Pay farmers before delivery of crops to avoid rows under new Acts: Paper

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Amid the ongoing farmer protests at Delhi's borders against the three farm Acts, a discussion paper presented at a National Dialogue on Indian Agriculture in 2030, organised by NITI Aayog and Food and Agriculture Organisation (FAO), has said that farmers need to be paid on the same day either in cash or electronically before the delivery of their produce in a trade area (which is classified as an area outside the jurisdiction of a regulated APMC under the new acts) to lower the possibility of disputes and also eliminate the chances of going to a sub-divisional magistrate for settlement.

It also called for better oversight and regulation for trading on an electronic platform as facilitated by the Acts which could be in the form of some agency or intermediary that could facilitate transactions between farmers or aggregators with the buyers.

The paper which has been written by Seema Bathla and former Aagriculture Secretary Siraj Hussain, said that while the three agriculture Acts will have far reaching impact, the state governments on their part need to draw up a blueprint for the entry of the private sector in agriculture markets and push for speedy implementation of regulations specified in the respective Acts.

The paper also said that appropriate institutional arrangements have to be formed for aggregators, Farmer-Producer Companies (FPCs), Self-Help Groups (SHGs), co-operatives and agri-startups that help in reducing the transaction costs of farmers and providing them grading and standardization facilities.

“Such interventions have to be supported through adequate finance such as the support given by NABARD to the FPCs. The role of the Warehousing Development and Regulatory Authority (WDRA) will be crucial,” the paper said.

Th paper said that since the business in the trade areas is going to be deregulated entirely as provided by the Acts, it is necessary to make registration of warehouses with Warehousing Development Regulatory Authority (WDRA) mandatory so that the privately-held stocks in warehouses are known to the government.

“This will help the government to take informed decisions and intervene in markets to check hoarding of commodities and price fluctuations that could be detrimental to consumers’ interests,” the paper said.

One important concern is that the warehouses and factory premises may apply for denotification and sub-market yards in order to take advantage of the zero tax structure, which will lead to states bearing some loss of revenue because of trade moving out of their jurisdiction as well as losing out on the market fee that was earlier levied on every transaction.

Thousands of farmers, mostly from Haryana and Punjab, have been protesting at several border points of Delhi since November 28 last year, demanding a repeal of the three laws and a legal guarantee to the minimum support price (MSP) system for their crops.

Enacted in September last year, the three laws have been projected by the Centre as major reforms in the agriculture sector that will remove middlemen and allow farmers to sell their produce anywhere in the country.

However, the protesting farmers have expressed their apprehension that the new laws would pave the way for eliminating the safety cushion of the MSP and do away with the "mandi" (wholesale market) system, leaving them at the mercy of big corporates.

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