Pavan K. Varma | At best, farm laws pass reform buck to big biz

As I saw thousands of farmers being teargassed and drenched by water cannons, and the mass of lathi wielding policemen and barbed wire barricades put up to prevent farmers coming to Delhi to protest against the recent farm bills, I was reminded of Tulsidas’ remarkably insightful lines in the Ramcharitmanas: Nahin kou asa janama jaga mahin, prabhuta pai jahi mada nahin: Never was a creature born in this world, whom power did not intoxicate. How else can one explain the arrogant manner in which the BJP government has handled the entire project of farm reforms? It is a classic case of hubris derailing even a well-intentioned attempt of change.

Firstly, it was the manner in which the three agricultural bills were passed in Parliament last September. This is a government with an overwhelming majority in the Lok Sabha, and a manageable preponderance in the Rajya Sabha. It is in a position on a simple numerical basis to get its legislative agenda through. Why then were these bills passed in a tearing hurry, without a structured discussion, through a voice vote, and without sending the bills for wider consultations and thorough consideration to the select committee?

Let us accept, too, that there is a need to replace the stranglehold of middlemen in agricultural trade and do away with the APMC Act. However, if the farmers are protesting the move it is not because they have shrunken craniums that prevent them from realising what is good for them. The question is not that agricultural commerce needs to be opened up, but what is going to replace it. The government says that removing unproductive middlemen and allowing farmers to sell to whomsoever they want is good for farmers. It will open the way for corporate India to buy from farmers, enhance business investment in the agricultural sector, facilitate healthy price competition and thereby increase farmer remuneration.

The fact of the matter is that, while this sounds great in theory, marginal and small farmers with less than five hectares of land account for 86 per cent of total farmers in India. No attempt has been made, as part of preparatory steps leading up to this reform legislation, to aggregate them or to encourage cooperatives. They have been given the freedom to sell outside the APMC, but given their indigent and scattered status, are without the power to negotiate the best deal for themselves.

It is true that there are only some 7,000 APMC mandis across the country, and farmers can theoretically sell to anyone they wish to. In fact, some states like Bihar, Kerala and Manipur have scrapped the APMC Act. But has the condition of the small and marginal farmers really improved in these states? The truth is that the old system — which does need reform — guaranteed to most farmers through the MSP, a minimum floor price for their hard earned produce. The much maligned middlemen or adhatis provide a support system to farmers for transporting their produce and selling it; they also are a part of a familiar socio-economic eco system available to farmers in times of need, such as a temporary loan for marriage ceremonies or child education. Now the assurance of the old system is being removed, and there is no explicit guarantee in the law for MSP.

Reforms, although necessary, need to be prepared for and properly transitioned. Suppose, the government made a peremptory announcement that henceforth everybody will travel in New Delhi only by public transport. The step can be justified as a ‘reform’ because it will save fuel, encourage savings, and reduce pollution. But the ordinary person will ask the basic question: is the existing public transport infrastructure good enough to meet this increased demand? If the answer is no, then people will protest.

The guarantee of MSP has led farmers, especially in Punjab and Haryana, but also elsewhere, to grow crops, such as paddy, even when government godowns are unable to efficiently store the grains, and rats consume a great deal of it. But why are farmers growing paddy in Punjab and other states? It is successive governments that have for vote bank politics guaranteed them free water and free electricity. Now that they have utilised this largesse to cultivate paddy, the government suddenly has a change of heart and says it will not buy, and wants corporate India to step in. A businessman, who is given certain inputs for production free, and encouraged to make a particular product which the government guarantees it will buy at remunerative prices, will change his production line to respond to such a situation. Suppose, after he has done so, the government says that its decision was wasteful, and it will not guarantee purchase, would not the businessman feel he has been cheated?

The agricultural sector is crying out for greater investment. The government feels that these farm bills will facilitate this but by the corporate sector. However, has the government come out with the requisite tax incentives and fiscal policies that will encourage such investment? Besides, there is a point beyond which governments — both at the centre and in the states — cannot abdicate their own responsibility. Systemic investments in modernising the food supply chain should have been made in much greater measure by governments. The buck is now being passed on to the private sector, on the uncertain premise that they will do what successive governments did not.

We need agricultural reform. But it must be done through consultation with the stakeholders and systematically prepared for. Teargassing farmers and intimidating them is not the answer.