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Farm Bills 2020

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Anant Chetan
Anant Chetan
An aficionado blogger and an engineer by profession. By qualifications, a Masters in Embedded System Design.

I was getting worried if Corona has changed the way politics in India work for real. Somewhere it felt incomplete. But finally after six or may be seven months of long dull and dark night, we witnessed the morning light; deifying Corona’s new normal. Last week I heard the words “chakkajam” and “protests” after a very very long time, and they sounded like sweet music to my ears. It feels like home now. Democracy is still alive! If it wasn’t for Corona, we would have been witnessing events like these every month if not ever week. Just imagine, how many “chakkajams” and protest we would have witnessed when private players were introduced in the railway sector or the space sector.

Not only the old normal is back on the streets, the parliament too witnessed a deja-vu moment. The millennials would have got an opportunity to witness the way parliamentarians used to behave not long ago. It was fascinating, be it Derek O’Brien, tearing up the rule book like a betrayed boyfriend tearing up the old love letters or Sanjay Singh being in a state of trance, climbing up the stage like a rockstar – commo-commo-raise your hands in the air and beat it!


But why so much noise all of a sudden? What’s the occasion?

Farm Bills!

Three farm bills were passed in the parliament recently and they are apparently the reason for all this. So, I tried to go through the bills and tried to understand what has happened.

Three farm bills, namely:

  1. Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020
  2. Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020
  3. Essential Commodities Act

People are fine with (2) and (3). No issues there. (2) provides a legal framework to the farmers to enter into contracts with the companies before the production even starts, providing farmers necessary security and (3) says that the government can invoke the Essential Commodities Act only if retail prices rise 50% in case of non-perishables and 100% in the case of perishable items from the average retail prices in the preceding 12 months or last five years.

The major issues are with (1). You could have a look at the pdf copy of the bill here.

The bill primarily allows farmers the freedom to choose; if they want to sell their produce in the APMC (Agriculture Produce Management Committee) Mandi or outside, specified as “trade areas” in the bill as mentioned in the section 3 of the bill. Other than this, the bill in section 6 makes sure that there are no fees (in whatever names) levied on any farmer or trader in the trade areas.

Is it a good thing or a bad thing?

License Raj or Permit Raj was held accountable for the stunted Hindu rate of growth for at least four decades, here rate of growth is in economic terms and not population and Hindu refers to the nation and not to the religion (not my choice of words, it is what it was called at that time). Isn’t it ironic that Manmohan Singh and his government in 1991 were hailed to dismantle the license raj in Industrial sector, however, Modi Government in 2020 is attacked as being anti-farmers for the similar act in agricultural sector? If Manmohan Singh’s Government’s action by getting rid of license system reformed the industrial sector then why can Modi government’s exactly similar action not reform agriculture sector? Is it because of the prejudices against Modi and BJP? It does not matter what BJP does, but we won’t support it. In fact, it does become a very pressing question to ask as to why, agriculture sector was not liberated like the industrial sector in the 90s? Who was benefitting from license raj in agriculture?

Now we exactly know who.

So far the farmers were forced to sell their produce only to the license holders. The state governments levied exorbitant taxes as per their will. Different states levied different taxes. Along with these taxes, middleman/ agents/arhatiyas charged hefty commissions. Punjab and Haryana take a big lead in imposing taxes. Punjab imposes the highest taxes on wheat and rice procurement across the country i.e. 14.5% on both. Haryana imposes 11.5% tax on wheat and rice. It comes second in the list after Punjab for wheat but third for rice, Andhra Pradesh imposes 12.5 % on rice. Over and above these taxes, the middleman “arhatiya” commissions are around 8.5%. Who was bearing these extra charges? With this bill, these fees and charges gets nullified. Now you know why protests are limited to Punjab and Haryana and now you also know who is protesting in the names of farmers.

