Agri Storage and Distribution:News and updates


  • Record Foodgrain Exports Amid hunger in India – Right to Food Campaign

     


    What is the News?

    The Right to Food Campaign has criticized the record export of foodgrains from India in 2020-21. It is the time when the country’s people are struggling with hunger amid the COVID-19 crisis.

    The Right to Food Campaign highlighted the following issues:

     Record Foodgrain Exports:

    • The Government of India has exported over 13 million tonnes of non-basmati rice and more than two million tonnes of wheat in 2020-21.
    • The Government could have used the exported grain to provide to 25 crore people with rations for a year.

    Coverage of Pradhan Mantri Garib Kalyan Yojana Scheme:

    • Pradhan Mantri Garib Kalyan Yojana provides additional free grain for only two months. It also covers only those who are already included under the National Food Security Act.
    • The food security crisis faced by the informal sector workers, especially those who do not have ration cards, has been completely ignored.
    • Hence, the Government should immediately universalise the Public Distribution System(PDS). It should also extend the Pradhan Mantri Garib Kalyan Anna Yojana scheme for a period of at least six months.
    About Right to Food Campaign:
    • Right to Food campaign is an informal network of individuals and organizations. It has its commitments to the realisation of the right to food in India.
    • The launching of the campaign happened in 2001 with a writ petition filed in Supreme Court in 2001 by People’s Union for Civil Liberties.
      • The petition demanded that the country’s surplus food stocks should be used without delay to protect people from hunger and starvation.

    Source: The Hindu

     

  • Boosting Farmer’s Income

    Context- Policies designed for an India on the edge of starvation don’t fit the India of today.

    What is the history of supply and demand of wheat crop in India?

    The genesis of the current state of affairs stems from policies initiated over half a century ago-

    1. Starvation period– It dates from the 1960s, when India that did not grow enough to feed itself and had to rely upon imports under PL-480 as aid from the US.
    2. New PDS and government policy-Then, Indian policymakers shifted to setting a minimum support price.
    • Wheat-paddy crop rotation was encouraged in Punjab and Haryana to make India self-sufficient in food grain production.
    • The system guarantees farmers a set price for their output, while their inputs – water, power, fertilizer, seeds – are free or subsidized.
    • Wheat is then stored in the warehouses of the state-controlled Food Corporation of India and distributed at a subsidized price to the population.
    1. Policy result was a resounding success for the production and procurement of rice and wheat,  which was the focus of the PDS and government policy
    • However, India produces too much grain, which is now rotting in government granaries.
    1. In today’s time, the subsidies for rice and wheat caused too few farmers to plant vegetables, which are subject to major price fluctuations.

    How crop rotations can be beneficial for farmers and the challenges associated with that?

    Rice wheat cycle- In Punjab and Haryana region

    • Rice-wheat rotation by far the most value creating crop cycle.
    • Better varieties of rice – superior basmati rice in the kharif season that have
      lower yield, lower water and nutrient requirement but are exportable and highly priced, could possibly be better crop options in the region.
    • In the Rabi season wherein the only superior alternatives to wheat in the rice-wheat rotation are vegetables and higher qualities of wheat.
    • However, the chances of success in wheat are lower.
    What are the issues in current procurement policy?
    1. High incurred cost by the FCI– Cost of procurement and distribution of food grain has increased manifold.
    2. The quality of grains has been ignored.
    3. There was no initiative for identifying high-quality wheat strains for increasing their production for local and foreign markets.
    What is the way forward?
    1. Shift production from normal rice to basmati and other exportable varieties and to give a boost to wheat for substituting rice via sooji, rava and noodles.
    2. A boost for infrastructure to increase the production of vegetables in the wheat belt and its transport for the healthy growth of agriculture.
    3. The government needs to reduce the institutional costs and move towards a more remunerative cropping pattern.
    4. And must make transparent efforts to push exports consistently.
  • Protesting farmer concerns

    Context- Three Acts in Parliament and handed hurriedly, ignoring critical objections inside each Houses and the opposition outdoors.

