Introduction
The Government’s move to bring in three ordinances on Farm Laws in Parliament and later getting them formulated into Acts in September 2020 has become a bone of contention for both the Government and farmers. The move lacked wide consultation with the main stakeholders like farmers, implementing states and political consensus, leading to the current unrest in the country with more than 500 farmers’ unions with over 100,000 farmers have gathered on the outskirts of Delhi at Singhu border, Tikkri border and Gazipur border to register their protest.
The government claims these Acts will transform Indian agriculture and attract private investment. The Prime Minister reiterated in the Parliament that farmers stood to benefit from the new measures, and this may well be true. At first glance, the arguments of the Union Government to justify these laws are quite understandable. Farmers have always been dependent on middlemen to market their agricultural products. The high indebtedness of many farmers is partly due to this dependency. Agriculture is the livelihood for more than 60% of India’s 1.3 billion people. The farm sector’s contribution for the national economic output comes to 15%. With attractive and promising titles the new farm laws remove many existing barriers for buying and selling the agricultural produce.
However, majority of the farmers are not convinced by these assurances and fear that their liability will increase as a result of the changes. Eyebrows have been raised over the way these Bills were passed in Parliament, favoring Crony Capitalism and conspiring to diffuse & defame farmers’ agitation. Earlier, the basic element of MSP, recommended by Narendra Modi as the Gujarat Chief Minister in his letter to the then Prime Minister Manmohan Singh, is now missing in the present Act. The Congress too in its manifesto had strongly recommended for the economic reforms and privatization, but is now opposing the Laws.
The politics behind these moves is palpable as one considers the different arguments surrounding the current state of affairs. Together with our popular understanding of politics is the need in our discussion to consider the term ‘Apolitical’. Apolitical’ is both a word and a concept; it is reflective of one’s attitude and behavior towards the realities that grip people anywhere. It is also defined as ‘politically neutral; without political attitudes, content or bias’. In ordinary parlance, for the ones who cry hoarse about being ‘apolitical’ it just means not getting involved in politics; because politics is ‘dirty’– and any involvement would mean repercussions on oneself or family or the institution one represents. The fact, however, is that every single human apart from being a social being is also a political being; not being involved in politics is also a political statement.
Nobody denies the need for a fundamental reform creating supportive terms for the promotion of cultivation and marketing of agricultural products. Individual measures such as the organization of farmers’ cooperatives or the expansion of storage capacities have been taken to achieve higher prices, but they are not enough. The question now is whether the laws passed in September are an adequate response to this challenge.
The farmers are currently paid MSP for certain crops, mainly wheat and rice. Produce is currently sold at auctions organized by Agricultural Produce Market Committees (APMC) in each state with specific restrictions. The farmers fear that the reforms will dismantle the APMC structure and allow to sell their goods to anyone for any price, even to buyers from outside of their state. The two issues that farmers are mainly concerned are: procurement and MSP. The procurement of the production is quite high in Punjab and Haryana, irrespective of the landholdings to be small or big. If MSP is there, farming is profitable. If it is withdrawn, it will lead to losses, as the cost of production is quite high. Hence, farmers will quit farming, as it is not profitable. The MSP system has made farmers dependent on the central pool procurement system.
With the introduction of the Farm laws, Arhtiyas or the commission agents or the middlemen would be the most effected lot of people. An estimate says, over 30,000 Arhtiyas function in the state of Punjab alone and their clout is so strong that no farmer can sell their crops directly to the government. They also lend money to small / marginal farmers and others at the rate of 18 % per year. Their earning runs into crores per year. With the Farm Laws in place, the Private players would be offering better rates than the Government. This would help the Government in getting out of the MSP business in the long run. So now, if Arhtiyas have to operate, they would have to be competitive and re-engineer themselves. They have no role to play in Contract farming, because the contractors/private players would directly pay to the farmers.
