Resource centre on India's rural distress
 
 

By amending Model Mandi Act, MP has pushed its agricultural sector into throes of uncertainty -Sunit Arora

-The Indian Express

The state has posted high growth rates in the agricultural sector in recent years, but the growth has been skewed in favour of the state's irrigated parts and a small number of crops.

Madhya Pradesh is primarily an agricultural state. One third of its gross state domestic product comes from this sector, half of the state’s area is used for cultivation, and 70 per cent of the total workers and 85 per cent of the rural workers are dependent on agriculture for livelihood (“Madhya Pradesh Agriculture Economic Survey” 2016). The state has posted high growth rates in the agricultural sector in recent years, but the growth has been skewed in favour of the state’s irrigated parts and a small number of crops. High agricultural growth has, thus, been accompanied by an increase in the number of farmer suicides and regular incidents of dumping of unsold produce on the highways by farmers due to sharp declines in prices. Farmer agitations, taking place at frequent intervals in the state, have, however, failed to attract national attention, barring the 2017 Mandsaur incident in which five protesting farmers died.

The Shivraj Singh Chouhan led BJP government in the state has put all its weight behind the new agricultural laws, giving verbal assurances to the farmers that the reforms will give them more freedom, help in augmenting their incomes and act as a cushion against adverse price fluctuations. These claims merit a close scrutiny.

The first claim is that the reforms will not affect the functioning of the mandis. Now, the Krishi Upaj Mandi Act, 1972, which governed the state’s 259 mandis, was recently amended, and the Model Mandi Act passed in May 2020 allowed traders to make purchases outside the mandis without any levy. Even though the state government has repeatedly tried to assure farmers that mandis will not be affected by the new farm laws, in the first six months of the amendments, there has been a significant decline in their business. Moreover, a reduction in mandi cess on the traders from 1.7 per cent to 0.5 per cent in October this year has weakened the revenue-generating capacity of the mandis.

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