Arjun S Mohan
The Government of India brought in three ordinances in the first week of June 2020 that sought radical changes in the country’s agrarian market. The Farmers Produce Trade and Commerce (promotion and facilitation) ordinance redefined the ‘trade area’ and also enabled barrier-free intrastate trade. The Farmers (empowerment and protection) Agreement on Price Assurance and Farm services ordinance included protective provisions against exploitation and the Essential Commodities (Amendment) ordinance was about withdrawing the government from controlling the prices of certain essential commodities in the market. On 20 September, the bills were passed by the Indian parliament despite strong protests from the opposition parties.
Agriculture falls under the State List and Agricultural Produce Market Committee yards (APMC) were set up by several states to manage the trade of agricultural market produce. For each of the crops, a minimum support price (MSP) was guaranteed and the trade was conducted according to it. There were several barriers in intra-state trade as well. Now, the new reforms are aimed at deregulating the market so as to encourage more private parties to step into the field.
The provisions in the Farmers Produce Trade and Commerce (promotion and facilitation) bill allow the farmers to hand over their produce to the traders anywhere outside the APMC yards. The Farmers (empowerment and protection) Agreement on Price Assurance and Farm services law includes measures to sustain the MSP regime from a legal standpoint by ensuring judicial protection at the district level and the Essential Commodities (Amendment) law withdraws the government from deciding the price of several essential commodities except in emergency situations like war and famine. The government believes that a confluence of these new steps would assure competitive prices for the farmers.
What does the history say?
Sadhanandhan, a grandfather of four, who has been a farmer since his childhood, recalls the phases of changes in Kerala’s paddy-market since the 1960s. The first three decades of independent India witnessed many successful and unsuccessful attempts at Land redistribution. Agricultural land was redistributed to the workers from landlords. Kerala, as one among the states that completed the procedures, stood confused with the radically decentralized cultivating methods. When farmers as single individuals engaged in the trade, there were a number of reported cases of cheating and exploitation by the middle-men. The role of a proactive state became necessary and the ‘government intervened’ by introducing the MSP for paddy. Though the rate of exploitation came down marginally, the demand also fell down. This forced the farmers to sell their produce below the prescribed MSP. The state was again ‘convinced to intervene’ and set up a channel of engagement between the farmers and traders where MSP was guaranteed. Later, the financial transaction was also facilitated by the state.
Mohanadas, son of a veteran farmer narrates how the farmers were exploited by the middle-men and early corporate. After the redistribution of land, some of the major mills and traders grew big into famous companies and brands. Eventually, the smaller ones declined completely and a monopoly was established by the bigger ones. They began to fix the price together and assigned their local representatives in rural villages to trade with the farmers. This seemed a convincing narrative of how a ‘middle-man strata’ was formed in the agrarian market.
Limitations of APMC Yards
In other states of India, especially in the north, the same kind of incidents necessitated the intervention of the government, and APMC yards were finally established. Farmers were allowed to sell only in that particular ‘trade area’ so as to force both the traders and farmers to meet under a surveilled system where MSP was guaranteed. Unfortunately, as the Standing Committee Report on Agriculture (2019) chaired by Hukmdev Narayan Yadav observes, APMC yards weren’t implemented in their true sense (Yadav 2019). The average area served by an APMC market is 496 sq. km while the National Commission of Farmers (2006) headed by M.S. Swaminathan recommended this to be not more than 80 sq. km (Swaminathan 2006).
Figure 1 – Average proximity of an APMC Market in India
Farmers falling in the blue part of figure 1 are the most vulnerable in the current scenario. The symmetry is quite simple; as Yadav observed, the APMC markets are still not established in their ‘true sense.’ If the governments could have arranged a market in every 80 sq. km as Swaminathan recommended, the rate of middle-men exploitation would be very less.
The Question of middle-men and Kerala’s alternative
The question of middle-men exploitation and the argument of the Union Government has to be scrutinized. The Union Government argues that the new reforms stand as a barrier to middle-men intervention. The phrase ‘middle-men’ could be changed but their position could not be ousted from this value chain in a free market. A Corporate monopoly will eventually emerge in an open market just as what happened earlier with big mills in Kuttanad. It is impossible for these entities to meet the rural farmers directly during the trade. The companies will assign their representatives or employees to procure the crops from the farmers. These people are paid from the same value chain. Their salary or stipend goes to the same account as what the middle-men had earlier.
