Manguirish Pai Raiker speaks about the new legislations brought in to bring prosperity to the farming community
India was known for its agriculture heritage. Villagers would survive on agricultural produce and also supply them to the cities. Later, due to continuous droughts, agriculture was neglected and the farming community left the villages in search of jobs in the industries. Agriculture was not worth due to natural vagaries and uncertainties. There were millions dependent on it. But they were left with little choice until the irrigation schemes were put in place and supply of water and electricity was made available to them. Mechanization brought in further comfort to this sector. During the pandemic, every individual was only concerned about the availability of food products. In this context, the position of the farmer has come to the fore. His status as a provider became an important factor. The Government also realized this aspect and took into consideration the farmer’s role and made several provisions for the agriculture sector.
Growth in agriculture was falling short of the total economy and its share in the national output had declined drastically over a period of time from around 50% in the beginning to 17%. The Central Government made concentrated efforts to improve the gaps and provided monetary stimulus through banking channels, making them direct beneficiaries. Lot of other incentives including support price were introduced by the states. Agriculture is by far the largest employer throughout the country. Today, we have excess commodities even after providing food to over 1.35 Billion people of this country. This is possible only because of the toiling farmers; who at times, are left to fend for themselves.
The Government realized that because there was surplus food available, economic growth was possible. Having surplus money or mineral wealth does not suffice if there is no food to eat. There was also a realization that farmers were not getting the right remuneration for their efforts. More attention was given to this aspect and new schemes were introduced to motivate and promote farming activities. This helped to substantially increase the yield of horticulture, dairy products, poultry produce, floriculture, and others like piggery etc. Farmers were also provided with inputs like soil analysis, fertilizer requirements, pest control advisories, mechanical equipment, control farming implements and timely resolutions of their grievances.
The Government brought in laws to make ‘ease of doing business’ in agriculture. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation), the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services and the Essential Commodities (Amendment) Act are now implemented. This hopes to end both, the License Permit Raj and inspector raj in the agriculture sector. This is a much needed reform which was not a part of the major reforms undertaken in 1991 to end the ineffective remnants of the socialist era. This would also end years of systematic policy bias against farmers. Combination of two sets of laws namely the Essential Commodities Act (ECA)and the state level Agricultural Produce Marketing Committee Acts, defined how the supply chain of the farm produce were managed in India. ECA was enacted in 1955 to control production, supply, trade, and storage of certain commodities deemed to be essential. The Act itself did not lay out the regulations but allowed the states to issue control orders related to dealer licensing, maintaining stock limits, the power to control prices, obligatory purchases and restrictions on transportation. The authorities had the draconian powers to raid hoarders, impound the goods, and cancel the license with also imprisonment of the offenders.
The Agricultural Produce Marketing Committee system forced farmers to sell their produce only through designated channels. The disadvantages of the system were well documented and demands were raised for change. Some attempts were made to reform it partially but the system had remained the same until now. The system was very unfair to farmers, and was never able to achieve its main purpose of price stability. It was very clear that the Essential Commodities Act and the Agricultural Produce Marketing Committee system had failed to achieve its goal. Farm produce is collected according to harvests, and price stability depends on storage. By forcing farmers to sell their produce through designated channels, and placing arbitrary restrictions on inventory, the system discouraged price discovery and storage. Anyone who invested in storage ran the risk of being called a hoarder and facing prosecution. Thus, every year, India would see the prices of onions swinging wildly.
These reforms will help to accelerate growth in the sector through private sector investment in building infrastructure and supply chains for farm produce in national markets. The small farmers who don’t have means to either bargain for their produce to get a better price or invest in technology to improve the productivity of farms will now benefit from these reforms and will also allow farmers to sell their produce outside the APMC to whoever they want. Farmers will be able to get better prices through competition and cost-cutting on transportation. All commissions are eliminated causing loss to the APMC operators. The legislation on contract farming will allow farmers to enter into a contract with agri-business firms or large retailers on pre-agreed prices of their produce. The Essential Commodities (Amendment) Bill, 2020, has removed the list of essential commodities ending the imposition of stock-holding limits except under extraordinary circumstances.
Elimination of middlemen, all types of commissions and cess will bring prices under control and the farmer will be able to get the market price for his produce. This will also encourage the youth to take agriculture as a career instead of running to the cities for employment, thus reducing the pressure on urban areas. Additional employment generation will happen and better realization of the produce will bring happiness and prosperity to the farming community
