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?
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
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.