    Why are these bills being opposed?

    1. End of MSP– The bills also lack any assurance about Minimum Support Price(MSP)
    • Dismantling of the monopoly of the APMCs as a sign of ending the assured procurement of food grains at minimum support prices (MSP).
    • After the abolition of mandis, farmers in Bihar on average received lower prices compared to the MSP for most crops.
    1. Promote corporate control– The farmers contend the federal government is making ready to withdraw from the procurement of food grain and hand it over to the company gamers.
    2. Weak grievances redress system– The dispute decision mechanism from the purview of courts and fingers it over to the SDM and the DC, who’re perceived as being below stress from their political masters.
    3. Hamper the rural growth– The Farmers’ Produce Trade and Commerce act prohibits State governments from collecting market fee, cess or levy for trade outside the APMC markets that are used for rural growth and market infrastructure.
    4. No mechanism for price fixation – The Price Assurance Act offers protection to farmers against price exploitation.
    5. Food security– Easing of regulation of food commodities in the essential commodities list would lead to hoarding of farm produce during the harvest season when prices are generally lower.
    • This could undermine food security since the States would have no information about the availability of stocks within the State.
    1. Against the Spirit of Cooperative federalism– Since agriculture and markets are State subjects, the ordinances are being seen as a direct encroachment upon the functions of the States

    However, the authorities argues that-

    • Farmers will get higher prices– The acts aim to increase the availability of buyers for farmers’ produce, by allowing them to trade freely without any license or stock limit, so that an increase in competition among them results in better prices for farmers.
    • Contract farming– This can present predetermined costs to farmers contracted upfront which will guarantee costs greater than the MSP.
    • This enables farmers to promote their produce anyplace within the nation and interact with personal corporations to promote their crops.

    What is the way forward?

    • The farmers’ unions want a complete withdrawal of the recently enacted Farm Acts, and an assurance that MSP and procurement by FCI will proceed.
    • The Farm Acts were legislative measures that were passed without elaborate discussion with stakeholders. Thus, government has to take steps to address the genuine fears of farmers.

     

     

    Link for our 7PM Editorial of similar article (Why Farmers are protesting and what is MSP system?)

  • Farm Bills Concerns and evaluation

    Context: Agriculture in India needs state support to thrive.

    Background

    • Recently, President Ram Nath Kovind gave his assent to three contentious farm bills passed by Parliament.
    1. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act,2020 (FAPAFS).
    2. The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 (FPTC).
    • The Essential Commodities (Amendment) Act, 2020 (EC).
    • Indian farmers worry that these farm bills may clear the way for giant Indian companies.

    Why the Farm bills are touted as a watershed moment for Indian agriculture?

