A sound implementation plan will ensure that the reforms are implemented efficiently. For the reforms to succeed, the state governments’ participation and involvement is necessary. It will ensure implementation of the new farmers bills at the ground level. They should play a facilitating role, in ensuring electronic registration of contract farming agreements between parties.
The procedures for obtaining credit should be simplified. Credit from banks should be made readily available on the basis of warehouse receipts, so that smallholder farmers can store their produce and also sell it when prices are higher. The Agriculture Infrastructure Fund ought to genuinely benefit the small farmers. For small-scale farmers to effectively participate in the national market and contract farming, capacity and skill development is essential; as are basic marketing and negotiation skills.
Minimum Support Price
The Punjab government’s act makes non-payment of MSP a punishable offence, irrespective of procurement by the government. The Government of India may also introduce an act or ordinance making MSP legally binding. The responsibility for implementing this should be clearly fixed with relevant authorities.
For small-scale farmers to effectively participate in the national market and contract farming, capacity and skill development is essential. So is basic marketing and negotiation skills.
E-trading has to be available at the APMC mandis under the new farmers bills. It will, reduce investment and transaction costs. The middlemen/intermediaries from the APMC mandis could become facilitators between farmers and firms that want to contract the farmers. It is possible that the larger companies located in urban areas are unable to reach many small farmers to sign contracts. They may engage these middlemen as well.
Many APMC markets are receiving lower volume of produce. But ironically, the same traders are buying outside mandis because they can evade taxes. If MSP is legally binding, then the government must ensure that private trade is not allowed to thrive. Does the government have the budget to buy produce from all farmers?
Taking control of APMCs
Only consumers can help farmers, not the government. Farmers must come forward as Cooperatives, FPOs or as any other collective organization. They must take charge of all APMC mandis and deal directly with buyers. The state government should hand over all APMCs to farmers. This will give full control of market prices to farmers. Farmers must have direct control of APMCs, to get a fair share of profit.
Contract farming should be facilitated and the private sector should have freedom to negotiate with farmers with minimal state interference. An independent arbitration mechanism will help in a big way. The procedure for registration should be prescribed by State Governments. De-politicisation of the relevant authorities, including the Registration Authority, Sub-Divisional Authority, and Appellate Authority is crucial.
Regional languages for farming contracts
It is important to ensure that all necessary documents are available in regional languages. Such documents must use simple language and avoid complex judicial terms and fine-print. The government can set up farmer grievance courts, in the manner of consumer courts, to examine farmer complaints and contract violations by companies. Such courts must have the authority to levy punitive fines to discipline companies and traders.
If MSP is legally binding, the government must ensure that private trade is not allowed to thrive.
The implications of the reforms on technology development need to be assessed by technocrats. It is technology that will feed the markets and bolster farmers’ income. The contractors, food processing and/or marketing companies have to understand the traditional farming practices to preserve soil health and prevent proliferation of disease and pests. Traditional practices must be preserved to ensure sustainable food production. Restrictions placed by market-oriented agriculture or contract farming should not disregard them. That will also ensure that India’s commitment to the United Nations Sustainable Development Goals (SDGs) stays in focus.
The central and state governments should establish a monitoring mechanism to assess the progress of the new farmers bills in an objective manner. A suitable index of prices received for select commodities in 2020 may be used as the baseline to monitor progress or impact over future years.
Image courtesy Pixabay