Three Farm Laws: Talk of the Town
1. Bill on agri market: The first Bill of Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 gives freedom to the farmers to sell their produce anywhere in the country. It makes provisions to create an ecosystem where farmers and traders enjoy the freedom to sell and purchase farm produce outside registered ‘mandis’ under states’ APMCs; promote barrier-free inter-state and intra-state trade of farmers’ produce; reduce marketing/transportation costs and help farmers in getting better prices; and provide a facilitative framework for electronic trading.
The opposition is because States will lose revenue on ‘mandi fees’, if farmers sell their produce outside registered APMC markets; Commission agents will lose out; may eventually end the MSP-based procurement system; and electronic trading like in e-NAM system is destroyed.
A few practical questions that bother the laymen and farmers equally are; Is it feasible for the small farmers to take their produce to the city or other state? Are our farmers educated enough to browse through electronically to know rates, or have money and other resources to sell their produce in other markets? Can a farmer holding two acres take his produce to a market away from his village and sell it? Who will pay him the transport charges? Can this farmer manage the market forces? Can he bargain with the market forces? What if he fails to get even the transport cost? Basically, the farmer is expected to learn the marketing skills!
2. Bill on contract farming: The Farmer (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 gives legal guarantee to the agreements that farmers reach with the traders. The farmers can enter into a contract with agribusiness firms, processors, wholesalers, exporters or large retailers for sale of future farming produce at a pre-agreed price; marginal and small farmers (86% of total farmers in India), with land less than five hectares, to gain via aggregation and contract; transfer the risk of market unpredictability from farmers to sponsors; enable farmers to access modern tech and get better inputs; reduce cost of marketing and boost farmer’s income; farmers can engage in direct marketing by eliminating intermediaries for full price realization; and effective dispute resolution mechanism with redressal timelines.
The concern is that the farmers in contract farming arrangements will be the weaker players in terms of their ability to negotiate what they need; sponsors may not like to deal with a multitude of small and marginal farmers; being big private companies, exporters, wholesalers and processors, the sponsors will have an edge in disputes.
The traders will have an upper hand over the small farmers with cash in hand while formulating legal guarantee agreements. This would make the farmers sacrificial goats. Even with the statutory bodies and the Mandis in place, the market forces have been cheating the farmers in the local market yards by suppressing the demand and thus bringing down the price below MSP. Instead of giving them the MSP guarantee, leaving the market to the corporate sector and the traders would do no good to the farmers. The laws would also take away the right of the farmers to complain against the non-payment of the MSP. Basically, the farmer is expected to learn the legal skills!
3. Bill relating to commodities: The Essential Commodities (Amendment) Bill, 2020 makes a provision to remove commodities like cereals, pulses, oilseeds, onion and potatoes from the list of essential commodities. It will do away with the imposition of stockholding limits on such items except under “extraordinary circumstances” like war; it will attract private sector/FDI into farm sector as it will remove fears of private investors of excessive regulatory interference in business operations; bring investment for farm infrastructure like cold storages, and modernizing food supply chain; help both farmers and consumers by bringing in price stability and create competitive market environment and cut wastage of farm produce.
The objections raised include price limits for “extraordinary circumstances” are so high that they are likely to be never triggered; big companies will have the freedom to stock commodities, it means they will dictate terms to farmers which may lead to less prices for the cultivators; and recent decision on export ban on onion creates doubt on its implementation.
With the lifting of ban on storage of essentials like pulses, spices, the traders will buy the produce at the time of yield at lesser price and stock them, and create artificial demand for them to make greater profits. In the past, several well-performing governments lost their coming back to power on account of this storage issue, be it the onion or pulses. The government has no mechanism to control this gambling by the traders and the corporate companies, who can store the essential commodities creating artificial scarcity. The government fails every time when the market forces create artificial scarcity, even with the ban on storage. Now, with the ban lifted, the government would not be in a position to check the market and make the essential commodities available to the people. Basically, the trader will govern the market demand and supply!
