Marketing reforms

The limited response to the farm unions’ call for a stir against the Centre’s agricultural marketing reforms is a clear indication that these have been received well by the bulk of the farmers. In fact, the volume of the farm goods business in regulated markets has already plunged by over 40 per cent since the grant of permission for out-of-mandi transactions in June. The opposition to these reforms seems largely an outcome of disinformation being floated by politically aligned farm unions about their potential impact on growers. They are falsely projecting them as a precursor to the abolition of the minimum support prices (MSP) regime and a doorway to corporatisation of Indian agriculture. Not surprisingly, the agitation has remained confined primarily to states like Punjab, Haryana, and a few others where most of the marketable produce, notably that of wheat and rice, is picked up by government agencies at pre-fixed floor prices.

These long-overdue reforms, introduced through three Ordinances on June 5 and now presented to Parliament for enactment of laws, seek to offer greater choice to cultivators to sell their produce to whoever and wherever they can realise better prices. The monopoly of the markets run by Agricultural Produce Marketing Committees (APMCs) has been dismantled by permitting out-of-mandi transactions of farm goods. Establishing private agricultural markets is also allowed to offer competition to the APMC mandis. Besides, the existing powers of the Centre and state governments to impose stock-holding and movement restrictions on agricultural commodities have been curtailed by amending the outmoded Essential Commodities Act, 1955. This apart, contract farming, which facilitates better linkages between producers and end-users of the produce, has been legalised to protect the farmers’ interests.

However, the onus of dispelling misgivings about these reforms is on the government. Not much has been done to properly explain their objectives and implications for the farmers. The unease over the fate of the MSP, for instance, has arisen from an observation made by the Commission for Agricultural Costs and Prices (CACP) in one of its reports that this system should be gradually phased out. But the government has not been prompt in pointing out that it had no intention of doing so. In fact, it is imperative for the government to procure grains to run the public distribution system and meet its obligations under the food security law. Similarly, not enough has been done to explain that contract farming is different from corporatising agriculture, which is disallowed in India. The new law only provides legal validity to mutually agreed contracts.

That said, the fact also is that these reforms do not automatically preclude the typical harvest-time price meltdown, which is the real bane for growers. The government’s flagship price and income assurance scheme, the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-ASHA), announced in the 2018 Budget, has made little headway. The three price support mechanisms mooted under this scheme — price support through direct procurement, price deficiency compensation, and procurement and stocking by private parties — have remained largely on paper in many parts of the country. The debate in Parliament over the Bills concerning these reforms is an appropriate occasion to come clean on these issues. But the clarification and awareness campaign must be carried out outside the House as well.


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