The Farmers Protest has put many of us to thought but do we still understand the Farm Bill 2020 completely? Here’s an explainer for understanding.
With so much reporting and even more misreporting being done about the ongoing agitation of farmers at New Delhi and its border areas, most of the mainstream media is more concerned with bringing out the so-called ‘drama’ of it. In fact, the fundamental question to ask is: Why have Indian farmers suddenly occupied the streets, both in anger and as a protest?
In the month September this year, three agriculture-related laws were rammed through the Parliament by the Central government led by BJP. These farm laws will change the way cultivation, sale & purchase, storage and pricing of agri-produce are done. Big business and traders will benefit while farmers and consumers will lose out!
What are these three laws and what do they mean?
1. The first one is Scrapping APMC Laws. Agricultural Produce Market Committees or Mandis are designated centres created by state governments where agri-produce can be sold by farmers to licensed persons or commissioned agents. Its purpose was to prevent fleecing of farmers by greedy and powerful traders and procuring food grain at Minimum Support Price (MSP) for distributing it through Public Distribution System (PDS).
So, what does it mean to scrap it? Firstly, as a result of this, agri-businesses and big traders will buy directly from the farmers at whatever price they offer. This means that the farmers will no longer get Minimum Support Price (MSP) for their crops. Secondly, the government will not procure enough grain to channelize it into PDS. Consequently, farmers and millions of poor people who are dependent on this rationed grain for survival will suffer.
2. The second law in the Farm Bill 2020 is concerned with the amendments in the Essential Commodities Act (ECA), which have turned it into a double-edged sword.
Historically, the ECA empowered the government to (i) Lay limits to the amount of stocks traders/companies could keep and (ii) Cap sale prices of the produce. The purpose was to prevent hoarding and black marketing by big traders.
The new law amended the ECA provisions, which means that now not only will all limits on stocks be removed but also there will be no cap on sale prices. It will also help big agro-processing companies to freely buy the food grains including perishables, disregarding any effect it may have on prices or their availability.
Traders can also hoard commodities to drive up prices as is often seen in onions and potatoes, which may well result into lawlessness. In short, it is nothing but a license to profit from hunger.
3. The third law in the Farm Bill 2020 is about Contract Farming. This law lays down how farmers can enter into agreements with sponsor parties, which are often big companies involved in agri-processing to undertake contract farming i.e. cultivating and providing certain specified produce in certain quantities, at a fixed price.
This will lead to farmers becoming dependent on sponsors for whatever prices they offer. Additionally, companies will also start pushing farmers to produce only certain kind of crops, like potatoes for chips or tomatoes for ketchup. This will ultimately lead to declined foodgrain output in the country and open the doors to other companies offering to import the food grain. In other words, the corporatization in agriculture will destroy farmers and put the country’s food security in danger.
Moreover, farmers will have to fight costly legal battles with these big companies in case of disputes. As an inclined tendency, big farmers will become focused to evict sharecroppers and squeeze agricultural labour to retain profits, and even get more.
All in all, it is safe to say that the only people benefitting from these laws will be big companies and corporate houses, and not the farmers for whom these laws will be no-less-than a death sentence!