    • Elimination of middlemen: The reforms would remove the shackles from the agriculture sector and free farmers from the stranglehold of middlemen by creating one market.
    • Abolition of monopoly of APMC mandis: The bills will permit private buyers to hoard essential commodities for future sales, which only government-authorized agents could do earlier, along with changing the rules for contract farming.
    Why the farmers are concerned about farm bills?
    • Issue of withdrawing MSP: Since the Minimum Support Price (MSP) is not mentioned in the bills, they fear that they will lose the assured option of selling to the APMC mandis and that this will lead to corporate exploitation.
    • Corporatisation of agriculture: In the absence of regulation, as agribusiness firms might well be able to dictate both the market conditions (including prices) and the terms of contract farming as small farmers do not have the same bargaining power.
    • Loss of livelihood and employment: Farmers are suspicious that the entry of giant Indian companies in future such as Reliance and Adani who have already made investments in the agri-business infrastructure will wipe out their livelihood in farming. For instance, the management of the crop insurance scheme against natural disasters, introduced in 2017, was handed over to one of Anil Ambani’s companies, among others.
    How in most countries governments subsidise Agriculture sector?
    • In the US, the agriculture subsidies accounts for about 40 percent of the total farm income. sector ($46 billion in federal subsidies this year). – New York times.
    • Similarly, the European Union’s Common Agricultural Policy spending has averaged €54 billion annually since 2006.
    Why Agriculture sector needs state support in India?
    • Majority of the farmers are small in India: Smallholder and marginal farmers, those with less than two hectares of land account for 86.2 per cent of all cultivators – 10th Agriculture Census.
      • For them, it is unaffordable to carry their produce to other states or far-off places to sell. Without some support from the state, the smallest of Indian peasants would be even more vulnerable.
    • Lack of proper jobs: Also, the prospects of generating employment from other secondary and tertiary sector is not bright. For example, the share of the secondary sector in total employment has been stagnant at around 26 per cent (as against 41 per cent for agriculture) and its share in the GDP is declining.
    • Urban rural divide: There is a wide gap between urban and rural India in terms of per capita resources is widening.
    What is the way forward?
    • Need to increase public investment in agriculture in terms of Agri- infrastructure.
    • Promote Livelihood and Income Augmentation schemes like the Rythu Bandhu in Telangana or the Krushak in Odisha.
    • Need to ensure that no transaction can be done below the MSP, would help alleviate some rural distress.
    • For making farming sustainable, the government should draw inspiration from Andhra Pradesh’s community managed farming model which promotes agro-ecological principles with the use of locally produced, ecologically sustainable inputs, focusing on soil health, instead of depending on chemical fertilisers. This model is more resilient as well as more biodiverse in nature and provides a safety net to farmers.
  • Farm Bills and MSP

    Source: Indian Express

     

    Context: The recently enacted farm bills have triggered debate on the desirability of the MSP regime.

    More in news: The period from 2004 to 2012 was the period of high commodity prices, high government procurement and rapid reduction in rural poverty. This shows a causal link between the high prices and decrease in poverty

    What is the issue?

    •  The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) bill allow for free entry of agents (private individuals, producer collectives or cooperatives) to set up markets.
    •  This means that the Food Corporation of India (FCI) and other associated agencies can procure in the traditional mandis or in a new market established under this law or in their own backyard.
    •  Critics view that the dismantling of the monopoly of the APMCs as a sign of ending the assured procurement of food grains at minimum support prices (MSP).

    Are MSPs irrelevant for the welfare of the farmers?

    •  According to the supporters of the farm bills the MSPs are irrelevant for most of the farmers in the country as it benefits only a small fraction of farmers (Punjab and Haryana) and procurement has remained confined to only a few crops.
    • However, it has indirectly benefited all food grain producers in the country.
    • For example, the procurement through MSP significantly exceeds the PDS requirement, this creates additional demand in the food grain market, pushing up the prices especially when the international prices have remained low.
    • The RBI’s annual report of 2017-18 on the impact of MSP-based procurement on the food prices conclusively shows that MSP is a leading factor influencing the output prices of the farm produce in the entire country.
    • Also, for rain-fed agriculturists, the only state supports these farmers (primarily cotton and pulse producers) have is that of MSPs as they are deprived of irrigation and they don’t benefit from subsidies on electricity and fertiliser.
  • Three Farm Acts and their constitutional debate.

    Source: The Hindu

    Syllabus: Gs3: Issues and Challenges Pertaining to the Federal Structure, Devolution of Powers

    Context: The passage of the three Farm Acts has raised a constitutional debate on Union’s powers to legislate on state subjects.

    What are the three contentious farm bills?

    • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020.
    • The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020,
    • The Essential Commodities (Amendment) Act, 2020.

    What is the controversy around Entry 33 in concurrent list?

    Following subjects are on the state list:
    Agriculture
    Trade and commerce within the State, production, supply and distribution of goods

    Markets and fairs are enumerated as states subject.

    • However, the trade and commerce within the State (Entry 26) & production, supply and distribution of goods (Entry 27) are subjected to the provisions of Entry 33 of concurrent list after the 3rd amendment act, 1954.
    • As per Article 369, the responsibility of agricultural trade and commerce within a State was temporarily entrusted to the Union government for a period of five years beginning from 1950.  However, the 1954 Amendment changed this into a permanent feature in the Constitution.
      Despite many opposed, stating that the Bill would lead to an expanding encroachment on the rights of the States the Bill was passed. Now the same Entry 33 was invoked to encroach the powers of the States.
    • What are the directives given by supreme court in I.T.C. Limited vs.