Case Studies on Contract Farming
Big brands of potato chips like Lays, Bingo, Haldiram nowadays enter into a direct agreement with the farmers to procure raw potatoes from small cities or rural areas. In Mhow, 20 kms from Indore in Madhya Pradesh, big corporates have procured the entire potato field under the contract farming, chip it with their machines in the field itself, get it dried, flavored, packaged and take it for sale at a grand level. It’s a win-win situation for both the farmers and the corporates. The farmer is at a low risk of losing the crops, and the corporates are ensured of the raw material at a minimal rate. One potato cut into 4-5 pieces, sown in the field, yield 8-10 big potatoes in a short span of three months. One bigha land is leased out for Rs 10-12,000 from which around 500 kg potato is procured. The Malwa belt, known for its high productivity of crops is mostly leased out to such Marwadis, and imports potato from other parts of the country like Sahranpur and hill cities for its own local consumption.
According to a local farmer, they cultivate 2-3 crops in a year in the region; soyabean from March to June, wheat after rains till February, pulses or a seasonal vegetable in between for 2-3 months. The one-bigha farmland yields around 300 kg each of wheat and soyabean. The Minimum Support Price (MSP) of wheat in MP is Rs 1975 and soyabean is Rs 3390 per quintal. Thus, a hard-working farmer with one bigha land can earn on an average 16-18,000 per year. In general, almost 94% of farmers do not get the MSP in India, with Mandis terming it to be a degraded quality of food grains or for other reasons. The farm labour, transportation, long queue at the wholesale markets (Mandi) and a dip of almost 30% price compels them to sell the produce to a middleman or a landlord nearby. In such a scenario, the entry of a corporate house at their doorstep with ready cash and other emoluments is a good hassle-free deal to sell it to these big brands, even at a lower price. The MSP is beneficial for the farmers only if the Government procures their yields, which comes to hardly 50 % of the total produce.
Farmers from Punjab who are protesting against the new farm laws in Delhi are suffering from deep economic stress and shrinking land holdings. The contract farming has killed the agriculture sector in several other states. In Punjab and Haryana, the epicentre of the protests, the market fee, rural development fee, and arhatiya’s commission are 3%, 3%, and 2.5%; and 2%, 2%, and 2.5% respectively. These are big sources of state revenue, with states not permitted to levy market fee/cess outside APMC areas under the new laws, Punjab and Haryana could lose an estimated Rs 3,500 crore and Rs 1,600 crore each year respectively. From 2014, the Delhi Government has allowed the farmers to sell their fruits and vegetables outside Mandis. Primary agriculture cooperative society procures grains in Bihar for the past 13 years. The middlemen here procure the grains at a very low rate, bringing loss to the farmers and sell it at a very high rate in other states like Punjab and Haryana.
SC Verdict: Farmers Pain is Government Gain
The SC stayed the implementation of the controversial farm laws till further orders on January 12 and decided to set up a four-member committee to resolve the impasse. The four members include; Bhupinder Singh Mann, President of Bhartiya Kisan Union; Anil Ghanwat, President of Shetkeri Sangthana, Maharashtra; Pramod Kumar Joshi, Director for South Asia, International Food Policy Research Institute, and agriculture economist Ashok Gulati. The panel will listen to grievances of the protesting farmers and the point of view of the government on the issue and is to submit its report to the court within two months. Within 24 hours of announcement, one of the panelists, Bhupinder Singh Mann, 81, had resigned.
Farmer leaders welcomed the Supreme Court’s order to stay the implementation of three farm laws, but said they would not call off their protest until the legislations are repealed and are not willing to participate in any proceedings before the committee appointed by SC. The leaders rejected the committee on the grounds that all its members were ‘pro-farm laws’ and have supported the new legislation at one point or another.
According to Yogendra Yadav, President of Swaraj India, in rejecting the SC-appointed expert committee to mediate between farmers and the Government, the farmers’ organisations have not only wisely sidestepped a possible trap, but they have also reaffirmed a basic principle of democratic accountability and responsible governance. He clarified that the expert committee appointed by the SC is not meant to advise the court on technical matters of agricultural marketing or on the implications of the disputed agricultural laws. The order of the Supreme Court makes it clear that the committee is to facilitate negotiations between the government and farmers’ organisations. That is precisely why the farmers’ organisations have objected to being forced into binding mediation, questioned the instrument of a committee and suspected the composition of such a committee.
