Why the new farm laws will not level the playing field -Arjun Harkauli

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published Published on Oct 27, 2020   modified Modified on Oct 29, 2020

-Down to Earth

Creation of unregulated private points of sale will only ensure that the produce continues to be sold as before — at below MSP and without any government support

More than 86 per cent farmers in India own or cultivate on less than two acres of land and have little surplus to sell. They are the victims of middlemen (arthiya) at the mandis (local exchange markets) and are forced, by circumstances, to sell their produce at very low prices often below their input costs.

The perishable nature of their produce also puts pressure on them to sell it off quickly, and which has skewed their bargaining position. Their produce is ‘risk-intense’ and often a victim of untimely rains, droughts, hail storms, infestation, etc. This often leads to partial or total loss of the farmer’s crop and income.

They have no meaningful crop insurance: This has been the reason for farmer loan defaults and over three lack farmer deaths over the past two decades. In 2019 alone, over 42,000 farmers and labourers died by suicide. The Economic Survey of India 2018-19 recommended a development strategy based on increasing incomes of this distressed segment.

Even in cases when farmers have a good crop, experience shows that they are unable to secure the minimum support price (MSP) at mandis. The MSP is the scientifically calculated government-announced minimum purchase price for crops, based on factors such as input cost of fertilisers, electricity, water, diesel, machinery, family labour, etc.

Cane farmer’s associations, for example, have sold their produce at less than half the MSP in Uttar Pradesh and are still waiting for their mandatory dues from 2014-15.

The matter is now with the Supreme Court. Corn growers — after the three contentious farm bills were passed in Parliament — have not secured the MSP. The Swaminathan Commission had recommended input costs to include costs plus family labour. Its recommendations, however, have not been implemented by any government so far.

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Down to Earth, 27 October, 2020, https://www.downtoearth.org.in/blog/agriculture/why-the-new-farm-laws-will-not-level-the-playing-field-73959

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