In September, the Centre enacted three new agricultural laws aimed at reducing the continued exploitation of farmers by intermediaries in the agricultural market and increasing farmers’ incomes by providing remunerative prices for agricultural commodities. But the farmers are continuing their agitation, claiming that the new laws would have a deleterious effect on their livelihoods.

Are the alleged reasons of this agitation justifiable? If the new laws are repealed, will the market freedom of farmers provided by these laws suffer a setback? The farmers have cited two main reasons for their protest. One, the government will suspend the Minimum Support Price (MSP) scheme, which has been in effect for many years. Two, legal action should not be taken against intermediaries by blocking the traditional relationship between intermediaries and farmers. It is indeed perplexing to see farmers raising their voice in favour of those intermediaries who have been exploiting them for years.

A long-standing demand of farmers that intermediaries’ dominance from the market should be removed has been fulfilled by the new laws. Without the intermediaries and without anyone’s compulsion, farmers can now sell their produce to those who pay the highest price. What is wrong with this? Why should the government be blamed when it has fulfilled the long-standing demand of farmers?

Not only researches but various committees set up by the Central and State Governments have confirmed that the dominance of middlemen in the market is the prime reason for farmers being denied a fair price for their produce.

If one interacts with any farmer anywhere in India, he will definitely express his desire to get rid of middlemen. But the protesting farmers demand that the role of middlemen in the market should not be reduced and no punitive action should be taken against them. How can it be accepted? Will other States’ farmers accept this demand?

Minimum support price

There is a false propaganda that the new agricultural laws will stop MSPs for crops. Since 1965, the government has been announcing MSPs for a total of 23 crops, including wheat and paddy, based on the recommendations the Commission on Agricultural Expenditure and Prices. Although the number of farmers benefiting from MSP-based procurement is very small, policymakers are well aware of the consequences of removing the MSP. When this is the case, will anyone seek to rollback MSPs?

Although the MSP for crops is important, data show that not all States’ farmers benefit from this scheme. The National Sample Survey Organisation, which conducted a nationwide survey known as the Situation Assessment Survey of farmers in 2013, revealed that only 31.5 per cent of paddy farmers and 39.2 per cent of wheat farmers were aware about MSP. Shockingly, the awareness level among farmers who cultivate pulses and oilseeds is only 10-20 per cent.

Further, the survey found that farmers sold only 6 per cent of paddy and 19 per cent of wheat at MSP. Punjab is the largest State that has benefited from MSPs over the years. Farmers in the State have benefited much from the 1970s to the present day by selling paddy and wheat crops at the MSP.

For example, in 2019-20, Punjab alone accounted for 21 per cent of the total paddy crop and 38 per cent of the total wheat procured at MSP. Fearing that their livelihood would be at stake if the MSP scheme is removed, Punjab’s farmers are compelled to stage a sit-in protest.

What to fight for

No government would want to bring in legislation that would affect the majority of farmers. These enacted laws will not only reduce the dominance of middlemen in the market, but also provide simple ways to sue middlemen who exploit farmers. Only such laws can increase the bargaining power of farmers in the market. Therefore, instead of opposing these laws, farmers should demand the government to enact some more laws in addition to these laws to increase farm income.

First, farmers have long suffered from not being able to sell crops other than paddy and wheat at MSP. The support price declared by the government can be realised only if the crops are sold at the government procurement centres. Therefore, farmers must fight for the enactment of a ‘Right to Sell at MSP’ Act.

Two, even after the enactment of new agricultural laws, which allow free trade of agricultural commodities, exports of agricultural commodities such as onions are still banned. This is against the new law. Just as the farmers of Maharashtra raised voices against this ban, farmers of other States must also fight to ensure that such a ban is no longer imposed.

Third, despite achieving record production in horticulture crops, there is no minimum support price for horticultural crops. As a result, farmers who grow crops such as tomatoes, potatoes and onions face many difficulties every year in getting remunerative price. Therefore, as introduced by the Kerala Government, farmers must fight for an MSP scheme for horticultural crops at the national level.

Four, as suggested by the Santhakumar-headed Committee (2015) on Restructuring of Food Corporation of India, farmers must urge the government to procure other crops such as pulses and oilseeds to help the non-paddy and wheat growing farmers. There is nothing wrong with farmers protesting to secure their own rights, but why to protect the interests of the malicious intermediaries?

Narayanamoorthy is a former Member (Official), Commission for Agricultural Costs and Prices, and Alli is Senior Assistant Professor in Economics, Department of Social Sciences, Vellore Institute of Technology. The views are personal.