The surprising fact is that the protesting farmers did not approach the court, nor did the government. A third party wanted the court to evict the farmers from their protest site. The other set of petitioners questioned the constitutionality of the three laws and wanted it to be scrapped. None of the petitioners prayed for mediation from the court. The court dismissed, rightly so, the pleas asking for eviction of the protesting farmers. It recognized the democratic rights of the farmers to engage in peaceful protest. As for the pleas, regarding the constitutional validity of the three laws, the court put this on the back burner saying that it will consider these at an appropriate time.
Constitutionality of these laws
As per Union of India v H.S.Dhillon (1972), constitutionality of parliamentary laws can be challenged only on two grounds — that the subject is in the State List, or that it violates fundamental rights. Is invoking parliamentary powers on agriculture consistent with the scheme of federalism and spirit of the Constitution? Does Parliament have the power to enact laws on agricultural markets and lands? Should the Constitution have been amended before enacting these laws?
These are some of the questions that will be raised in the petitions challenging the constitutionality of the Acts. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, and The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 do not mention, in the Statement of Objects & Reasons, the constitutional provisions under which Parliament has the power to legislate on the subjects covered.
Federalism essentially means both the Centre and states have the freedom to operate in their allotted spheres of power, in coordination with each other. The Seventh Schedule of the Constitution contains three lists that distribute power between the Centre and states. There are 97 subjects in the Union List, on which Parliament has exclusive power to legislate (Article 246); the State List has 66 items on which states alone can legislate; the Concurrent List has 47 subjects on which both the Centre and states can legislate, but in case of a conflict, the law made by Parliament prevails (Article 254). Parliament can legislate on an item in the State List under certain specific circumstances laid down in the Constitution.
In the State of West Bengal v Union of India (1962), the Supreme Court held that the Indian Constitution is not federal. But in S R Bommai v Union of India (1994), a nine-judge Bench held federalism was part of the basic structure of the Constitution. Federalism, like constitutionalism and separation of powers, is not mentioned in the Constitution. But it is the very essence of our constitutional scheme.
Legislative powers: Terms relating to agriculture occur at 15 places in the Seventh Schedule. Entries 82, 86, 87, and 88 in the Union List mention taxes and duties on income and assets, specifically excluding those in respect of agriculture.
In the State List, eight entries contain terms relating to agriculture: Entry 14 (agricultural education and research, pests, plant diseases); 18 (rights in or over land, land tenures, rents, transfer agricultural land, agricultural loans, etc.); 28 (markets and fairs); 30 (agricultural indebtedness); 45 (land revenue, land records, etc.); 46 (taxes on agricultural income); 47 (succession of agricultural land); and 48 (estate duty in respect of agricultural land).
In the Concurrent List, Entry 6 mentions transfer of property other than agricultural land; 7 is about various contracts not relating to agricultural land; and 41 deals with evacuee property, including agricultural land. It is clear that the Union List and Concurrent List put matters relating to agriculture outside Parliament’s jurisdiction, and give state legislatures exclusive power. No entry in respect of agriculture in the State List is subject to any entry in the Union or Concurrent Lists.
Prerogative: Entry 33 of the Concurrent List mentions trade and commerce, production, supply and distribution of domestic and imported products of an industry over which Parliament has control in the public interest; foodstuffs, including oilseeds and oils; cattle fodder; raw cotton and jute. The Centre could, therefore, argue that it is within its powers to pass laws on contract farming and intra- and inter-state trade, and prohibit states from imposing fees/cesses outside APMC areas.
However, like education, farming is an occupation, not trade or commerce. If foodstuffs are considered synonymous with agriculture, then all the powers of states in respect of agriculture, listed so elaborately in the Constitution, shall become redundant.
