New Delhi: The Union Cabinet on Wednesday cleared three Ordinances with the avowed intent of helping the farmers, though they will actually benefit the traders and the middlemen, who constitute the main vote bank of the ruling BJP.
This is because 85% of the farmers are small or marginal with no deep pockets to take advantage of the proposed changes. To begin with, the Essential Commodities Act is to be diluted by removing food grains, onions, potatoes and other farm produce from its ambit. Information & Broadcasting Minister Prakash Javadekar and Agriculture Minister Narendra Singh Tomar asserted at a Press briefing that this will help the farmers and give a historic boost to rural India, while the truth is that it is a sort of ‘protection’ for traders who are often harassed for hoarding of stocks, to push prices.
Asked specifically whether this decision won't lead to inflation and unbridled hoarding, the two ministers insisted that the farmers will be able to produce at a lower cost; so, not only will they gain but consumers will also benefit from the lower prices. The second Ordinance will allow traders, wholesalers and companies to enter into agreements with farmers on the price they will get for their produce even before sowing.
The ministers claimed this will guarantee an assured return to the farmer, irrespective of the vagaries of monsoon. Again, the real benefit will be for the traders and other buyers, as the agreements will oblige the farmers to sell their complete produce to them and none else, thus ensuring no fluctuation of prices. The third Ordinance purportedly lays the foundation for "one nation, one market," so that farmers can sell their produce anywhere in the country and are not bound to sell it only in State-controlled Mandis. But this goes against the thrust of the second Ordinance which binds the farmer to sell only to buyers contracted before sowing, detractors point out.
Moreover, a small farmer can't think of transporting his produce to a far-off State – say, from Punjab to Andhra Pradesh, where he can get a better price. So, the actual beneficiary will be the trader and the "adatiya" (middleman) who alone can book trucks and quickly ferry the produce to places where they are assured of a better price. Still worse is the decision to bar courts from intervening in any disputes between traders and farmers, by making the district collector and the sub divisional magistrate (SDM) the adjudicating authority in the disputes.
The agriculture minister inadvertently indicated that the government's intention is to bring private investments in agriculture in a big way, which is non-existent as of today. He said there are no more than 20 to 30 licensed traders in a Mandi, but by allowing farmers to take their produce outside, it will clear the decks for exposure to a big marketplace. Anyone with a PAN card can buy from the farmer outside the Mandi, with no tax on the transaction.
According to Agriculture Minister Tomar, the agreement on price, even before sowing, will promote collective farming. So, 50 or 100 small farmers may sign up to produce a particular crop only, with the trader or the company giving a guarantee to buy the full stock. He said the ministry will draw up the agreement on the guaranteed price. So, companies like Pepsico can benefit by enrolling the farmers to produce only potatoes of a particular variety for its chips.
The minister said the minimum price will be thus fixed in advance and if the produce attracts a higher price in the market, the mechanism will ensure the farmer gets a part of it. Tomar said the Ordinance throwing open the entire nation for sale of farm produce is not an amendment but altogether a new legislation. Asked whether it would curtail the state’s powers, he said inter-state trade is in the Centre’s domain; moreover, the laws of the states will continue to apply to trading within the Mandi; the Ordinance only opens up trading across the country.
