The
unprecedented 23.9 per cent decline in the gross domestic product (GDP) in the
first quarter of 2020-21 is a serious issue. But gross value added numbers show
that, still agriculture sector grew by a respectable 3.4 per cent, giving ample
indication that if the recovery in the economy has to come agriculture and
rural sector will drive them.
In
order to deal with the consequences of Covid and the hardships, Modi Government
announced an ‘Aatmanirbhar Bharat’ package in May 2020. While most of the
measures pertained to addressing short term challenges, some big reform
measures on agriculture, disinvestment etc. were also announced.
Pursuant
to these announcements, the Central Government promulgated 3 ordinances on 5th
June 2020. They were The Farmers’ Produce Trade and Commerce
(Promotion and Facilitation) Ordinance, 2020; The Farmers (Empowerment and Protection)
Agreement on Price Assurance and Farm Services Ordinance, 2020 and The
Essential Commodities (Amendment) Ordinance, 2020.
These ordinances were a clean break from the past when pernicious
interventions by the Governments were justified in the name of farmers’
welfare.
The Supply Chain in farm sector
requires massive investment from warehousing, cold storage, transportation to
infrastructure in retail distribution. This mega push can come from private
sector alone. But unless we remove limits on storage; processing and value
addition will not happen. Indian agriculture has been moving from shortages to
surplus and the policy on essential commodities from the year 1955 is bound to
be reworked.
For
the agricultural sector, these reforms were similar to the 1991 moment for the
wider economy and were hailed as such by leading economists and experts. The
need for these reforms had been long felt. The ‘Committee of State Ministers,
in-charge of Agriculture Marketing to Promote Reforms’ in its final report in
had emphasized on the need for promoting competition in the interest of the
farmers and so had the of the Standing Committee on Agriculture in its sixty second report. Since these
reports were shorn of political positioning, it had the support of almost all
the political parties.
Now that the Government seeks to
replace the Ordinances by Acts of Parliament, Congress and some other political
parties and farmers unions affiliated to them and the interests of the
middlemen are raising a hue and cry. A relentless misinformation campaign has
been let loose by the opposition within and outside the Parliament. The most
sinister of them is that the Government will ultimately do away with the
minimum support prices (MSP). The Government has made it sufficiently clear
that there is no question of dismantling the MSP mechanism.
APMC and Mandi Act are in the
State's domain and therefore there is no question of Centre amending it
unilaterally. Only inter-state commodity trade is in Centre’s domain. Existing
APMC infrastructure is not being dismantled and as MSP is an administration
mechanism implemented through the local mandies and procurements being done by
the respective state government, it is going to continue as usual.
Though the purpose of MSP was to
provide an assured floor price to the farmers but over time it became the
ceiling price. With the new Act on facilitating trade and commerce of
agricultural produce, the Government is making it legally and institutionally
possible for farmers to explore the possibility of selling at even higher
price, while retaining the safety net of MSP. With competition from private
markets, APMC markets would no longer enjoy the monopoly and the farmer would
benefit from better services.
As far as the argument of farmers
losing their land to corporate is concerned, The Farmers (Empowerment and
Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 Act,
talks about an agreement on the farm produce only and not about the land. The
Act has further safeguards for farmers on land; in case of loss of produce, the
farmers alone will get the benefit of insurance compensation and the
infrastructure and equipment used at the farm land has been protected as
belonging to the land owners. Even the dispute resolution within the Act has
been delegated at the district level, with the formation of district boards
etc. and the farmers will not have to run from one Court to the other to get
justice.
Lack of responsible opposition has
been the bane of Indian politics since 2014. Anything that the Modi Government
does must be opposed by Congress party and its lackeys even when the Congress
led State governments advocate or themselves make such policies. Even in the
present matter the Congress Party in its 2014 and 2019 election manifesto had
promised these or similar measures.
All the three Bills, are
cumulatively for market reforms; giving options of new and national markets,
attracting private investments to build infrastructure, helping in better price
discovery, setting up information dissemination mechanism and providing future
price assurance to the farmers for their commodity produce.
With the Prime Minister himself at
the forefront to counter the misinformation campaign and the Bharatiya Janata
Party amplifying his messages, there should not be any doubt on the future of
these Bills.
Gopal Krishna
Agarwal
National
Spokesperson of BJP on economic affairs
gopalagarwal@hotmail.com
Excellent Post, It’s really helpful article
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