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The farmer’s agitation against the New Agriculture Bill, on the Delhi border continues on the 23^rd day of the protest. They are still standing with the demand to repeal the central farm laws, by the Central Government.

On Thursday, 17^th December 2020, a group of economists claimed that the New Farm Laws are not in the best interest of small and marginal farmers, together they wrote to Central Agriculture Minister Narendra Singh Tomer requesting the government to repeal the central farm laws.

Thoughts Of Economists Over The New Farm Laws!

Economists have shown their interest in the new Farm Law and have pointed out the demerits of the new reforms brought in the bill. They said, “We believe that improvements and changes are required in the agricultural marketing system for the benefit of millions of small farmers, but the reforms brought by these Acts do not serve that purpose”.

On the provision introduced in the new Farm Bill, for unregulated ‘trade area’ outside APMC ‘mandis’, they said, that The old Farm Laws had mechanisms to address and prevent market manipulation in the APMC markets that existed. However, the central Act contemplates no such mechanisms in the unregulated trade areas. Further, they added, there would be no safeguards for farmers in case of non-price means of exploitation such as weighing, grading, moisture measurement, etc. in the unregulated trade areas.

Economists highlighted the point that the APMC market yards still set the benchmark prices through the daily auctions and offered some reliable price signals to the farmers. The absence of these benchmark prices in the new fragmented markets could pave the way for local monopsonies. Economist to explain this point, citing the example of Bihar where farmers have less choice of buyers and less bargaining power, resulting in significantly lower prices compared to other states, since the removal of its APMC Act in 2006.

On the law of Contract Farming, economists expressed that while contract farming arrangements are voluntary in principle, the acute crisis in agriculture with no price assurances may push farmers towards this paradigm in the hope of saving themselves from the crisis.

They also believe that the new farm laws may confine the state government’s role in regulating agricultural markets, this would adversely affect the farmers.

They said that State government machinery is much more accessible and accountable to farmers, right down to the village level. Thus, state regulation of markets is more appropriate than bringing a large part of commodity sales and trade under the control of the central govt Act, by establishing trade areas.

Economists said that the New Farm Law may result in consolidating the market and the value chains in agricultural commodities in the hands of a few big players, as has happened in other countries such as the USA and Europe. Ultimately this can lead to the ‘Get-Big-or-Get-Out’ dynamic in those countries, pushing out the small farmers, small traders, and local agri-businesses. Economist fears out, the same situation may arise in India also.

Referring to these points relating to APMC mandis, trade areas, contract farming, and dominance of agri-business, the economists believe that amending a few clauses will not be sufficient to address the concerns rightly raised by the farmers.

Economist That Wrote To The Agricultural Minister!

The economists who wrote the joint letter included Kamal Nayan Kabra (retired professor, IIPA, New Delhi), D Narasimha Reddy (retired professor, University of Hyderabad), R Ramakumar (professor, TISS, Mumbai), Arun Kumar (Professor, Institute of Social Sciences, New Delhi), Vikas Rawal (associate professor, JNU) and five others.

Economists said that it is very wrong to percept that farmers are misled by others, in fact, they are raising valid and genuine concerns. As per the economist “the New Farm law is not in anyone’s interest, thus it is now the responsibility of the government to proactively resolve it by addressing the farmers’ concerns.”

Now it will be interesting to watch, how the central government reacts to this letter of economists and what steps it takes towards the same request.

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