The state of Kerala stands first in guaranteeing the highest MSP for paddy in the whole nation. Even though there are no APMC markets in Kerala, it is the government that acts as a middle-man between the farmer and the trader. The state also engages as a mediator in financial transactions and this mechanism ensures hustle free trade between the two parties with a guaranteed MSP. This particular framework could also oust the role of a middle-man as any democratically elected government is altruistic in a business.
There is a fundamental difference between a ‘government-controlled market’ and a free market in agriculture. Unlike the government, it is not compulsory for the private party to procure the produce from the farmer. After gaining a monopoly in the market, the corporate can decide whether to take the crops or not. The grains could not be stored for a longer time and if there is no surety about the trade, the farmer would eventually compromise with the price. So, in the absence of a robust government mechanism, this situation will force the farmers to sell their produce at the price offered by the trader.
Judicial responsibility and Pragmatic possibility
When the Farmers Produce Trade and Commerce (promotion and facilitation) law mitigates the ‘executive arm of government,’ The Farmers (empowerment and protection) Agreement on Price Assurance and Farm services law assigns the judiciary to protect the farmers from exploitation. A judicial body at the sub-district level and an appellate one chaired by a district magistrate (district collector) are ought to deal with any grievance regarding possible disputes. The judiciary should also resolve the issue within 30 days or else, the trader has to compensate the farmer. The proposed system looks better at the surface level.
Farmers’ organizations are not convinced and are concerned about the possible corruption in the system as the appellate court is headed by a bureaucrat (district collector). This argument deserves attention as India slipped two ranks down to 80in the corruption perception index of 2019 (The Hindu 2020). They fear that farmers being a fragile category will not have a level playing field against financially strong opponents in the court. Also, our judicial system is already facing enormous criticism due to backlogs. This would be an extra burden for the judiciary.
Dilli Chalo – A Class Struggle?
The NDA government stands stubborn and believes that the new reforms will be profitable for the farmers. Their agenda stands questioned as the laws were introduced in the first week of June, a time that predicted the fall of capitalist-corporate economic spheres around the world. As the post-COVID-19 economy was expected to gain back its momentum only after a few years, these corporate-friendly laws seem very doubtful as the food market is the only market left with consistent demand.
The study conducted in and around the outskirts of Kuttanad pointed out that those farmers from different political spectrums unilaterally oppose a deregulated market. Surprisingly, even those who openly supported BJP could specifically oppose the provisions of the bill. Middle-aged farmers were more conscious about the possible exploitation of private players as they have engaged with big mills earlier. These two factors help in relatively determining the character of the recent surge in North India and uncover the rural sociology of peasantry that leads the current ‘class struggle.’
New Delhi is witnessing the biggest ever democratic struggle of the post-independent period and could be definitely termed as a ‘class struggle’ led by farmers from Punjab, Haryana, and other nearby states. Solidarity announced by several labour unions underlines the resounding ‘class consciousness’ of the movement. Along with workers, students and other well-wishers had also joined in hands with the farmers. Unlike the Shaheen Bagh protests against the Citizenship Amendment Act (CAA), a class schism that unifies the proletariats is the evident strength of this movement.
Farmers also demand the withdrawal of the Essential Commodities Amendment Act which restricts the government from controlling the price of essential commodities like cereals, pulses, edible oils, and potatoes except in emergencies. This law might allow hoarding on large scale and could directly affect the lives of common people. Thus, the current class struggle completely equates to a people’s movement with a democratic colour. After several rounds of discussions with the centre, the farmer unions stand firm on their demands. The mass movement strongly appeals to the Union Government to withdraw the laws with immediate effect.
References
Swaminathan, M. S. (2006): Serving Farmers And Saving Farming, New Delhi: Ministry of Agriculture, National Commission on Farmers, available at http://agricoop.nic.in/sites/default/files/NCF3%20%281%29.pdf
The Hindu (2020): “India slips two places on global corruption perception index,” 23 January, Retrieved from thehindu.com: https://www.thehindu.com/news/national/india-slips-two-places-on-global-corruption-perception-index/article30634389.ece
Yadav, H. N. (2019): Agriculture Marketing and Role of Weekly Gramin Haats, New Delhi: Standing Committee on Agriculture, available at http://www.indiaenvironmentportal.org.in/files/file/Agriculture%20Marketing.pdf
The author currently pursues post-graduation in Politics (Public Policy and Governance) at the School of International Relations and Politics, Mahatma gandhi University, Kerala, India. He has contributed articles to studentstruggle.in, indianfolk.com and standpointindia.in. Email arjunsumo@gmail.com