    Agricultural Produce Market Committee (APMC) case 2002?

    • The development of the tobacco industry was brought under the Centre through the Tobacco Board Act, 1975.
      However, Bihar’s APMC Act continued to list tobacco as an agricultural produce.
    • In this case, the question was if the APMC could charge a levy on ITC for the purchase of unprocessed tobacco leaves from growers.
      The then Constitution Bench upheld the validity of the State APMC Act, and provided some important directives :
      Market fees can be charged from ITC under the State APMC Act
      State laws become repugnant only if the State and Centre enact laws on the same subject matter under an Entry in List III.
    • In those cases, outside List III, one has to first examine if the subject matter was an exclusive entry under List I or List II, and only after determining this can one decide on the dominant legislation that would prevail.
    • How the directives of supreme court related to present Farm Acts of 2020?
      In the case of the Farm Acts of 2020, the applicable points are (a) and (c).
      With regard to (a), States could continue to charge mandi taxes from private markets anywhere in the notified area regardless of the Central Act.
      With regard to (c), the State legislation should prevail as agriculture is an exclusive subject matter under Entry 14 in List II.

    Why the recent Farm Acts are said to have poor legal validity?

    Centre to use Entry 33 in List III to push the Farm Bills weakens the spirit of cooperative federalism.

    • Second, agriculture is exclusively a State subject. Everything that is subsidiary to an exclusive subject in List II should also fall under the exclusive legislative purview of States.
    • Most importantly, Entry 28 in List II markets and fairs is not subject to Entry 33 in List III.
  • Significance and Issues associated with Farms laws

    SourceThe Hindu

    Syllabus: GS3: Issues related to Direct and Indirect Farm Subsidies and Minimum Support Prices

    Context: Recently, the President has given his ascent on the three farm Bills.

    What are the issues with the bill?

    • No clarity on MSP:the Bill does not specify that the contract price should be above the Minimum Support Price (MSP) declared by the government.
    • Corporatization and private hoarding: Farmers may earn less and consumers may pay more due to private hoarding.
    • Loss of revenue: Governments will lose mandi tax, which is a major source of revenue. Bihar failed in 2006 when APMCs were dismantled, resulting in farmers facing challenges in selling their produce at a good price.
    • No security to farmers: according to the Bill, companies are not required to have a written contract with the farmer, making it difficult for farmers to prove terms.
    • Weak positions for farmers: as per bills, contracts need not be registered with the government.

    What are the significances of the bill?

    • Widens farmers’ choices: Sell anywhere to anyone at any price.
    • Promote agri-business: farmers and farmer collectives, agri-businesses and traders can manage post-harvest facilities without such interference by the government.
    • Socialistic reforms: Chakravarthi Rajagopalachari believed in maximum individual freedom and minimum interference by the state. These reforms are largely Gandhian.
    • Better prices: reforms will allow farmers to get good prices for their produce at the farm gate.
    • Improve farm practices: Farm advisories will create better crop planning and troubleshooting.
    • Reduce risk: Climate protected farming will reduce the business risk of agriculture. Reduced business risk will encourage the insurers to insure crops.

    What are the key dimensions to reform agriculture sector?

    • Ensure MSP:MSP should continue in its current form, till markets show that they can deliver results for the farmers, even without the MSP.
    • Reform APMCs: For APMCs to stay relevant, they should become more competitive and transparent. Start-ups like Ninjacart and Waycool are proving a win-win model by reaching tens of thousands of horticulture farmers.
    • Universal basic income through direct benefit transfer mode: The free-market may increase the market-risk for farmer families in the short-term. Therefore, the government should double DBT from the current level of ₹70,000 crore.
    • e-Nam to become a ‘Unified Payment Interface’ equivalent for agri markets: National Agricultural Market should take learnings from UPI and provide a seamless application programming interface (API) for innovators, generally agri start-ups and businesses.
    • Feedback loop:ensure that the reforms feed into a constructive feedback loop that actually benefits farmers.
    • Policy predictability:it is important to have predictability and consistency in this philosophy. If the government exercises arbitrary power in a coercive manner, the private sector will speak with their money by reducing the investments.
    • Farmer forum for dispute resolution: Contract farming will be a transaction between a weak party called a farmer and a strong party called the corporation. Farmers need a ‘consumer forum’ equivalent at a district or block level.

