This opinion piece is to present certain facts based on the Data and Economics of agricultural reforms – the intent is NOT to support or oppose the new farm bills and also NOT to support or oppose any political party or any farmer union.
Facts – what are the 4 major changes these new farm laws bring in?
- Farmers in India will have the right to sell anywhere and to anyone who offers them the best price – including both government and private players
- There is no need for a farmer or a company to pay mandi tax if the mandis are not providing any additional services within their geographical boundaries – how much is Mandi tax – 8% in Punjab and 1% in Maharashtra !!
- Companies will only invest in infrastructure and food processing if they are given the freedom to procure and store whatever storage is required for their business. The new law allows for this which means more private investment to come in infrastructure, food processing, marketing and storage facilities.
- Companies engaging farmers in contract farming and providing crop advisory, inputs and assured buy-back will help the Rural Poor to move away from the clutches of the money lenders and Rural Rich.
What are the 4 major things which these laws do NOT talk about?
- Current MSP and Mandi System will change – NO these laws do NOT talk about this change
- Big Corporates will snatch away land from the farmers – NO – on the contrary, the law ensures that the land ownership cannot be changed from farmer to the private player in any case
- Private purchasers will reduce the price – NO markets (supply-demand formula) will decide the price – in – fact today also market decides the price in most cases except in Punjab and Haryana for wheat and paddy.
- The government will force farmers to do contract farming with corporates – NO – contract farming is FULLY OPTIONAL and Farmers may decide to avail it or NOT avail it based on their specific local needs. Today also many farmers do contract farming – just there is no nationwide common and legal structure for such contract farming.
If all is good with these farm laws why so many farmers are protesting against these laws?
Let’s try to understand with some facts –
- How many farmers are in India: 15 Crore (150 Million)
- How many farmers are marginalized who have less than 2 hectares of land: 86% i.e. 13 crore (130 Million)
- How many farmers in India take benefit of MSP (Minimum Support Price): 6% i.e. 90 Lakh (9 Million) farmers take benefit of MSP
- Who are Rural Poor and Rural Rich: A National Sample Survey Office (NSSO) report that mapped the income, expenditure and indebtedness of agricultural households in India in 2013 finds that for 70% of farmers monthly consumption expenditure is higher than their earnings from all sources, which means they are chronically in debt or say Rural Poor. Most of such farmers rely on Rural Rich – moneylenders, rich farmers and landlords to advance the money needed for cultivation and they are often forced to sell their produce to these financiers at lower than market prices.
- It is the rural rich, rural India’s ruling class, who pay no income taxes, who gain the maximum benefit from farm loan waivers, who reap the bonanza from MSP and Mandi system.
Are they the Rural Rich only who are protesting against agriculture laws? No it’s both Rural Rich and Rural Poor.
Rural Rich are protesting as they do not want to lose their position as powerful, controlling class of Rural economy and Rural society.
Rural Poor are Voiceless – they are the exploited lot – they are at at the mercy of Rural Rich, Mandi Agents (Adhatiyas) and AFMC corrupt officials and committees. They fear losing the clutches of Rural Rich – as the oppressed lot they always feel they need someone more powerful and rich to protect and help them, someone who is from their community, who is from their caste, who they can call any time. Of course, a large corporate or an agriculture startup will be seen as Alien compared to local Rural Rich. So, the narrative as projected by the rural rich (including by people who want to gain politically) that the Rural Poor will lose everything – is the only narrative the Rural Poor can understand and Government is not able to build an alternative and convincing narrative – hence the Rural Poor are protesting.
Are only farmers from Punjab and Haryana protesting and opposing these laws or it’s across the country?
At present based on the data available – looks like mostly it’s farmers from states like Punjab and Haryana are protesting. However, there are systematic efforts by various political parties and unions to thrust upon the new narrative of let’s follow Punjab MSP Model and get rid of all our problems – poverty, debt, reducing jobs etc.
Is Punjab model really working for Farmers? Especially for Rural Poor?
Let’s look at some data again –
- The average income of a farmer in Punjab is Rs. 2,16,706 per annum compared to Average income of a farmer in Uttar Pradesh which is Rs. 58,944 per annum.
- The total number of land holdings are 10.93 lakh out of which 2.04 lakh (18.7%) are marginal farmers, 1.83 lakh (16.7%) small farmers and 7.06 lakh (64.6%) farmers hold land above 2 hectare.
- The gross irrigated area in Punjab is 7.442 million hectare and the percentage of net irrigated sown area is 96.17% is this high percentage of irrigation – the same across the country? Of course not.
- Which states take benefit of MSP and Mandi scheme the most: Madhya Pradesh, Punjab, Haryana, Uttar Pradesh, Chhattisgarh and Telangana (Madhya Pradesh has already surpassed Punjab)
- A 2011 paper published in the Economic and Political Weekly suggests that rich farmers are to blame the most for the sustainability crisis facing Punjab’s agriculture.
