Revolution and setting up of agricultural university in Punjab, agriculture started to flourish in the region. Today, India is the second largest wheat and rice exporter in the world, most of which is contributed by the state of Punjab.
While people in Punjab were quick to adapt to these sudden changes due to their past experiences, such a change in the agricultural sector couldn’t be observed in other parts of the country.
How do you think the Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 and the Farmer’s (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 along with the Essential Commodities (Amendment) Bill, 2020 will affect the farmers? What can be the probable intention of the government behind introducing these Bills?
Contrary to the popular belief, these Bills aren’t very new to the economics of the nation. This has been a long pending demand of certain sections of the economists and industrialists to open up the economy on the agricultural front.
The Bills provide for hoarding of the agricultural produce by the private players which works on the basic principle of deriving profits. As of now, there is a ceiling to hoard the agricultural produce which enable a balance in the market. With the introduction of contract farming, corporate houses will be able to purchase the whole produce directly from the farmers. On paper, this doesn’t seem to be incorrect however, the horrendous truth about the situation is that when you allow hoarding of a commodity, even from a consumer perspective, it brings down the whole concept of fair-play of market forces.
Irony is that the government has reduced a lot of commodities from the list of essential commodities whereas ‘roti’ is the most important and most essential commodity in India.
One of the main motives behind the introduction of these Bills can be that the government aims at reviving the collapsing economy of the country by providing support to the corporate sector. Today, the granaries in India are filling fast. We have sufficient stock of food right now. This difference in the situation from a history where we had to import food grains to survive to a present where we have access storage of food grains demanded huge sacrifices. The farmers have exhausted their resources and have used high amounts of fertilizers and pesticides. This has not only led to the depletion of water table, but has severely affected the quality of soil. It is said that the ground water level in Punjab has to depleted to the extent that Punjab may in the near future turn into a desert. The three laws shall systematically break the neck of the farming community of India.
The other intention of the government is to help it’s industrialist friends. For far too long agriculture has not been a sector where the corporates were able to control narrative due to the over involvement of the government right from sowing of the seeds to the time when the produce was bought by the government and sold to the corporates. Here, the government’s intention is to back off from the support that it provides to the farmers and allow the corporates to deal directly with the farmers which for a known fact shall lead to exploitation.
Why are the farmers in Punjab protesting against these bills?
As mentioned earlier, successive governments in India designed certain states in specific manner. Punjab lacks industrial development. However, the state was prospering till 1970s, till the separatist movement got down on its knees. For the next 20-30 years, the state broke down completely. Punjab had already had a troubled history and now, when after so many years, peace and prosperity has been restored in the region, apprehensions are there that the land of the farmers will be taken with the introduction of these Bills.
The reason behind such apprehension is that there is global pressure on the government by the World Trade Organization and the world bank which have been constantly pressuring a lot of countries, especially India, to not provide security to the farmers and abolish ‘protectionist measure’ as they call it. The reason behind this is that other countries cannot export their agricultural produce to India with the existing prices that are cheaper than the prices of foreign produce. Apart from this, the industries and corporates are also viewing this as an opportunity to earn global profits by exporting the Indian produce internationally.
Farmers in Punjab have very small, marginal land-holdings with an average land holding of around 2.5 acres. This makes it impossible for a farmer to even sustain in these days.
There are around 2000 agricultural grain markets or APMCs for 12,000 villages of Punjab. Which implies that there is 1 mandi for every 6 villages. The Swaminathan Commission had recommended that the farmer should be able to sell his produce within 5 Km or 15 min distance from his farm. The concept of ‘One India One market’ would sideline the small farmers as small farmers cannot supply their sale nationally owing to transportation costs and various other factors.
While the APMC system cannot be termed as the best suited system for the farmers, it has worked well for the state of Punjab for the last few years. The corporate, for once, might purchase the produce of the farmers for a price higher than the MSP, but they surely wouldn’t purchase beyond their storage capacity. For example, if a company has a storage facility for 100 acres, then the corporate would purchase the produce of 100 acres.
