|| Dispelling Popular Myths On Farm Laws ||
Myth 1: Farmers have no freedom to sell their produce outside agricultural mandis. The new bills usher in freedom for the farmer to sell his produce to any buyer, thereby fetching a better price.
But, the reality is otherwise. The majority of the agricultural produce of India is already sold outside the agricultural markets. The official data shows that even for paddy and wheat, only 29% and 44% of the harvest are sold in a mandi, while 49% and 36% is sold to either a local private trader or an input dealer.
The last Situational Assessment Survey showed that of the 31 crops covered in the survey, local private traders were the main buyers in case of 29 crops.
Myth 2: The inefficient middlemen dominated, regulated agriculture markets monopolize the agricultural trade. This is harming the farmers.
Look at the facts. R Ramakumar, professor at the Tata Institute of Social Sciences, in an article in the Hindu, The perils of deregulated imperfect Agri markets writes, already 18 states have allowed the establishment of private markets outside the APMC and 19 states have allowed the direct purchase of agricultural produce from the farmers.
The National Commission for Agriculture has recommended that every Indian farmer should be able to reach a mandi in one hour by a cart. Thus, the average area served by a mandi was to be reduced to 80 sqkm. For this, the number of mandis was to increase to at least 41,000. But, India in 2019 has only 6,630 mandis with an average area served of 463 sqkm. Statistics reveal that there is an inadequate number of markets.
Myth 3: The central government leaders claim that government procurement will continue even after the new farm bills are enacted. The envisaged free-market regime gives freedom to the farmer to sell to any buyer.
The Bihar experience reveals what is going to happen in the country after the free-market farm laws. Bihar abolished Agricultural Produce Marketing Committee (APMC) Act way back in 2006. The data from the Department of Food and Public Distribution, Government of India, reveals that in Bihar less than 20% of paddy and often zero per cent of wheat has been procured by government agencies.
According to reports, the number of government-run grain procurement centres in Bihar had gone down from about 9,000 in 2015-16, to 1,619 in 2019-20.
Myth 4: The new farm laws do not abolish Minimum Support Price (MSP). Farmers will now have freedom to sell in private markets at a higher price.
A Reserve Bank of India study based on a survey of farmers and traders in 2018 found that more than 50% farmers found Minimum Support Price for crops to be the most beneficial scheme for farmers. But, nowhere in the acts does it say prices given by a trader or agri business to the farmer cannot go below the MSP. However, The MSP may continue on paper. But, it will be weakened as evident from Bihar experience. Bihar farmers are not getting higher prices despite having freedom to sell anywhere. In 2019-20, MSP for rice was fixed at Rs 1,815 per quintal but farmers were forced to sell to traders at only Rs 1,350 to 1400 per quintal. For wheat, MSP was Rs 1,925 but farmers had to sell it at Rs 1,800 or even less in Bihar. For maize, farmers reported getting a price of Rs 1,000-1,300 per quintal while the official MSP was fixed at Rs 1,850 in the current year.
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|| Dispelling Popular Myths On Farm Laws || Myth 1: Farmers have no freedom to sell their produce outside agricultural mandis. The new bills usher in freedom for the farmer to sell his produce to any buyer, thereby fetching a better price. But, the reality is otherwise. The majority of the agricultural produce of India is already sold outside the agricultural markets. The official data shows that even for paddy and wheat, only 29% and 44% of the harvest are sold in a mandi, while 49% and 36% is sold to either a local private trader or an input dealer. The last Situational Assessment Survey showed that of the 31 crops covered in the survey, local private traders were the main buyers in case of 29 crops. Myth 2: The inefficient middlemen dominated, regulated agriculture markets monopolize the agricultural trade. This is harming the farmers. Look at the facts. R Ramakumar, professor at the Tata Institute of Social Sciences, in an article in the Hindu, The perils of deregulated imperfect Agri markets writes, already 18 states have allowed the establishment of private markets outside the APMC and 19 states have allowed the direct purchase of agricultural produce from the farmers. The National Commission for Agriculture has recommended that every Indian farmer should be able to reach a mandi in one hour by a cart. Thus, the average area served by a mandi was to be reduced to 80 sqkm. For this, the number of mandis was to increase to at least 41,000. But, India in 2019 has only 6,630 mandis with an average area served of 463 sqkm. Statistics reveal that there is an inadequate number of markets. Myth 3: The central government leaders claim that government procurement will continue even after the new farm bills are enacted. The envisaged free-market regime gives freedom to the farmer to sell to any buyer. The Bihar experience reveals what is going to happen in the country after the free-market farm laws. Bihar abolished Agricultural Produce Marketing Committee (APMC) Act way back in 2006. The data from the Department of Food and Public Distribution, Government of India, reveals that in Bihar less than 20% of paddy and often zero per cent of wheat has been procured by government agencies. According to reports, the number of government-run grain procurement centres in Bihar had gone down from about 9,000 in 2015-16, to 1,619 in 2019-20. Myth 4: The new farm laws do not abolish Minimum Support Price (MSP). Farmers will now have freedom to sell in private markets at a higher price. A Reserve Bank of India study based on a survey of farmers and traders in 2018 found that more than 50% farmers found Minimum Support Price for crops to be the most beneficial scheme for farmers. But, nowhere in the acts does it say prices given by a trader or agri business to the farmer cannot go below the MSP. However, The MSP may continue on paper. But, it will be weakened as evident from Bihar experience. Bihar farmers are not getting higher prices despite having freedom to sell anywhere. In 2019-20, MSP for rice was fixed at Rs 1,815 per quintal but farmers were forced to sell to traders at only Rs 1,350 to 1400 per quintal. For wheat, MSP was Rs 1,925 but farmers had to sell it at Rs 1,800 or even less in Bihar. For maize, farmers reported getting a price of Rs 1,000-1,300 per quintal while the official MSP was fixed at Rs 1,850 in the current year. https://www.gulte.com/political-news/39596/7-myths-on-farm-bills