    India needs to combine the power of markets and technology as we have a unique opportunity to change the lives of India’s poor for the better.

  • Benefits of the farms laws

    Source- The Indian Express

    Syllabus- GS 3- Transport and marketing of agricultural produce and issues and related constraints

    Context- Many benefits are associated with farm laws that should be considered in the debates around them.

    How is the agriculture sector working on India’s Independence and till present?

    • 1947-Agriculture contributed 50 per cent to the national income and employed more than 70 per cent of the nation’s workforce.
    • 2019-Agriculture contributed 16.5 per cent to the national income while the sector still employs more than 42 per cent of the workforce.

    What are the challenges in the Indian Agriculture market and what are the methods to address these challenges?

    The Challenges-

    Therefore, this makes agriculture risky and inefficient with respect to both input and output management.

    The challenges need to be addressed by-

    What are the steps taken by the government?

    1.The government has taken various steps including the implementation of the Swaminathan committee’s recommendations, such as-

      1. Fixing MSP at least 50 per cent profits on the cost of production.
      2. Increasing the agri budget by more than 11 times in the past 10 years.
      3. The establishment of e-NAM mandis.
      4. An Agriculture Infrastructure Fund of Rs 1 lakh crore under the Atmanirbhar Bharat Package.
      5. The scheme for the formation of 10,000 FPOs.
      6. The removal of the mandi tax.
      7. The creation of a single market.
      8. Facilitating contract farming.

    2.Farm bills provides for-

      1. Alternative trading channel-It will create an ecosystem where farmers and traders enjoy the freedom of choice of sale and purchase of farming produce to facilitate remunerative prices to farmers through competitive alternative trading channels.
      2. Tax-free market-It will promote barrier-free inter-state and intra-state trade and commerce of farming produce outside the physical premises of markets notified under state agricultural produce marketing legislation. Thus, they will facilitate farmers with more buyers for their produce at their doorsteps.
      3. Transparency in the system
      • This framework will facilitate greater certainty in quality and price, adoption of quality and grading standards, linkage of farming agreements with insurance and credit instruments to transfer the risk of market unpredictability from the farmer to the sponsor, and also enable the farmer to access modern technology and better inputs.

    What are the precautions which are taken by the government to secure the farmers from fraud?

    In order to ensure that our farmers are not short-changed or cheated by anyone, the bills have several safeguards such as-

    1. Protection of land- The prohibition of sale, lease, or mortgage of farmers’ land and farmers’ land is also protected against any recovery.
    2. Farming agreements-Cannot be entered into if they are in derogation of the rights of a sharecropper.
    3. Flexible prices-Farmers will have access to flexible prices subject to a guaranteed price in agreements.
    4. Sponsor’s active role-The sponsor has to ensure the timely acceptance of delivery and payment of produce to farmers and farmers’ liability is limited to only the advance received and cost of inputs provided by the sponsor.
    5. In case of any dispute-It will be resolved through a Conciliation Board, to be constituted by the sub-divisional magistrate (SDM), failing which an aggrieved party may approach the concerned SDM for the settlement of the dispute.
    6. Power of the SDM– SDM can order the recovery of the amount in dispute, impose penalties and also pass an order restraining the trader for the trade and commerce of scheduled farmers’ produce for such a period as deemed fit.