In cases such as State of Rajasthan v G Chawla (1959), courts have used the doctrine of “pith and substance” to determine the character of legislation that overlaps between entries. The constitutionality of legislation is upheld if it is largely covered by one list and touches upon the other list only incidentally. But the two new farm Acts go beyond that — they impinge on entries in the State List.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 flies in the face of Entry 28 of the State List (markets and fairs), and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 impinges on Entries 14, 18, and 46 of the State List, and Entry 7 of the Concurrent List. In interpreting the lists, the Supreme Court in State of Bihar v Kameshwar Singh (1952) invoked the doctrine of colourable legislation, which means you cannot do indirectly what you cannot do directly.
In ITC Ltd v APMC (2002), the Supreme Court upheld the validity of several state laws relating to agricultural produce marketing, and struck down the central Tobacco Board Act, 1975. It interpreted Entry 28 of the State List (markets and fairs) in favour of states, and rejected the Centre’s argument based on Entry 52 of the Union List read with Entry 33 of Concurrent List that tobacco is an industry declared as being under the control of Parliament in public interest. It said raw materials or activity that does not involve manufacture or production cannot be covered under ‘industry’.
Social Angle
Farmers feel that these laws are aimed at weakening the local market committees and empower the corporate sector. Thousands of farmers, mostly from Haryana and Punjab, have been protesting at several border points of Delhi since November 28 last year, demanding a repeal of the three laws and a legal guarantee on the minimum support price for their crops. The Sankyukt Kisan Morcha, an umbrella body of around 40 protesting farmer unions is on the lookout for legal options and garnering support from other states and groups, and is in a no-mood to give-up. As the days go by, the elders, women and children at the protest sites are gaining public sympathy.
The laws would jeopardize the food security and interests of the farmers in the country. If the Central government is sincere and honest to help the farmers, it should take measures to ensure MSP for every crop. This is what the farmers across the country have been asking for decades. The government, if it is farmer-friendly, should give MSP to the farmers, buy their crop and pay their money directly into their bank accounts.
Several small and medium landholders who own less than 4 hectares of land are renting out their fields to large farmers, as they cannot afford capital-intensive agriculture. Across India, during two decades (1990-91 and 2010-11), the number of marginal and small landholdings (less than two hectares) grew from 83.5 million to 117.6 million. But in Punjab, marginal and smallholdings fell from half a million to 0.36 million during the same period. The number of semi-medium, medium and large (more than two and over 10 hectares) increased from 0.62 million to 0.69 million which shows poor farmers are either selling land or renting it out to big farmers. The decline in small landholdings in Punjab shows that it is not viable under modern capital-intensive farming. There are only four per cent farmers in India who own more than 10 hectares of land.
In several countries across the world a lot of subsidies are being granted by the Government to encourage farmers and also to cover up any loses. In Canada, there are no mandis, but the trader pays a reasonable sum of money to the farmer against the procurement of food grains, vegetables and the fruits. The Government encourages the farmers to cultivate well and ensures their hard labour yields a good sum for their livelihood. In USA, prior to the free market, almost 40 % was shared with the farmers, which later was reduced to 15 % after the entry of private partners. In UK too, the open market has been discouraging for the farmers. In India, neither the Government nor the big corporates can be trusted, when it comes to power or money. Moreover the farmers have no trust in the Government as every sector is being privatized, be it the Railways, Airlines, Education, Oil and Natural gas, mobile networks, healthcare, etc benefitting a few corporate houses.
Several problems have plagued the farmers right across the country from various causes for several decades now. According to some reports, nearly 1,40,000 farmers have committed suicide over the past five years due to loss of income and debt. In reviewing the previous efforts towards aiding the agricultural sector, the government had constituted the National Commission on Farmers (NCF) in 2004 with Professor M.S. Swaminathan as its chairman. The final report suggested for inclusive growth of farmers and agriculture sector. The Report aimed at working out a system for food and nutrition security, sustainability in the farming system, enhancing quality and cost competitiveness of farm commodities and also to recommend measures for credit and other marketing related steps.
Dr Swaminathan had requested the government to implement the recommendations given in the report so that it could provide minimum support price for grains, safeguard the interest of small farmers and addressing the issue of increasing risk overtaking agriculture as a profession. It also recommended for Land Reforms, Irrigation Reforms, Productivity Growth, Credit and Insurance, Food Security and Prevention of Farmer Suicides. Many of these recommendations if it were carried forward would have greatly altered the cause of the farmers and spared them of many a crisis and even the current standoff to a certain extent.
