Will APMC reform dismantle Self Reliant India?

The APMC (Agricultural Produce Market Committees) Act has ensured that each farmer in even the remotest part of the country gets fair treatment and equal opportunity to sell his produce. Citing Bihar's failed experiment Indra Shekhar Singh opines that the proposed changes to this Act by the Union Government will threaten farmers income security.

Hyderabad:The Finance Minister rightly spelt out that, all sectors are free to sell across the country, so why shouldn’t farmers be allowed to do the same? On the surface, this sounds like a fair proposition, but is it?

To delve deeper into this question, we need to go back to founding ideas of the Indian Constitution. After 350 years of exploitation by the East Indian Company, (world’s first agri-business MNC), the Indian farmers were reduced to mongrels.

Thanks to Winston Churchill’s eugenic policies, the Bengal experienced the Great Famine and rest of the country was destitute, while the Viceroy’s parties overflowed with ‘Gin and Tonic’.

Having witnessed the rampant exploits of the Agri-corporations, Indian lawmakers through the Seventh Schedule (Article 246) placed “agriculture” in entry 14 and “market and fairs” in entry 28 of the State List. So never again, does India experience such a brutal takeover of her farms.

They wanted to give States paramount autonomy over their own farms and produce, as each one size didn’t fit all farms and markets. Each area and agro-climate was different with its own set of social and economic practices; a central control would be a policy blunder, and also outright tyranny.

The APMC (Agricultural Produce Market Committees) Act, ensured that each farmers in even the remotest part of the country, at least gets fair treatment and equal opportunity to sell his produce, and it even acted as a stop-check for the traders and retailers, where they could ensure standard quality and hygiene, while no farmer or trader had a unfair bargain.

The APMC committee were drawn from local representatives, including farmers and traders from the area. Once leaks were witnessed, where farmers were fooled into selling their produce under pressure to traders or for an unfair deal, law makers expanded the ambit of APMC to cover area beyond the Mandi yard and even inter-state trade.

This was done to regulate the system and also ensure that the minimum support prices reach the farmers. Without the mandis it would be near impossible to deliver the MSP to farmers. The private industry still cannot be trusted to deliver the support price much like the trader.

Historically, we have seen with the rise of Agri-business giants like Cargill, Louis Drefyus, etc in the US and the world, once the regulations safeguarding price control was removed. The Farmer Co-operatives were systematically broken down and “market forces” led to a new era of agrarian slavery in the US. The result, American farm debt stands at $425 Billion in 2020 and four companies controlling over 70% of the world’s grain supply.

Curious case of Bihar

Bihar in 2006, did rescind the APMC Act, trying to woo private sector to move into the state and invest in supply chains and market infrastructure, all for the sacred Price Discovery. On the ground the opposite happened, the agri-business did not invest, but the farmers were further squeezed by the traders, who even paid a lesser price for the produce, due to lack of APMC act and then packed up the grains to sell in mandis across Punjab and Haryana, year after year. Now illegal trade was made legal, and farmers were depressed further.

The real problem - India need over 50,000 mandis and yet we have managed to create only 7000 regulated ones. As per report 94% farmers still don’t have access to them and of course there is the issue of corruption.

Each human made system, is vulnerable to greed and corruption, democratic governments are perhaps the biggest victims. Does that mean we dismantle democracy because there is corruption and malpractices? No, and but the using the same logic, our government has sacrificed the farmers for the growth of agri-business and ‘agri-dollars’.

What should have been done is quite the opposite, the Government should have ensured that each should get MSP and fair prices at the nearest Mandi and not that now farmers can sell anywhere in the country for lower than MSP prices. We need to reform the system not abandon it. As for FM logic and comparison with other sectors, it is not sound.

India also has restrictions on land sale (agricultural) in Himachal and Uttrakhand, should that be done away too, along with land ceiling? Not all measures are economic, they have to safeguard people too. The FM should not take half measures, either we should liberalise in all aspects, for this piece-meal approach is going to ruin our fatigued agrarian sector.

Finally we must consider, what if a few years from now, the Bihar scenario becomes a pan-India model and while farmers are crushed due to falling incomes and higher costs of production, Indian agriculture becomes not ‘self reliant’ but reliant on Agri-business.

India cannot go the US way and open the ‘farm-gate’ for business, if it wants to safeguard its farmers from the onslaught of another East India company.

(Written by Indra Shekhar Singh, Director - Policy And Outreach, National Seed Association of India.)

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