In cases where there is a bumper crop, which has been there for many years, it isn’t feasible to expect few corporates to come in and buy the entire produce. However, the government had to purchase these crops even when they didn’t have enough storage and the grains were left to rot or when they had to hire the Food Corporation of India to manage the produce. The current system meant that once the farmer reached an APMC with his goods, the government will mandatorily have to purchase it. While the government claims that the FCI (Food Corporation of India) is a corrupt elephant, the farmers would never have to face the issue of not being able to sell their produce till the FCI was mandated to purchase the produce.
In an agriculture-based country, introduction of these Acts would indicate the beginning of an era where there will be no players to buy the agricultural produce of the farmers leaving the farmers with no other option but to sell their crops at a lower rate. This would also mean that there will be no guarantee as to what rate the farmer will be able to sell his crops at.
Currently, the MSP for rice is Rs. 1925 per quintal which goes down to Rs. 19 per kg for the farmer. However, when it is sold by a corporate, it’s sold at Rs. 220 per kg to the consumers. This price difference makes a huge impact on the lives of the farmers because they are not benefitting from it. Also, out of 23 items listed under the MSP, 21 aren’t getting the decided price even today.
One of the major reasons behind the protests in Punjab and Haryana is that only farmers in Punjab and Haryana get the MSP and thus, farmers in other states like MP and Bihar are expecting that if they are getting 600/- for a crop whose MSP is 1900/- then maybe the corporates will come and purchase it at say 1200/- which will be much more profitable to them. But, for the farmers who are getting the MSP and are at least able to break-even their produce, they might not as well be able to break-even at a lower rate. Therefore, there is an ongoing protest in Punjab and Haryana and not in other parts of the country.
How does the internal market of Punjab work? What are the links on which farmers depend upon, during crisis?
The agricultural model in Punjab is a parallel economic system which has been running for decades. The government, through these bills, aims at removing the ‘arthiyas’ or the middlemen who purchase the crop from the farmers and then sell it to the FCI. Usually, 2-3 arthiyas are present in every village. Therefore, for 12,000 villages in Punjab there are around 40,000 arthiyas.
The farmers don’t sell their produce directly to the FCI because there is no monthly income for the farmers but monthly expenditure cannot be overlooked. The farmers need money for various reasons like plantation, pesticides, insecticides, irrigation, tractors and for their personal use. Therefore, the arthiyas help the farmers whenever they required in exchange for their crops. This points towards the barter system that exists between the farmers and the arthiyas. The farmer takes money from the arthiyas as and when required and gives his crops in order to repay the debt.
These Bills were introduced with the presumption that the farmer sells his produce every six months and suffices himself for the whole period of time till his next harvest. However, on the grassroot level, the system doesn’t work like that because it is next to impossible to sustain oneself for six months, with the income generated from a 2-2.5-acre land-holding. By the time a farmer sells his harvest, he already owes around Rs. 80,000 to the arthiya and it is impossible to sustain for the next six months with around Rs. 20,000 at hand which an average farmer with a 2.5-acre land-holding is able to earn at the current MSP.
When the private sector comes in, the arthiya-system will be demolished and the farmers will become helpless because they won’t be able to approach corporates like the Adani Agro for financial aids like medical expenses or marriage of their daughters. The relationship of farmers with the arthiyas is based on goodwill, and thus they end up helping these farmers even if they charge heavy interest rates. This help cannot be expected from the corporate groups. Also, it is very difficult to obtain loans from the banks because the banks demand for a guarantee and the only guarantee that a farmer possesses is his land. Banks cannot function on goodwill. The heavy paperwork and formality involved in acquiring a loan form the bank deters the farmers from approaching a bank.
In a situation where the private companies interfere with this system, eventually the farmer will be left with no option other than selling his land or working as a laborer on his own land. As a consequence, sooner or later, these farmers will end up working in factories. The arthiya-system has been working pretty well for this part of the nation (Punjab) and that is why there is confusion about introduction of new people and new methodologies by breaking the old cycles.
The report of the Swaminathan Commission also recommended that the MSP should’ve increased manifold within the last few years but the same has not yet been applied to the practical situation. In India, 2% of the agrarian population feeds 60% of the population and even when the GDP is of India has fallen to the negative side, the agriculture sector showed a growth of 4%. This shows that the present cycle is a sustainable cycle.
Therefore, the government must be thoughtful of the implications of the changes that they are trying to bring in. The massive uproar has been subtly ignored by the authorities. This state has been a volatile area as it shares its borders with Pakistan and has had differences with the Centre for a long time. These differences might result into a law and order situation in the country thereby bringing establishment of the entire nation at jeopardy.
