Agri Reforms Necessary Or Futile for Farmers? Experts Weight In

Do the agricultural reforms announced by the government help farmers?

In the third tranche of the Centre’s announcements to redress the impact of the lockdown on the economy, Finance Minister Nirmala Sitharaman, on 15 May, unveiled a slew of measures for the agricultural sector, where the farmers are facing an acute crisis.

The measures included a Rs 1.63 lakh crore stimulus, encouraging contract farming, and amending the Essential Commodities Act (ESA) to remove cereals, edible oil, oilseeds, pulses, onions and potato from its purview, aimed at easing the marketing of agricultural produce.

But the suggested reforms have virulently divided the experts on whether or not they can aid farmers in the immediate crisis.

While some like Ashok Gulati, the former Chairman of the Commission for Agricultural Costs and Prices praised the reforms for lifting the monopoly and consumer bias in agricultural markets, some others like Sompal Shashtri, former Union Minister of Agriculture believed that the state’s intervention was required to protect farmers from being exploited.

The Quint spoke to experts on agriculture who are of the opinion that none of the measures suggested by the government address the immediate concerns of cash-strapped farmers.

‘Reforms Unshackle the Farmer from Pains of Mandis’

Ashok Gulati, an Indian agricultural economist and a former chairman of the Commission for Agricultural Costs and Prices, hailed the legal reforms. He said that the Essential Commodities Act have been depressing the price of the commodity during the harvest.

“The three legal reforms, Essential Commodities Act, APMC act, contract farming are basically to unshackle the farmer from the pains of mandi systems, pro-buyer and consumer bias in the system. Production happens only once, but consumption goes on throughout the year, so somebody has to store to feed us throughout the year. When storage facilities are not enough, the prices of the produce go down after the harvest because the farmer cannot keep the produce with him.”

Ashok Gulati, Former Chairman of the Commission for Agricultural Costs and Prices

‘Legal Amendments Necessary But The Govt isn’t Diligent in Details’

Vivian Fernandes, a senior journalist who runs an agro-focussed website called Smart Indian Agriculture, was of the opinion that while these reforms in themselves maybe helpful, it’s the implementation that we have to watch out for.

“The APMC Act amendment is required. The government have been trying to persuade the state to amend it since the 2000s. But for various reasons states have been reluctant to do that. Now I don’t know if it’s right for the government to bypass the states. While these measures are good, they shouldn’t be implemented the way GST was. These are all very ambitious projects that grab headlines, but the government often falters in the implementation. They are not very diligent in the details.”

Vivian Fernandes, Senior Journalist

But he also said that these may not serve any immediate purpose for the farmer.

“The government announced reforms in agriculture marketing and investment in core services but if I'm not able to produce in the next season what am I going to sell? I am not saying that the government should have given them a cash transfer, or a loan waiver but a restructuring of loans,” he said.

‘Agricultural Marketing Under State Ambit, Can Centre Implement Reforms?’

Like Fernandes, Ramandeep Singh Mann, who is a farmer activist working in Haryana and Punjab noted that agriculture marketing comes under the ambit of the state. He questions whether these announcements will have any bearing on the ground reality.

“Nobody is contradicting these moves. But the question is what about the urgent needs right now? First and foremost we need to understand that agricultural marketing is regulated by the states. Unless and until states are on onboard, implementing these moves will be a task it itself. On the other hand, if they have they the intent then they can arm-twist the state and it can be done."

‘Irrelevant Measures Which Deflect From Immediate Issues’

Sompal Shashtri, former Union Minister of Agriculture, however, dubbed the announcements as irrelevant.

He said, “The reforms announced are totally irrelevant; they are totally misplaced in terms of the situation we are in. And this is definitely with a view to deflect the attention from the immediate issues of starvation and displacement. They are dressed in a language which is very magical and mesmerising, but the devil lies in the details.”

“APMC was brought in to tackle the problem of exploitation by traders and hoarders taking advantage of the distress sale by farmers. If they have gotten away with APMC and EC Act, what is the alternate arrangement? They have put farmers at the mercy of exploiters again. This is not the time to reform, what is required now is strengthening the backbone of the farmers, particularly those who are producing perishable commodities.”

Sompal Shashtri, former Union Minister of Agriculture

‘Good Ideas, But How Do They Relate to Crisis of Farmers Now?’

Yogendra Yadav, founder of Swaraj Abhiyan, questioned what was new in any of these announcements.

“Instead of responding to the immediate demands of the farmers, the government makes three broad policy declarations. Good ideas, but this very government invoked the Essential Commodities Act a few months ago. The contract farming Act has been with state governments...BJP state governments, they haven’t passed it. Inter-state movement is anyway banned right now. What has changed?”

Yogendra Yadav, founder of Swaraj Abhiyan

“We don't have anything in draft, we don't have anything more than an intent, and we don't know how these three things relate to the crisis of the farmers right now,” he said.

‘Revoking APMC Hasn’t Helped Farmers Before’

Devendra Sharma, an agricultural expert, also pointed out that removing the APMC binding hasn’t served its intended purpose in helping farmers in previous cases.

“In 2006, Bihar had revoked the APMC act — the argument was the same that private investments will come in, we’ll have private mandis and it’ll benefit farmers. But nothing like that has happened in Bihar. Every year, traders would bring in produce from Bihar to be sold in Punjab. Why? Because in Punjab there’s at least an MSP (Minimum Support Price).”

Devendra Sharma, Agricultural Expert

Sharma also said that the reforms announced are long-term measures that don’t provide any immediate relief to cash-strapped farmers, especially those with perishable produce. He was of the opinion that at a critical juncture such as this pandemic, a direct cash transfer would be more beneficial.

“There was a huge lobby for the last two years which had been urging for the stock limit to be removed from the Essential Commodities Act. Online grocery stores, retail chains — all need huge stock, so they were worried. Now the consumers will feel the pinch. Were these reforms required at this juncture? That’s the question,” Sharma said.