Mandis Get A Union Rejig

A farmers’ agitation in Punjab and Haryana over agriculture reforms by the central government amidst the Covid lockdown seems to be gathering pace as peasants from more states like Uttar Pradesh, Madhya Pradesh and Maharashtra have already joined forces. At the core of the agitation are three ordinances—Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020, and the Essential ­Commodities (Amendment) Ordinance, 2020—which seek to open up the market for farmers, even as many states are yet fully bring into effect the model Agricultural Produce Market ­Committee (APMC) Act more than a decade after it was passed.

Agitating farmers in some parts of the country allege that small farmers are being cheated in the absence of APMC mandi safeguards. Denying the charge, Union agriculture secretary Sanjay Agarwal says “the system to ­ensure timely payment to farmers is very much there”. Defending the ­ordinances, which are to be tabled in Parliament as bills in the ongoing ­session, Agarwal says they “provide better options to farmers to sell their produce”. “In case of high-value ­products, which are related to industry, the ordinances provide farmers, specially small and marginal farmers, the safe option to tie up with industries for getting better and assured ­returns,” he adds.

Agriculture marketing is a state subject. Now the central government has got into it by using a clause in one of the ordinances that makes inter-state trade a concurrent subject. This allows someone in one state to approach a farmer in another state to buy his produce. “While some farmers will gain out of these transactions, a large number of small farmers may not benefit,” says Prof Abhijit Sen, a member of the now defunct planning commission. “More importantly, the ordinances are meant to cut out any charges on such ­purchases, whereas most state APMC Acts work on the principle that some part of the transaction will be paid to the mandi, which in turn helps the state governments to generate revenue. This applies even to produce not brought to the mandi.”

The change, according to Sen, affects three sets of people—the state ­government and the politicians (many of them see the mandi revenue as ­‘political class fund’). Besides state revenue, the mandis are often told to use their funds for improving ­infrastructure for better handling and storage of farm produce. Currently, all mandis have state government ­representatives on their managing committees or boards. The second lot are the mandi workers, including ­arhtiyas or middlemen. And the third are the farmers, particularly small ones too dependent on arhtiyas and the mandis for taking short-term loans. Even big farmers, who depend on high minimum support price (MSP) received only through government procurement schemes, have been hit in some states.

The RSS-affiliated Bharatiya Kisan Sangh (BKS) is also among those ­seeking changes before the bills are taken up by Parliament for discussion. BKS vice ­president Prabhakar Kelkar says the problem is traders can now buy from anywhere and sell anywhere, but there is no guarantee on payment for deals struck. “Earlier, as the traders operated only within the APMC mandi yards, where they had to be registered and reveal the market-discovered price (through auction) and the ­quantity transacted, and also had to place some money with the mandi ­authorities to protect farmers ­interests, the mandi authorities could act in favour of farmers when required. This security is now missing for ­farmers,” he adds.

According to Kelkar, a lot of farmers are falling victim to the malpractices of unregistered or unscrupulous traders, who first turn away small farmers, saying small quantities are unattractive, but later buy it at low prices once the farmers reach a desperation point after a long wait for buyers. “While the ordinance has provision for penalising errant traders in case of delay in payments, how can farmers seek recourse in law with no verifiable records of the transaction? How does one track an unregistered trader?” he asks.

Madhya Pradesh witnessed closure of all mandis for three days and a 200-km march by Congress supporters to protest against the hardships due to the ­ordinances. Bhoomi Bachao Sangharsh Samiti spokesperson Dr Shamsher Singh describes the ordinances and proposed bills as “slow poison” that would see a diminishing role of APMC mandis and a “death warrant” for farmers.

Crediting Sir Chhotu Ram as the ­architect of the model APMC Acts ­enacted in Haryana and Punjab, Singh says the current scenario would make most farmers vulnerable to exploitation, particularly if private sector and corporates hold sway through private mandis. Currently, hardly 15 per cent of cereals and a part of the pulses ­produced in Haryana are procured by government agencies from farmers (including small farmers who sell to big neighbouring farmers). As such, only they benefit from government-fixed MSP.

Many agriculture practitioners mooted that the MSP, currently fixed for hardly two dozen commodities, should be the set as the benchmark even for private sector buyers. Any ­violation should be penalised. This goes against the principal of price ­discovery that the architects of the ordinances have envisaged. Sudhir Panwar, a farmer leader and former member of the Uttar Pradesh planning commission, points out that while ­economic liberalisation had sought greater private sector investment through easing of storage norms and export-import policies, the new ordinances go further to hand over control to private sector traders and corporates. The ordinances are designed to “hand over ­entire production chain to the private ­sector through contract farming, trade through dissolution of existing mandi systems and finally ­deregulation of ­agriculture commodities markets by doing away with storage limits (for grains, etc) and intervention by the government through exim policy,” says Panwar.

T.N. Prakash, former chairman of Karnataka Farmers Commission, is upset over the infringement on the rights of states. “What was the necessity of the so-called agriculture ­reforms through the ordinance route, that too during the Covid lockdown, surpassing any debate inside and outside Parliament on such crucial issues like contract farming, overriding of APMC Act, etc,” says Prakash. “The ­ordinances and the proposed bills are clearly efforts to impinge on the rights of the state governments in agriculture marketing. The Centre should have ­restrained itself to Essential Commodities Act.”

The agriculture economist says there should have been more discussions with all stakeholders, particularly farmers. Chengal Reddy, advisor to the Consortium of Indian Farmers Association (CIFA), too feels that “the nitty-gritty of agriculture reforms need to be studied in depth and provision needs to be made for amendments as and when required”. This is one of the points he has placed before the prime minister through Niti Aayog.

Reddy feels there is some justification for changing the working of mandis. But instead of bureaucrats and politicians, he thinks elected farmer representatives should manage APMC mandis to ensure better price discovery and payment to farmers. Experts are unanimous in their demand for proper maintenance of records of all traders to ensure better protection of vulnerable farmers. The provisions and safeguards in the ordinances are inadequate to protect farmers interests on many counts, they feel.

As the agitation spreads, this could only be the trailer as the actual impact of inadequacies in the new system may come to the fore when the harvested crops start arriving in mandis in larger quantities..