A Christian Perspective
The entire scripture instructs us in our responses to our current context no matter what they are. Underlying many of the contexts are issues of injustice and marginalization. So the Scripture presents to us a God who is constantly responding to those situations. In the Old Testament, ethics is fundamentally theological, where ethical issues at every point are related to God, to his character, his will, his actions and his purpose. We find the Israelites oppressed and in slavery in Egypt, crying out under intolerable conditions. God hears their cry, and he acts.
There is a saying of St. Augustine, which has particular relevance in this context: ‘Take away justice, and what are kingdoms but mighty bands of robbers.’ The promotion of justice therefore, is essential to the mission of the Church. There simply is no sharing of the good news of Jesus Christ if the commitment to justice is downplayed or eliminated. This is all easier said than done – because in doing so we will have to oppose the powerful and other vested interests; these could be the Government, the corporate sector (the ones destroying the livelihood and lives of our farmers) and the mining mafia. Whether it is in the countries of the Amazon or in countries like India, resisting the powerful on behalf of the poor means that one has to pay a price.
Jesus was deeply concerned about the deep-rooted injustices of his time and took a visible and vocal stand against them. The role model of the Church is none else but Jesus Christ who minced no words in challenging priestly class and castigating its supremacy. He discounted practices that were creating hurdles in doing good to people. He took head on the injustices thrust upon the people by the ruling class. Jesus was never apolitical; the Church is not meant to be and cannot be apolitical particularly when rights and values are threatened. It can no longer remain a silent spectator or stand on the sidelines but must raise a prophetic voice. The current situation in India characterized by violation of human rights, denial of justice and basic freedoms guaranteed by the Constitution of India, and domesticated media is definitely not playing its role require the people of God to speak up. The Church could be apolitical if politics is viewed only from an electoral or party angle. But politics also refers to activities aimed at improving people’s living. If so, it means speaking up for good governance and raising voice against bad laws. John the Baptist openly challenged and questioned the ruler’s injustice and awakened the human conscience against it. The time is ripe for the Church to reiterate its role, modelled after Jesus Christ and John the Baptist. The Church has to take sides in exactly the same way that Jesus took sides with the poor and the marginalized, the exploited and the excluded, the outcasts and ostracized of His time. At a time when governments are building walls separating people and breaking down bridges among them, the Church has to swim against the current. It has to become an institution to ‘build bridges and break down walls.’ The Church in India can no longer remain a silent spectator, stand on the sidelines and pretend that it is apolitical.
Conclusion
From low productivity to fragmented landholdings, lack of storage infrastructure and high indebtedness, there are several reasons for persistent agrarian distress in India. Agriculture, which employs half of India’s population, has long been in desperate need of reform. But the new and controversial bills are unlikely to be a panacea for farmers’ troubles.
Experience across the world has shown that corporatization of agriculture, contrary to improving farm incomes has often depressed them. There are leakages in the current system, and it needs to be reformed, but replacing one failed model with another is not the solution. Evidence from states where farmers haven’t benefited even after wholesale markets were dismantled supports this argument. There are no easy answers. But experts agree that in a country where agriculture employs so many millions, leaving farmers’ fates to the vagaries of the market cannot be the only answer.
One needs, however, to differentiate between ‘politics’, which is about people: their rights and duties; governance; fair and equitable distribution of resources, justice; and ‘political parties’ which is about particular groups/ideologies which seek/work for power in order to control the lives and resources of others. The Church will be failing in its duty if it remains a mute spectator or reacts feebly against those who trample upon people’s rights. It becomes incumbent upon Church leaders to stand for social justice and not to be seen in cahoots with the ruling class, which fails ordinary people.
Manoj Varghese is a Media and Communication Expert. He writes very regularly on the Current Trends. His involvement on the current issues at the ground level has brought reflections close to the realities. As a family they live in Delhi. He has a Master’s in Science and Technology Communication.