From UPSC perspective, the following things are important :
Prelims level : APMC Act, ECA
Mains level : Paper 3- Reforms in agri-marketing and amendment in ECA and APMC Acts.
The article discusses the recently announced reforms in the agri-marketing. The legal changes promised are expected to deal with problems farmer face in selling their products and a law dealing with contract farming. These legal reforms are expected to increase farmers’ income.
Some of the issues faced by the farmers
- If any class of economic agents of our country has been denied the constitutional right of freedom of trade, it is farmers.
- They don’t have the freedom of selling their produce even in their neighbourhood.
- Remunerative price is still a mirage for them.
- Their farm incomes are at the mercy of markets, middlemen and money lenders.
- For every rupee that a farmer makes, others in the supply chain get much more.
- Both farmers and consumers are the sufferers of the exploitative procurement and marketing of farm produce.
- The public investments in irrigation and other infrastructure has increased.
- The institutional credit and minimum support price given over the years has been increasing.
- Yet, farmers are shackled when it comes to selling their produce.
Restriction on the farmers: Echoes from the past
- This exploitation of farmers has its roots in the Bengal famine of 1943, World War II, and the droughts and food shortages of the 1960s.
- The Essential Commodities Act, 1955, and the Agricultural Produce Market Committee (APMC) Acts of the States are the principle sources of violation of the rights of farmers to sell their produce at a price of their choice.
- These two laws severely restrict the options of farmers to sell their produce.
- Farmers continue to be the victims of a buyers’ market.
- This is the principal cause of their exploitation.
- Renowned farm scientist M.S. Swaminathan has for long argued for the right of farmers to sell their produce as they deem fit.
Balancing the interest of consumers and the farmers
- Given the economic disparities in the country, the interests of consumers need to be protected.
- But that should not happen at the cost of the producers of the very commodities that the consumers need.
- For various reasons, a balance in this regard could not be struck.
- The restrictive trade and marketing policies being practised with respect to agricultural prices have substantially eroded the incomes of farmers.
Let’s have a look at a study on agricultural policies in India
- A study on agricultural policies in India by the Indian Council for Research on International Economic Relations-Organisation for Economic Co-operation and Development (2018), co-authored by the renowned farm economist Ashok Gulati, was published with startling revelations.
- It concluded that the restrictions on agricultural marketing amounted to ‘implicit taxation’ on farmers to the tune of ₹45 lakh crore from 2000-01 to 2016-17.
- This comes to ₹2.56 lakh crore per year.
- No other country does this.
Reforms to remove the hurdles in farmer getting remunerative price
- Recently announced package has approximately ₹4 lakh crore support for farming and allied sectors, aimed at improving infrastructure and enhancing credit support.
- But the most welcome feature of this package is the firm commitment to rewriting the Essential Commodities Act and the APMC laws.
- The revision of these restrictive laws is long overdue and will remove the hurdles that farmers face in getting a remunerative price for their produce by giving them more options to sell.
- This long-awaited revision needs to be undertaken with care and responsibility so that no space or scope is left for farmers to be exploited yet again.
- While allowing several buyers to directly access the produce from the farmers, a strong and effective network of Farm Producers’ Organisations should be created to enhance the bargaining power of farmers.
- This will ensure that individual farmers are not exploited.
- An effective law on contract farming is also the need of the hour.
- Law on contract farming will secure incomes of farmers besides enabling private investments.
- Yet another unique feature of this package has been its comprehensiveness towards improving the incomes of farmers through a range of activities.
- A study by the National Institute of Agricultural Extension Management has revealed that of the 3,500 farmers’ suicides examined, there was no farmer who had supplementary incomes from dairy or poultry.
- The huge support to animal husbandry and fisheries in the stimulus package underlines the need for diversifying the income sources of farmers.
Consider the question “The APMC Acts of the has been blamed for poor price realisation by the farmers. Recently announced reforms promise to do away with such issues in the APMC Act. In light of this, examine the issues with APMC Acts and how the promised reforms are expected to resolve such issues.”
It is time to allow our farmers to sell their produce anywhere for their benefit. All stakeholders should be taken on board while revising restrictive agri-marketing laws.