Hundreds and thousands of farmers in India blocked roads and railway tracks on Friday in a protest against new legislation that they say could pave the way for the government to stop buying grain at guaranteed prices, leaving them at the mercy of private buyers. The farmers are concerned that the new bills would leave them on the mercy of big players. The concerns of farmers are justified.
Farmers across India have been protesting against three farm reform bills — The Farmers’ Produce Trade And Commerce (Promotion And Facilitation) Bill, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, and The Essential Commodities (Amendment) Bill — passed by the Parliament in the recently concluded Monsoon session.
The farmers are concerned that the new bills and mechanism of selling their products will leave them on the mercy of big business and large buyers. For them, new laws will increase the role of multinationals and big local players in agriculture. Many farmers saw this as a move to corporatization of Indian agriculture.
The issues and fears raised by the farmers include end of ‘minimum support price’ (MSP) regime in due course, irrelevance of state-controlled Agricultural Produce Market Committee (APMC) ‘mandis’, risk of losing out land rights under contract farming rule, reduction in price of farm produce due to market domination by big agri-businesses and exploitation of farmers by big contractors through contract farming provisions.
Under the BJP rule, the indebtedness of farmers has increased and due to the increase in the cost of the production, in which the government is increasing the price of electricity and diesel and the rest of the goods companies are selling, this indebtedness is increasing.
Now by involving farmers’ land in contract farming, companies will force them to buy fertilizer seeds at a more expensive price as per the new law. In India, farmers and landless are committing a large number of suicides, almost 2 farmers are dying every hour and the government is giving the slogan of self-sufficiency, but is handing over the interests of farmers to big companies.
As part of a nationwide shutdown called by India’s leading farmers’ organisations, the farmers held demonstrations in many parts of the country and blocked highways leading to New Delhi using trucks, tractors and combine harvesters.
The farmers held protests in Punjab, Haryana, Uttar Pradesh, West Bengal and other eastern states including Modi’s home state of Gujarat. The protests have remained peaceful but most growers, who hit the streets in large numbers, did not wear face masks despite a daily surge in coronavirus cases in India.
The farmers accused the government of trying to make traditional wholesale markets redundant. Farm leaders say India’s more than 7,000 regulated wholesale markets have played a crucial role in ensuring timely payments to growers.
The new law has made nearly 85% of India’s poor farmers, who own less than 5 acres of land, vulnerable to being shortchanged by private buyers.
The farmers are concerned that private sector will give them a good price for one or two years to show the advantage of new mechanism and rules, but they will be exploited in the long run. The farmers are asking the government to provide guarantee that the private sector will give them more than the government price.
The government insists the new rules give farmers the option to sell their produce to private buyers while it would still purchase staples such as rice and wheat at guaranteed prices.
But such assurances have failed to mollify millions of farmers who make up an influential voting bloc in states such as Punjab and Haryana – India’s northern farm belt which borders the capital New Delhi.
The Modi government is saying that the farmer should be free to sell to whoever he chooses, wherever he chooses, whenever he chooses. But what freedom does a small farmer really have when up against large food processors or retail chains that buy in bulk? Freedom is enjoyed by those who have market power, the power to manipulate the market and prices. The multinationals and big business has this power to exploit the farmers and to manipulate the private markets.
There are two ways to increase a farmer’s income. One is through higher productivity. The other is higher prices. The only way to get higher prices without hitting the consumer is by increasing the farmer’s share of the retail price. There are three ways of doing that: The government offers a minimum price guarantee (as with food grain) along with a price subsidy, or it mandates a minimum price (e.g. for sugarcane) that bulk customers (sugar mills) have to pay.
The third option is for farmers to organise themselves as cooperatives, cut out middlemen, and/or capture greater value by processing the raw output. Farmers cooperatives supported by the government through cheap loans to modernise the agriculture, establishing farmers’ cooperative markets and provide cold storage facilities could lift the is the way forward. The best example is milk cooperatives. The global success stories in cooperative action are California’s Blue Diamond almonds and Norwegian salmon.
In foodgrain, the subsidy allows the farmer to get a price that roughly equals the retail market price. In sugarcane and milk, the farmer’s take is up to 75 per cent. In comparison, the growers of TOPs (tomatoes, onions, and potatoes) and horticulture in general, which have a combined tonnage greater than for foodgrain, get barely 30 per cent of the retail price, on average. The rest goes to a succession of middlemen. Cooperative farmer’s markets can get rid of them from the exploitation of middleman.
Direct marketing efforts can take this up to 40 per cent. There are also crops where growers get as little as 10 per cent of the retail price, as experienced with coffee and bananas (both in Latin America.
Khalid Bhatti Ace News
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