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  • Raghav Sand

Winners and Losers of Agricultural Reforms

The Indian agriculture sector has been the fiefdom of middle men for way too long. The methods and procedures have discouraged market economy and price discovery. It is important to know who is making what noise at the time of these reforms.

Most Indian farmers have marginal land holdings and have the burden of debt servicing. They are at the mercy of loan sharks, and have to content with Agriculture Produce Marketing Committees (APMC) power play. These committees charge as much as 4-6% commission in states like Punjab and Haryana; in other states it ranges between 1-2%

At the current moment, Government has surplus stock of food grains and cereals, and storage is a big cost. Reforms of this scale and magnitude have the potential to cause tectonic shifts in the politics and economics of the farm sector. The APMC and their office bearers have amassed unreasonable clout in some parts of the country and dictate key policy decisions.

State governments also have a say in the protests, as the tax from APMC generates revenue. Changing the status quo will affect coffers of the states and it will loosen their grip over a marginalized section of society.

aerial shot of green milling tractor

Union Agricultural Minister Narendra Singh Tomar stated that the bills were in the interests of farmers. He added, that the farmer will have a choice to take his produce outside his state, or sell it to the respective states’ APMC. “After these bills become Acts, the competition will increase and private investment will reach villages. Farming infrastructure will be built and new employment opportunities will be generated. It will encourage the export of agricultural produce. Through these reforms, a farmer can connect with big traders and exporters to make his farming profitable,” he said.

Now, let us look at the key provisions of these legislations

Bill on Contract Farming

The Farmer (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020

  1. Farmers can enter in to agreement for sale of future agricultural produce with person or entity of their choice; this will eliminate middle men and help in recovering a higher price.

  2. Transferring the risk from farmers to sponsors.

  3. Grievance redressal mechanism.

Bill on the Agriculture Market

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020

  1. Farmers can sell their produce outside the APMC

  2. Promotion to inter-state and intra-state trade & commerce of farm produce

Any law passed by the Parliament has to prove its effectiveness on the ground. Even if the farmer seems to be beneficiary in the long term, the Governmental agencies and department must keep vigilance on implementation, so that the legislation is followed in letter and spirit.

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