‘Land’ is very deeply connected to the people of Punjab. Quoting an example of the same, a primary question that pops up during marriage in this community is about the quantity of the land that you own. Therefore, it is not possible to isolate these people from their land by turning a blind-eye towards the whole event.
What will be the long-term consequence of these bills?
It is irrational to believe that if a conflict arises between the farmers and the corporates, the government will stand against the corporates in order to aid the farmers. Also, approaching courts is not a feasible idea for the small farmers who firstly wouldn’t be able to afford a lawyer and even if they do, they wouldn’t be able to stand against huge corporate companies.
A Niti Aayog meeting was conducted in 2017, where a farmer leader form Punjab was invited along with around 100 other people. In what seemed to be a planned idea, the chairman requested for the Committee’s opinion on the measures that can be taken up to improvise the stagnant farming sector in India. The very next person to respond to this was a corporate tycoon who stated that the corporate sector can help the government with a precondition of introduction of cluster farming in India. It meant that around 5000-7000-acre clusters of land were to be formed where the farmers will be mere spectators and will work as laborers while the corporates will regulate the production.
Once you enter into this trouble, it’s going to increase exponentially. Because as soon as you enter into the cycle of cluster farming, you will start falling back to the system of zamindari where the zamindar will now be termed as a corporate.
The introduction of these Bills can lead to the same consequence because eventually when the farmers will not gain enough profits, they will end up selling their lands either to the corporates or to the bigger farmers.
What is the future of corporate farming in India? How can we balance corporate farming while protecting the interests of farmers?
The main contention with the introduction of these Bills is the use of the ‘shock and awe’ methodology by the government to bring in changes to the system. The government didn’t consult the farmers while bringing in such a huge change into the system of farming which will affect the lives of the farmers to a great extent. Also, the government legislated on a subject of the state list, without proper consultation with the states.
The government could’ve resolved the whole issue by merely adding a few lines to the Bill, regarding MSP assurance. Allowing entry of private players while ensuring MSP and without disturbing the functioning of the APMCs would lead to a balance of interest of both the farmers as well as the private players. This system can be observed in Patiala, where a PepsiCo industry has been established that purchases produce from the nearby fields. It is not true that private players aren’t participating in agriculture as of now. The problem is with their desire to gain a monopoly over the market by eliminating all other players.
The government’s initiative of providing MSP to the farmers is heavily burdening the economy of the country. Especially after the financial gap created by demonetization and GST. A US-based financial agency stated that ‘the Indian economy is on the brink of collapse’. Describing a famous saying of Hindi, ‘doobte ko tinke ka sahara’ an analogy can be drawn that the government is trying to revive the economy by initially trying to privatize the railway and then trying to privatize agriculture.
What are the possible solutions/ amendments that can resolve the issue at hand?
In the light of the government turning a deaf ear to the Rajya Sabha events and the resignation by Harsimrat Kaur Badal, that led to the breaking of one of the oldest allies of the government, it’s very inadequate to expect any changes in the Bills that have been passed. The government doesn’t have a grey area to accommodate the interests of farmers in this spectrum. Massive protests and bandhs in the country have failed to affect the introduction of these Bills.
However, in the utopian world, some of the changes that can be brought forth are:
- Adding a clause where APMC will continue to function and the MSP will remain constant
- The government wouldn’t permit the essential commodities to have a free-run, where hoarding of these essential commodities would be allowed.
- A proper judicial system would be established for the corporates to come in and purchase the produces, in order to protect the interests of the farmers in case if the corporates refuse to purchase the harvest. For example, a corporate might reject a potato producing stating that they don’t match the quality standards. The courts should interfere in such matter and decide as to what qualifies as good quality and what doesn’t because corporates can be very arbitrary in their reasoning.
It is often protested that Delhi is becoming a gas chamber due to the burning of fields by the farmers. The sad reality is that no one bothers to research upon the reasons behind the same while considering the plight of the farmers who barely have any other option.
In a situation where we are already facing a downfall in the other sectors, interference with the one sector that was functioning well might not lead to healthy outcomes for the economy of the state.
Interviewed by: Sujata Porwal, Research Asst.- Young Division, Legal Desire Media & Insights