Now lets looks at the data in Uttar Pradesh – The total number of landholdings in Uttar Pradesh are 224.57 lakhs out of which 175.07 lakh (78.0%) are marginal farmers, 31.03 lakh (13.8%) small farmers, and 18.47 lakh; (8.22%) farmers hold land above 2 hectares. In Uttar Pradesh 8% farmers can be categorised as medium or large farmers whereas in Punjab this number is 64% – then what’s the logic in comparing a farmer in Punjab with farmers in Uttar Pradesh or any other state. Despite being home to the richest and most investment-oriented farmers in the country, Punjab’s agricultural growth has fallen behind the national average. In 2012-13 Punjab was ranked 23 among 28 states in terms of agricultural growth. To be sure, this is not a one-off phenomenon and has been the case in most years since the 1990s.
Let’s accept the fact that Guaranteed Minimum Support Price procurements have prevented the state’s farmers from moving into high value agriculture after their initial success during the green revolution resulting into the sustainability crisis of Punjab’s agriculture.
What are the other problems which farmers in Punjab are facing?
Is Punjab free of farmer suicides?
A total of 16,606 farmers and farm laborers — including 9,007 farmers — committed suicide between 2000 and 2015 most of them in the Malwa region – 14 out of 22 states of Punjab – Sangrur, Bhatinda, Ludhiana, etc. The primary reason for these suicides is the Debt trap – for both agriculture and non-agriculture reasons such as Health* and Marriage spends.
Is Punjab becoming an epicenter of Cancer due to highly contaminated groundwater?
In the Malwa region, a large number of farmers have to spend a chunk of their earnings on health issues including cancer, which is quite common here. There is even a train that carries mostly cancer patients from here to a hospital in Rajasthan. Several reasons have been attributed to the high number of cancer patients in Malwa, Punjab, including highly contaminated groundwater.)
What about the pollution due to stubble burning?
Forget about Delhi – just ask any school child in Singrur, Punjab about pollution due to stubble burning – it’s unbearable.
So if it’s not the Punjab model which will help Rural Poor – what are the protesting farmers are really asking for?
The farmers especially Rural Poor in India (not only the protesting farmers) need assurance of the right Government support, the right policy framework, the availability of capital, and access to technology to move up in the ladder chain.
How the Protests can end? What’s the way forward?
If the Rural Rich and certain vested interests continue thrusting upon a narrative on Rural Poor how can the protests end in some logical conclusion?
First and foremost, both the farmer unions and central government should accept that such deep-rooted problems cannot be solved with the approach of “My Way or Highway”
Some practical suggestions-
- The government of India should use the 18 months “cooling off” period to address various issues raised by farmers before implementing the new farm laws – farmer issues need to be grouped into 3 major categories o Sustainability Agriculture and Livelihood Problems of MSP dependent states like Punjab and Haryana o Increasing Average Income for Rural Poor o Fear of Private Players “pushing” the marginalized farmers to the corner.
- Each of these categories of problems needs to be discussed in detail and a roadmap to address these issues need to be published – following are the steps to do so:
- Form specialized committees with appropriate representations from “Grassroot level” stakeholders – Farmers, Unions, Commission Agents, Agriculture Economists, NGOs, Self Help Groups working in respective fields, Village Panchayat Bodies
- Publish SOPs, bye-laws and Dos and Don’ts for private players – give more teeth to regulatory agencies to make sure that monopoly is not built in the system and farmers are not pushed to a corner in price game
- Take immediate trust-building measures by conducting workshops for protesting farmers explaining them various scenarios unleased by the 3 new farm laws
- Involve more neutral, accepted and respected people of the society – from all walks of life – political, religious, social and economic backgrounds to help farmers and government officers both understand facts and truths in As-Is condition
- As ex-Agriculture Minister – honorable Shri Sharadchandraji Pawar suggested to include more senior ministers such as Shri Rajnath Singh ji and Shri Nitin Gadkari Ji in the dialogue with protesting farmers along with the ministers already involved in the discussions
If the talks fail then who will lose? what will happen if there are no agricultural reforms in this country?
At present considering the claims of unions, looks like close to 3 lakh to 5 lakh farmers are actively protesting against these laws. If the much-needed agricultural policy reforms are not implemented in the next 3 to 5 years – there will be at least 10 times more farmers and their families protesting against established policy norms and governments irrespective of which political party is in power.
Current times are the only time the government has to avoid such outbursts of protests from the Rural Poor and to avoid a complete collapse of the Indian Rural Economy.
- About the author:
Gajanan Sakhare, PhD
The author has personally witnessed agriculture infrastructure and government support provided to farmers across the globe – India, USA, Canada and Europe. The author comes from the extended family of small and marginal farmers from Maharashtra and understands the plight of these farmers based on personal experiences. The author is also from a family of committed union leaders working for upliftment of low-income workers, so understands the plight of marginal workers and low-income government employees.
As a professional – the author works as a startup entrepreneur, loves Data Analysis as a subject and also works with various government agencies, organizations and also different political parties on the use of technology in healthcare, women safety and agriculture.