    Way Forward

    The people of India must not allow falsehood and political opportunism to overshadow the key measures and mechanisms enunciated through this landmark reform, which finally puts the farmers first. These farm bills will bring transformative changes in our agricultural sector and reduce wastage, increase efficiency, unlock value for our farmers and increase farmers’ incomes for the sustainable growth of the farming sector.

  • Reasons behind protest against farm laws

    Source- The Indian Express

    Syllabus- GS 3- Issues related to direct and indirect farm subsidies and minimum support price

    Context- There are many reasons behind the recently erupted protest against farm laws that should have been avoided by the government.

    What are the new Farm Bills?

    Three Farm Bills that are bond for contention-

    • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020.
    • The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020.
    • The Essential Commodities (Amendment) Bill, 2020.

    Why are these bills being opposed?

    1. Against the spirit of cooperative federalism-
    • Since agriculture and markets are State subjects – entry 14 and 28 respectively in List II – the ordinances are being seen as a direct encroachment upon the functions of the States.
    • The three ordinances passed by the Centre are viewed as against the spirit of cooperative federalism enshrined in the Constitution.
    1. Absence of any regulation in non-APMC-
    • According to farmers, the proposed bills give the preference for corporate interests at the cost of farmer’s interests.
    • In the absence of any regulation in non-APMC, the farmers may find it difficult to deal with corporates, as they solely operate on the motive of profit seeking.
    1. End of MSP [Minimum Support Price]– By allowing trade zones to come up outside the APMC area, as a sign of ending the assured procurement of food grains at minimum support price.
    • There is no mention whatsoever of the Minimum Support Price (MSP) regime, which is the lifeline of poor farmers and their key to survival, as also the survival of the nation’s agriculture sector.
    1. Lack of consultation– Farmers have argued that there is hastily attempt to pass the bills without proper consultation with any major stakeholders, farmer’s representatives or any state governments before bringing the ordinances.
    2. Non-Favourable Market Conditions- While retail prices have remained high; data from the Wholesale Price Index (WPI) suggest a deceleration in farm gate prices for most agricultural produce.
    • With rising input costs, farmers do not see the free market based framework providing them remunerative prices.
    • These fears gain strength with the experience of States such as Bihar which abolished APMCs in 2006. After the abolition of mandis, farmers in Bihar on average received lower prices compared to the MSP for most crops.
    1. Food security undermined-
    • Easing of regulation of food items would lead to exporters, processors and traders hoarding farm produceduring the harvest season, when prices are generally lower, and releasing it later when prices increase.
    • This could undermine food security since the States would have no information about the availability of stocks within the State.
    1. Deregulation of food items-
    • The Essential Commodities [Amendment] bill removes cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities, which deregulate the production, storage, movement and distribution of these food commodities.

    Way forward-

    Centre needs to prevent the farmers from falling into the clutches of the monopolistic big corporates and need to enlarge the market for agriculture produce while preserving the safety net principle through MSP and public procurement. Government must provide MSP not just on wheat and rice but all other crops so that farmers are encouraged to diversify.

  • Farm bills and opposition hypocrisy

    Source – The Indian Express

    Syllabus – GS 3- Major crops-cropping patterns in various parts of the country, – different types of irrigation and irrigation systems storage, transport and marketing of agricultural produce and issues and related constraints; e-technology in the aid of farmers.

    Context– The government claims that the new farm bills are a historic step taken in the interest of farmers, giving them the freedom to sell their produce anywhere in the country and to any one they want.

    What are the new Farm Bills?

    Three Farm Bills that are bond for contention-

    • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020– The FPTC breaks the monopolistic powers of the APMC markets.
    • The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020- FAPAFs allows contract faming.
    • The Essential Commodities (Amendment) Bill, 2020- ECA remove stocking limits on traders for a large number of commodities, with some caveats still in place.

    What are the pros of farm bills 2020?

