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India: Farm Bill Retreat Win For Few, Loss For Poor Farmers, Debunking Food Processing Industry – Analysis

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India’s Opposition is overjoyed with the triumph over the retreat of farm bills. They were jubilant for their democratic rights to win against Modi’s autocratic democracy, cursing strangling of poor farmers’ voice and the death of  700 farmers. They were exultant over Modi’s defeat of arrogance and rattling of his charisma as an incremental reformer . Opposition members vented anger against the way bills were passed. The Government did not discuss with the farmers elaborately or bills were not sent to joint parliamentary committee, which are the usual procedures under democratic route. Eventually, given  the repeal o the farm bill, the oppositions embarked on a new hope to regain political outreach, roping in other oppositions, to lambast NDA in the forthcoming state elections, particularly in UP and Punjab.

But, the reality is different. Eyebrows are raised over the repeal of the farm bills and its impact on poor farmers. Some observers argued it a boomerang and plight of poor farmers is unlikely to abate. Poor farmers were little concerned over the  procedural systems to pass the bill. They are more concerned whether the new bills unleash benefits and unchain them from the clutches of middlemen.   

Amidst contradictions and surprise to many, West  Bengal Chief Minister Mamata Banerjee – the staunch opponent to Modi – refrained from joining  the protestors, except giving lip service. Chief Minister of Orissa, Navin Patnaik – one of the major states for poor farmers- preferred to step in the shoes of Mamata. Erstwhile Punjab Chief Minister, after a few hick-ups, lamented the prolonged agitation, blaming damage to Punjab industries.

Needless to say, new farm bills became a sword of Damocles for rich farmers. Protests were master minded by them only. Poor farmers were the front line soldiers in the milieu of protest. Rich farmers were mustering high profits through Mandis and MSPs, which were launched to protect the poor farmers. Mandi system (a whole sale trading centre) and MSPs –  part of APMC   – were  launched in early 1960’s.  Aims were to protect poor farmers from the clutches of fraudulent middlemen and unprecedented  climatic conditions . With the time passed, real objectives  of Mandis and MSPs were mutilated, given the  growth of the economy and the political influences, which have long been flawed. Rich farmers become wealthier and poor farmers continue to reel under poverty. 

Nearly 80 percent of the farmers in India are small holders of land. Mandis and MSPs are no more insulation to them. Instead, they become tillers in the land of rich farmers, who seized influences in Mandis and MSPs operation, to reap the benefits, in addition to huge government subsidy and tax havens in agriculture.

Punjab is the richest State and West Bengal is the poorest in terms of farm income, according to a recent survey.  Notwithstanding, Punjab is the is the biggest buyer under MSP.  In 2019-20, 39 percent and 30 percent of wheat and paddy respectively   were procured  from Punjab under MSPs.  West Bengal and Uttar Pradesh are the biggest producers of rice and wheat respectively. But, they are the least beneficiaries of MSPs. The new farm bill vowed to turn down the anomaly by withdrawing Mandi and remodeling MSPs, so that the benefits should reach the poor farmers. 

Another important aim of new farm bills was corporatization of agriculture. It would pave the way for mechanization of farming and leverage commercial farming, It could be a big support to the poor and small land holding farmers, who are lacking marketing expertise and farming technology. Commercial farming are usually capital intensive. To this end, private investment will create better opportunities for small holding farmers. Corporatization of farming could  have enhanced scope for selling of agricultural products through proper marketing channels, in house research and development facilities.  

At present, farming in India is informal in nature. It is undertaken by family members by  poor and small holding of land farmers . Farming lacks modern farming with big machineries like tractors, combine harvesters, rice planters and so on. Contract farming, which is an important component for  commercial farming, is a distant future. The Farmers’ (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill 2020, ensured guaranteed purchases at a pre-determined prices. This would  have protect the poor farmers from the volatility in prices under the under the farm bill.     

The repeal of farm bills opens Pandora’s Box for food processing industries. Currently, only 2 percent of agricultural products are processed, as compared to 40 percent in South East countries. The Farm Bill repeal will nix the recently launched PLI scheme (Production Linked Incentive) and force the industry majors on back foot to invest in the industry. Nestle Chairman and MD said, “the bill would give a boost to food processing industry”. The major food processing stake holders were ready with a blue print for enhancing the capacity of their industry. In some states like Karnataka and Maharashtra, much headway was made by establishing collection centre.  

In summing up, the repeal of farm bill stretches the plight of poor farmers and brings a backlash against the potential growth of food processing in the country. 

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Subrata Majumder

Subrata Majumder is a former adviser to Japan External Trade Organization (JETRO), New Delhi, and the author of “Exporting to Japan,” as well as various articles in Indian media, including Business Line, Echo of India, Indian Press Agency, and foreign media, such as Asia Times online and Eurasia Review .

One thought on “India: Farm Bill Retreat Win For Few, Loss For Poor Farmers, Debunking Food Processing Industry – Analysis

  • December 4, 2021 at 11:03 pm
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    You dont say anything positive. Implied family wage per quintal is taken at less than Rs 2000 per quintal, so with say 25 quintals of produce per ha the implied wage even if it were paid & even if we had 1 full ha land works be only Rs 50000 per annum. Instead of waxing eloquent about wage labourers how about saying something about how to make farming & forestry remunerative? We need Rs 35000 per month to be able to build a house after some years & send kids to school. That is why we need a guaranteed MSP with a legally binding fair implied wage.
    Figure out why we need the guaranteed MSP for all crops as the way to get minimum guaranteed income for farmer& farm & forest worker as demanded by unions instead of your nagging.

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