HRW Day 2: Critically Evaluating Farm Bills (Report)

Critically Evaluating Farm Bills
with Mekhala Krishnamurthy 

Human Rights Week, Day 2

Session: Critically Evaluating Farm Bills

Speaker: Mekhala Krishnamurthy 

Date: 11 January 2021

Time: 4-5:30pm

Moderator: Rohit Gupta. 

"If agriculture goes wrong, nothing else will have the chance to go right in the country."

~ M. S. Swaminathan

The Indian government enacted three acts in 2020:

* The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020

* Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020

* Essential Commodities (Amendment) Act, 2020

These acts were passed by the parliament of India but soon after it was met with protests by certain sections of the farmers. A day after the session, on 12 January 2021 the Supreme Court stayed the implementation of the government's 3 laws and constituted its expert Committee of 4 members.

As citizens of India, it became extremely important for us to understand the Farm Bills and critically evaluate them. As rational individuals, it was very essential to know different perspectives, dimensions, the legality of the bills.

The resource person was Mekhala Krishnamurthy who has done extensive research on the mandis in Madhya Pradesh ( her detailed observations about these mandis were expressed throughout the session).

As the majority were urban people having no touch with the ground reality, it was wise of the speaker to start the session by introducing some basic terms like economic market, production, marketing, processing, consumption, exchange, circulation, distribution, spot market (places where mediate exchange is in cash) and future markets ( include physical and electronic markets ) etc.

India is a mix of consumption and distribution. There are primary, secondary and tertiary markets. Site of exchange can be a place wherever exchange of goods takes place, for example, a village.

A mandi is a marketplace where multiple buyers and multiple sellers are situated. Trader, seller, buyers, intermediaries, agents, etc are also involved in a mandi. A 'Palawalabai' mixes the grains and a 'dharmakaya which is extensively used to measure grains was shown via pictures.

The role of the central government in agricultural matters was discussed as agriculture falls under the state list. The National Rural Employment Guarantee Act ( NREGA ) promises certain incentives and labour to the poor sections of society. The speaker also made us aware of how the Agriculture Produce Market Committee ( APMC ) safeguards producers by encouraging competition between multiple buyers including the state. APMCs have become extremely politicized and have no state regulation. The revenue generation is in the form of fees, taxation etc.

The origin of regulated markets are :

* Royal Commission on Agriculture, 1928

* Berar Cotton and Grain Markets Act, 1897

* Bombay Cotton Markets Act, 1927

* The Five Year Plans after independence.

* State Acts and Local Market Committees.

In India, approximately 86% of the farmers are small and marginal. We have poor producers and poor consumers. Both, the producers as well as the consumers need to be protected. India has a large number of producers but they are small in nature. There is a small number of buyers and a large number of sellers. 

In India, a farmer has to "discover the price" for their goods. They do not have the liberty to decide the prices. Therefore they are "price takers".

Terms like Freedom, Competition, Choice, Access, Income, Accumulation, Exploitation, Wealth, Welfare, Security and Sovereignty and the issues around them were also mentioned and discussed in the question-answer round.

There is a need for a fast dispute resolving mechanism. Competition must be increased so that there are a large number of buyers.

The speaker made us aware of how regulated exchange takes place inside a mandi which acts as a safeguard. 22 states have provisions to operate outside mandis in the form of contract trade. The state has a key role in developing marketplaces to reduce risk mitigation.

India is a diverse, complex and changing nation. The implementation of agricultural laws is different across different states as agriculture is a state subject. There is uneven implementation of agricultural laws across states.

According to the Dalwai Committee Report 2018, India was short of 4000 mandis and 27,000 rural markets need severe attention. A major problem is that a few players control the whole market. There needs to be a decentralised system. 

Minimum Support Price ( MSP ) is very important as a lot of farmers depend on it to a great extent. It is the government's assurance to farmers. MSP acts as an insurance and risk mitigation for their produce. 

India on paper has the best public health system but in reality, it has the worst allocation system and highest out of pocket expenditure ( refer to Human Rights Week Day 3 Report on PSA's Blog ). Markets deeply adapt to the political economy but MSP finds no mention in the recent laws.

The speaker spotted a loophole in the Essential Commodities Act which allows traders to store and stock grains. All the 3 acts presume that all are 'good people' as it does not have provisions for absconding traders nor securities. On being asked a question, Krishnamurthy opined that the timing of the laws was a problem, also the laws should have been thoroughly discussed and debated in the parliament rather than rushing through them. As agriculture is a state subject, the Central government making laws on it was also a problem and did not go down well with certain sections.

As Krishnamurthy had done extensive research on mandi life in Madhya Pradesh, she gave an example on how 8 crore farmers were not paid by traders, the farmers went to Sub Divisional Magistrate with their complaint but the SDMs aren't equipped to deal with agriculture distress calls and they contacted mandis to help solve the issue.

Krishnamurthy also pointed out that since farmers can carry businesses outside of mandis, they are at a greater risk of losing out. Instead of giving them a regulated market, the laws put them in a quagmire. The laws do not say anything about MSP. According to her, the centre and states should come together and in collaboration plan and phase out agricultural laws.

A question was raised on how do markets differ in Bihar and Punjab? Landholdings in Bihar is smaller as compared to Punjab. Also, the type of crops sown differ to a greater extent. The difference in business and policies and the state's role is also noticed. Punjab is a 'state without a market' and Bihar is a 'market without a state' - neither situation is ideal.

Global crises also affect farmers. For example, recently bird flu incidents are being reported from across India. Sometimes, rumours, misconceptions have resulted in unnecessary culling of birds, which severely affect the farmers.

According to the United Nations Development Programme, up to 40% of food produced in India is wasted and 50% of all food across the world meets the same fate. The Agriculture Ministry stated that 50,000 crore rupees of food produced are wasted every year in India. There needs to be an urgent policy and implementation to deal with the food crisis and waste management so that every grain reaches the poor and the hungry.

Markets adapt the structural conditions and relations of production and consumption in terms of scale, commodity specificity and inter-linkages. Mandis play a physical and distinctive role in the marketing system. Competition and not disintermediation is required. In a high volume, low margin business, channel command and consolidation is the goal for large scale players. Regulation cannot substitute for public investment and the state's role in developing market ecosystems.

Krishnamurthy explained to us farmer's income does not just depend on price, one needs to consider other supplementary factors related to it like which food items are grown - is it grains, vegetables or perishable items. How is their economic structure? Sometimes more loans indicate that farmers are rich ( more disposable income) and hence they can take loans to develop their farming. The farming economy can have a domino effect on the whole economy.

Towards the end, Mekhala Krishnamurthy mentioned the book "Squeezed: What You Don't Know About Orange Juice" by Alissa Hamilton. The book explores the history of processed orange juice and the forces behind its emergence as an American breakfast staple. Consumers need to know what they're consuming.

To conclude, as rational human beings it is very important for us to know, evaluate and understand different perspectives to one issue rather than get carried away by emotional sentiments. PSA has managed to address an ongoing issue and help people get an understanding of the 3 farm laws, mandi life and the positives and negatives associated with it.

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Report drafted by PSA's Vice President Aniruddha Phadke from TYBA Political Science and PSA's Treasurer Keisha Singh from FYBA.