    1. Increment in farmer’s income– According to the government, the bills would transform the agriculture sector which will raise the farmers’ income. It also promises to double farmers’ income by 2022 and the Centre said that the Bills will make the farmer independent of government-controlled markets and fetch them a better price for their produce.
    2. Creating healthy competition – These bills provide greater choice and freedom to farmers to sell their produce and to buyers to buy and store, thereby creating competition in agricultural marketing.
    • Opens up agriculture sale and marketing outside the notified APMC mandis for farmers.
    • Removes barriers to inter-state trade.
    1. Efficient value chain– This competition is expected to help build more efficient value chains in agriculture by reducing marketing costs, enabling better price discovery, improving price realization for farmers and, at the same time, reducing the price paid by consumers.
    2. Modernization-The farm bill 2020 aims to enable farmers to engage with agri-business companies, retailers, exporters for service, and sale of produce while giving the farmer access to modern technology.
    3. Promotes Farmer Production Organization (FPO)– These bills promote the creation of FPO on a large scale and will help in creating a farmer-friendly environment for contract farming where small players can benefit.

    Way forward-

    It is high time to get agriculture market right and these farm bills are steps in that direction. Centre need to create Farmer Producer Organizations (FPOs) and invest in marketing infrastructure. NABARD must get its act together, take professional advice and work with implementing agencies in the private sector, including various foundations already working with farmers.

  • Farmers protesting on Farm bills

    Source- The Indian Express

    Syllabus- GS 3-  Transport and marketing of agricultural produce and issues and related constraints; e-technology in the aid of farmers

    Context- Farmer’s organisation across the country gave a call for a bandh on September 25th to protest the three bills passed by Parliament.

    What are the new Farm Bills?

    Three Farm Bills that are bond for contention-

    1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 (FPTC).
    2. The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 (FAPAFS).
    3. The Essential Commodities (Amendment) Bill, 2020.

    Why are these bills being protested?

    These bills have been protested by not only the farmers, even opposition and state legislatures are not supporting these bills due to-

    1. Unconstitutional Procedure-The manner in which the bills were thrust upon the farming community. Not only the farmers’ organisations, but even state governments and allies have not been consulted.
    2. Against the spirit of cooperative federalism –
    • All the earlier attempts at reforming agricultural marketing respected the constitutional separation of powers. While the Centre proposed the model acts, these were implemented by state governments.

    For instances– Out of 36 states and union territories-

      1. 18 states have already enacted reforms allowing for establishment of private market yards/private markets.
      2. 19 states have enacted reforms allowing for direct purchase of agricultural produce from agriculturists by processor/bulk buyer/bulk retailer/exporter.
      3. 20 states have enacted contract farming acts.
      4. Kerala and Bihar do not have APMC mandis and Tamil Nadu has a different system.
      5. Most states have exempted levy of taxes and fees on sale of fruits and vegetables.
    • The current reforms completely bypass the state governments and weaken their ability to regulate agricultural markets even though it is a state subject.
    1. Changing objectives of the government-unlike earlier reforms where the focus was on strengthening the functioning of APMC mandis while allowing for greater private market access and participation, the current FTPC bill bypasses the APMC altogether, creating a separate structure of trading.
    2. Creation of dual market structure-The absence of regulation and exemption from mandi fees creates a dual market structure which is not only inefficient but will also encourage unregulated trade detrimental to the primary purpose of providing market access to farmers for better price discovery and assured prices.
    3. Corporate Exploitation-FTPC Bill is not about delivering on the promise of freedom to farmers but freedom to private capital to purchase agricultural produce at cheaper prices and without any regulation or oversight by the government.
    4. Contract farming bill and amendments in the essential commodities act– Apart from the fact that the provisions of these bills are highly skewed in favour of private capital, with no limits on stockholding and restrictions of government interventions, there is limited recourse to any independent grievance redressal mechanism.
    5. Government actions-Agricultural terms of trade have moved against agriculture with rising input prices (with the government increasing diesel prices despite the collapse in international prices) and declining farm gate prices.

    Way Forward

    The government should re-consider all the farm bills with the states, famer’s organisations, and their representatives. So, that the farmers will gets the opportunity to give their opinions and address their issues regarding the farm bills. Also by this farmers will understand the agenda of the government’s view of the bills. This will bring harmony and peace among the protestors.