Jay Patel
Story so far: Agriculture policies in India have always been a complex technical subject and farm trading has been a monopoly of few powerful entities till now. This has created an information chaos among the farmers, the sections of the economy whose issue never get attention of mainstream media.
With the ongoing farmers’ protest entering its fourth week, Union Agriculture Minister Narendra Singh Tomar has on Thursday written an open letter to the farmers, assuring them that the Centre is ready to give a written assurance regarding minimum support price (MSP). The Union Agriculture Minister said that full protection has been ensured to farmers in these legislations.
Now actually going through the whole bill is like going through an ocean of technical jargon, so let’s clarify the below 8 key things which are a source of confusion.
1. The government is ready to give a written assurance on the MSP.
Procurement at Minimum Support Price will continue and farmers can sell their produce at MSP rates, the MSP for Rabi season will be announced next week. Earlier One of the Major Demand from Farmer’s unions was to get written assurance on MSP from the Government.
The MSP is basically a guarantee to the farmers that if they don’t have a better price in the markets for the covered crops, the government would buy their agricultural produce at a fixed rate — the MSP. This came to be perceived as protection against loss for the farmers. 24 crops are covered under the MSP regime. In Punjab, more than 95% of paddy growers benefit from MSP, while in UP 3.6% of farmers benefit.
In the existing APMC system, it is mandatory for farmers to go through a trader (via Mandis) so as to sell their produce to consumers and companies and they receive Minimum Selling Prices for their produce. It was this very system that has influenced the rise to a cartel led by traders and uncompetitive markets due to which the farmers are paid MSP (a very low price) for their products. For example a farmer in Gujarat can’t sell the product to a trader who is not approved by APMC (they can but the trader have to give 1% cess to state through APMC, known as Mandi Tax)
Clarification: The Proposed system in the new bill removes any such restriction. In short farmers are given new ways to market their product apart from APMC. This provision of new Freedom has created confusion, few farmers thought that it would remove the APMC totally, which is not true. Government has clarified multiple times that the current structure of APMC would stay as it is.
2. States can be given the right to impose tax on markets outside the APMC.
Now Without a legally mandated intermediary, direct sales to consumers (like restaurants) become possible for farmers. This can reduce the price that consumers pay for food but this has created fear for the State government as the earlier intermediaries like APMC were revenue generators for the state government.
Clarification: The new Bill maintains the right of the state government to collect tax on markets outside of the APMC. Now the state government has to decide the mechanism to make agri-transactions made outside APMC to hold accountable for tax payment.
3. Farmers will have the option to approach the courts in case of any disputes.
As the new law provides for a special dispute resolution mechanism, it bars the jurisdiction of the civil court from entertaining any suit or proceedings in respect of any matter that could be dealt through the special mechanism provided in the law.
Section 15 of the Act says “no civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter, the cognizance of which can be taken and disposed of by any authority empowered by or under this Act or the rules made there under.”
It is essentially the replacing of the jurisdiction of civil courts with a heavily bureaucratic procedure under the authority of the SDM, a government employee that has raised fears among the farmers.
Clarification: The law also provides for a dispute resolution mechanism in Chapter 3 of the Act. Section 8 of the Act, which lays down the “dispute resolution mechanism for farmers” states that “in case of any dispute arising out of a transaction between the farmer and a trader”, a Conciliation Board appointed by the Sub- Divisional Magistrate will settle the dispute. It says the settlement by the Conciliation Board will be binding on the parties.
4. No one can claim rights on farmers’ lands
This set of confusion came from a section about Contract farming. As per the new bill Farmers can enter into a contract with agribusiness, firms, processors, wholesalers, exporters or large retailers for sale of future farming produce at a pre-agreed price. This move is for Marginal and small farmers, with land less than five hectares, to gain via aggregation and contract (Marginal and small farmers account for 86% of total farmers in India).
Clarification: No one can claim rights on farmers’ lands because these laws do not allow the transfer, sale, lease and mortgage of the land. Contractors will not be allowed to make any changes on farmer’s lands. Also Contractors will not be permitted to take any loan to make any developments of farmers’ lands. In this regard, policy makers have explained and clarified multiple times that the farm laws do not allow anyone to seize control over farmers’ lands in any situation. Also the contract agreement would happen at farmer’s will and there would be no institutional force to enter into agreement.
Bottom line: The recent demonstrations by tens of thousands of farmers opposed to new agricultural reforms won’t be so easily subdued. The scale of the protests, paired with the widespread public support for the farmers, has put The Government in the unusual position of negotiating with his own detractors. Above clarifications are a part of it and it seems like many more changes are about to come.
photo credit: Indian farmer’s protest_art_.jpeg
