A Step Towards Indian Agricultural Sustainability
Lucrative policy that bestows the “right to choose” for Indian farmers.
When pragmatism meets courage and political will, the doors of sustainability opens up and the dream of development lightens.
Agriculture, a sector in which more than half the Indian population works, has been suffering because of over-protectionist and often dubious policies. Our myopic and pragmatic framework for agricultural welfare pushed the farmers, the backbone of the nation, into perpetual chaos. The need for agriculture reforms is inexplicably crucial. The pending agriculture reforms, which were ignored during the 1991 economic liberalisation has now been finally materialised. Three new laws introduced this month are building pillars of sustainability and, more importantly, building a bond of trust between the systems and farmers. After 7 decades of idiocy and preposterousness, there has been a newly built atmosphere.
In India, farmers never have the right to choose, a right which is fundamentally bestowed upon every citizen through the constitution and directive principles. Farmers are forced to sell their crops only to the government owned system called the Agriculture Produce and Market Committee (APMC). APMC was brought in by Lal Bahadur Sastri’s Prime Ministry, when the government intended to break the chains of bankruptcy of farmers and ensure a proper price to be given to farmer’s produce. In other words, farmers were protected from preying lenders and often condescending buyers. This law lays down a system where in the farmers can sell their produce only to the government regulated and owned Mandis at a government prescribed price called the minimum support price (MSP). However, this mechanism, over a period of time, turned out to be counterproductive and often a looting machine for the elite.
This monopoly resulted in higher corruption, thriving mafia and bureaucratic red tape which shackled the farmers. For example, if a farmer brings in tomatoes (perishable product) to sell to the APMCs, the farmer is forced to sell it below the market price. The farmer can neither approach other APMC as the nexus of APMC mafia have black market deals, nor can he/she wait for the police as tomatoes in essence rot in few days. Hence, the farmers are forced to sell below the price. This on one hand prevented the government’s ambitious goal of doubling the farmers’ income to materialise, but also increased the suicide rates of farmers.
Hence, the federal government of India brought in a new act called the “Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020” which allows farmers to sell their products outside the Mandis to private organisations. It also allows a barrier free inter-state trade of agriculture produce that minimises government intervention.
The government also brought down the cost of transportation quite significantly and ruled out the imposition of taxes on private entities who buy the farmers’ produce and invest in agricultural technology. In order to aid this act, the government has brought in another act called as “The Farmer (Empowerment and Protection) Agreement of Price Agreement act 2020”. This act allows contract farming, reduces the cost of marketing, transfers the uncertainty risk of farmers and promotes the usage of modern technology. Moreover, the famers can now sell their produce without any middleman or interference of the elite. The government brought in many new amendments through the essential commodities act 2020, in which, the government will now control the prices only during the time of war, famine or unprecedented amount of price raise (100% for non-perishables and 50% for vegetables and fruits). This effectively decreases the red tape and brings in predictability, while letting the free hand economics run the industry as well.
This month marks the best agriculture reforms which India has ever seen since independence. Moreover, these policies, for the first time, consider sustainability and technological based development. The three laws mark the biggest economic reform since the 1991, in fact, it is considered as a larger reform than the 1991 economic reform. In other words, these new laws significantly ease the burden on famers, bringing out hope of sustainability and adaptability.