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  • Writer's pictureThe Financial Literacy Cell

One Nation, One Agricultural Market

With up to 80% of population of rural India earning livelihood from agriculture and allied activities, India has always been an agricultural economy. Agriculture provides employment to approximately 52% of labour of the country and its contribution to GDP of the nation generally ranges from 14% to 15%. The sector has embraced all the setbacks it has received in the form of the COVID-19 crisis or the floods, and given a positive growth rate of 3.4% for the first quarter, while all the other industries perished and suffered badly. The growth entirely is the result of the sweat and blood of the immensely hard working farmers of India.

A good harvest is a result of a lot of hardships put in by a farmer. Due to the lack of well-structured irrigation facilities in India, it mainly depends on the monsoon. Adding to the misery of the agronomists, comes the huge capital requirements that they often lack. They generally prefer to avail loans from the informal sector because they are not very comfortable with the formalities that need to be fulfilled for availing a loan from the formal sector. And often they are unable to repay the loans as their crops fail or they do not get the suitable bargain for their products. This aggravates their plight and paves their way into the debt trap and also leads to farmer suicides.

Under the current system, the farmers sell their crops to the middlemen at the Agriculture Produce Marketing Committee (APMC) mandis where agricultural yield is bid in the open, making the maximum bid the basis of price. The syndicate of the middlemen makes sure that the farmers are left with no choice but to sell their produce at a very low price as decided by the maximum bid, which does not even suffice for mere survival of the farmer.

Secondly, the middlemen claim that because of low demand, their produce cannot be sold in the market, forcing the farmers to sell the produce at a further lower price. Even after this, they delay the payments making it worse for the farmers. The agents, further exploit and deceive the farmers using fraudulent measurement techniques such as false weights. They offer reduced final price to the farmers, by pointing out the aggravated adulteration of the yield.

The government has recently come up with three bills to change the current system of Agriculture Produce Marketing Committee mandis and to strengthen the position of the farmers. The three bills passed in the Lok Sabha are:

  • The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill;

  • The Farmers’ (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, and

  • The Essential Commodities (Amendment) Bill.

The government has passed these bills with a motive to boost up agricultural growth with the inclusion of private sector investment in building agricultural infrastructure and supply chains for Indian farm produce in national and global markets. The private market can now reach the farmers and offer suitable price for their yield. This will in turn help in creation of employment and strengthening of the economy. These bills are a “historic-step” in unlocking the regulated agricultural markets in the country as they will promote a barrier-free, inter-state and intra-state trade and commerce of the agricultural produce. The government further claims that they will free the farmers from middlemen and other bottlenecks.

With all the benefits accruing out of these bills, here is the reason why the farmers are protesting against the bills. Even though the government has reassured, the farmers still believe that the bills will render the current Minimum Support Price procurement system ineffective, leaving them at the mercy of “big farmers and big corporates”. They believe that these bills will not only destroy the farmers but will also impact the farm labourers and Arhitiyas or the commission agents. Moreover, this has led to the resignation of a Union Minister for food processing industries, Harsimrat Kaur Badal, as she believes these to be “anti-farmer” bills.

The government should listen to all the concerns put up by the protestors, provide them with the reasons behind its actions and should finally take a step which saves the farmers of the country from the exploitation that they face, benefits them and raises them to power. Through Pradhan Mantri Fasal Bima Yojana (PMFBY), Pradhan Mantri Krishi Sinchai Yojana (PMKSY), National Agriculture Market (e-NAM), Government of India has extended its support to the farmers in the past as well. The nation hopes that the Government once again will empower the farmers.

By Saumya Bardia

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