Every election, there is a debate on farm loan waiver. Just before an election, Congress announces farm loan waiver for farmers, but keeps the conditions that leave farmers with such huge debt intact. The congress ruled state governments want the state monopoly in agriculture and the fees/taxes to be levied. Probably that’s why agriculture sector was left out of liberalization in the 90s. Monopoly was laying golden eggs for them. Every one knows who had the most number of state governments at that time.

On one hand, the Ashok Gehlot led Congress government in Rajasthan issued an order against center’s bill nullifying the Mandi fees at warehouses and the very same time, Randeep Singh Surjewala tries to patronize the farmers: “Farmers with small land holdings don’t have the money even to pay bus fares, how will they sell their produce in far-flung areas, as sought by these bills” I don’t know if he is presenting a report card of his parties flawed agricultural policies or trying to prove something. Congress’ corrupt parasitic policies are the sole reason as to why farmers are in this dismal condition. Moreover, private players behave very different than the state organizations. Private players would reach at the door steps of even the farmers with small land holdings in far flung areas before anyone else. Why? Competition! if one doesn’t the other would.

The bill nowhere mentions that APMC mandies would be dismantled or the Food Corporation of India (FCI) would stop procuring the grains or the PDS (public distribution system) would be changed. Also, the bill no where mentions anything about MSP, and for that matter, no bill in the past or present ever mentioned MSP for grains, there hasn’t been any law regarding MSP (except for sugarcane, and that remains unchanged even after this bill). So, why didn’t Congress who so eagerly wants a legal backing to MSP now, didn’t do anything about it in its tenure?

But this fear of these APMC becoming irrelevant is real. Why? Because they know when farmers have an option to make more money via paying less taxes, no fees and no commission, they won’t look towards APMC mandies. Why would they want to pay extra taxes and commission? For whose benefit? Would you? This is why the chaos. It is a farmer friendly move that makes a middleman irrelevant. They are the ones who are protesting along with the state governments.

The funny thing is that in India every body becomes a farmer or a poor on a need basis. P. Chidambaram is a farmer; he sold crores of Cauliflowers and that too by growing them in pots in the balcony. Or even better you can be a farmer like Amitabh Bachchan, The government-owned seed corporation registered him as a farmer member in 2010 and provided him with a hybrid seed program for his agricultural land in Kakori near Lucknow. Just so you know he was in trouble in 2007 because he bought agricultural land. Now you can understand why he became a farmer in 2010. Foul play! But anyways he is a farmer, can buy and sell agricultural land, he even has an ox, he calls him A.. Lets leave it there.

In few days from now, you will find Congress claiming that “it was our idea, we were trying to do this in 2012-13, you could see the debates, but Modi government’s implementation is flawed. We would have implemented it in a much better way”. True! if the Modi government just removes the four lines from the bill that are mentioned in m(ii) and keep the rest exactly the same, they would have had no problems with the bill at all.

While defining the “trade areas”, m(ii) says:

“private market yards, private market sub-yards, direct marketing collection centers, and private farmer-consumer market yards managed by persons holding licenses or any warehouses, silos, cold storages or other structures notified as markets or deemed markets under each State APMC Act in force in India are excluded from the trade areas

i.e. strict demarcation between private and public. The bill has no loop hole that could be exploited by any politician or corrupt bureaucrat or gangster/”bahubali” or middleman to control the free market. If Congress would have brought this bill, there would have been a loop hole for someone to exploit. It has always been. And the people with “contacts” are able to exploit them and people like me and you are left behind. You can pick any law enacted by Congress and read it carefully, you will find the loop holes. There are many examples for this. You can read about the Right to Education act 2009, which makes education compulsory and brings India in the league of countries where education is compulsory. Is that true? The definition of the compulsory education is different. Have a look at A Right to Unemployment.

This is one of the biggest reasons why I don’t like Congress. The more I read about their policies and reports the more I end up despising them.

Thanks for reading!!

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Anant Chetan
Anant Chetan
An aficionado blogger and an engineer by profession. By qualifications, a Masters in Embedded System Design.
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