Farm Bill 2020; Myths & Facts

Before unveiling the pros & cons of Farm Bill 2020, I would like to draw a parallel
from the past, the dismantling of 1991 license raj, when India opened its hitherto
less explored markets to that of the international market, inviting much more
trade, investment & competition. As an outcome of 1991 reforms the per capita
income of India quadrupled, (within a span of 30 years), which only doubled in 40
years, (1947-1990).

Though this reform brought Indian markets and professionals at par with the
international market standards, however a major group went unnoticed of this
reform— the Indian agriculture sector.

Indian agricultural sector was almost shackled under the regulatory body,
Agriculture Produce Marketing Committee (APMC) Acts. Under APMC Acts, all
agro products were procured through mandis. These mandis converted into local
monopolies, hampering the regular rise in the income of farmers. Monopoly of
the mandis destroyed the agro world, incurring severe losses and rising debt to
the farmer class. We came across frequent cases of farmer suicide, as an
aftermath of it. Transparent price discovery through auctions was replaced by
collusion and price fixing. The mandi system also known as arathiyas, and
middlemen commanded substantial influence on farmers and agriculture sector.
Hence the system which was designed to protect farmers ended up severely
harming them.

2020 will be remembered as a watershed moment in India’s economic history,

much in the same way 1991 was, as this year marks the year where India’s
agriculture sector was finally unshackled and set on the path towards
modernization.

Experts assert that only 6% of all farmers benefited from public procurement at
MSP (minimum support price). The remaining 94% of farmers faced a vulnerable
situation in terms of selling their products. Neither enough incentives for
investments nor farmers had the power to bargain the food processing industry,
as policy actively discouraged aggregation of products and bargaining. Resultant
was that India processed merely 10% of its food production losing nearly Rs
90,000 crores annually due to wastage of products, owing to a fragmented cold
chain.

These are major concerns that this Farmers’ Produce Trade and Commerce
(Promotion and Facilitation) Bill, 2020; the Farmers’ (Empowerment and
Protection) Agreement on Price Assurance and Farm Services Bill, 2020; and the
Essential Commodities (Amendment) Bill, 2020 address the following based on
the recommendations of various government committees and reports:--

Instead of mandi monopoly, farmers will get multiple avenues to sell their
products to wholesalers / retailers of their choice with best of the offered price, a
competitive price market.

Farmers will be able to enter into agreements with food processors to grow
processable varieties generating good regular income. This will give the ‘Farming
as a Service’ (FaaS) a huge fillip. Such an upliftment will entice investments in
development of farming sector creating non-farm jobs too.

Despite being the largest producer of milk, the second largest producer of cereals,
fruits, vegetables and fish, India’s share in global food export markets stands only
at 2.3%, (a very low value addition). With these reforms India can emerge as a
food export powerhouse in global food supply chains.

These reforms aim to bring benefits to 43% of 500 million plus strong workforce
engaged in agriculture. Hence the lives of millions are supposed to be
transformed paving the path of an era of prosperity for Indian farmers.

But this Farm bill has some loop holes too, which can be misused against the
welfare of the small farmers. Like the contract farming may be misused by the
corporate/ investor against the farmer in contract. There need to keep a check on
the limit of access by the private investors (food processing brands/firms), so they
may not infringe the ownership of the original holders of the farms and its
products.
By Aparna Jha (Academic Content Writer, Web Content Writer)

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