Weakening mandis to rising inequality: Here's why new laws worry farmers

 

The ongoing agitation in Delhi by farmers and farmers' unions from across India, especially from Punjab and Haryana, seeks to pressure the Centre to withdraw the laws.

The new farm laws that aim to double farmers’ income in two years by deregulating agricultural markets may further widen the inequalities in the sector, shows our analysis of similar legislations from the past. By weakening the government’s price guarantee system, the laws may end up hurting small and poor farmers, who form 80% of the sector and 23% of those who live below the poverty line, say critics.

The privatisation of the sugarcane industry in 1998 and the deregulation of Bihar’s Agriculture Produce Market Committee (APMC), the state-regulated marketing board, in 2006 removed licensing barriers to agricultural markets. But, as we explain later, this privatisation led to no significant changes--the sugarcane farmers are still agitating for fair and timely payment of dues and Bihar’s agricultural infrastructure has not seen any sizeable private investment.

The ongoing agitation in Delhi by farmers and farmers’ unions from across India, especially from Punjab and Haryana, seeks to pressure the Centre to withdraw the laws. Their primary demand is for a statutory minimum support price (MSP), and their main objection is to the opening up of agricultural sales and marketing beyond regulated APMC mandis (government-approved wholesale markets). This, they believe, will kill the mandis and allow exploitative private players to set the terms of purchase from farmers.

The weakening of the established mandi system could further weaken the already floundering system of assured procurement at MSP set by the government, farmers argue, since only two crops--wheat and rice--are procured at MSP by government agencies (and 21 others for which the government announces an MSP are not).