Why the 3 agro bills are important for the Indian Farmer and the country?

The passage of the 3 bills on agriculture by the Indian Parliament is much like the epochal 1991 budget of the Finance Minister Manmohan Singh under the Prime Minister P.V. Narasimha Rao. At the time when the budget was introduced, Rao had little support for economic reforms. There was no consensus in his party, let alone across the political spectrum. We now hail that as the watershed budget for economic reforms which changed the course of India altogether.

Similarly, the year 2020 will go down in the history of India, perhaps more prominently than 1991, as agriculture is bread and butter of India. No party in Government would take risks that may cause the wrath of the majority of voters. Successive governments have preferred to limit themselves to short-term gains but no quantum measures for curing the ills as they are afraid of playing with the farmers’ sentiments. Clear vision, a firm resolve and commitment are needed to bring Indian agriculture out of the morass in which it is in now. The lopsided and piece-meal management methods let filth to accumulate and need to change. The three bills do that in one go. The results of that, the farmers who are the main stakeholders will smell within one cropping season and get reassured in a year.

For the produce of the Farmer, the entire country is the constituency. The Farmer is the king as many traders/consumers line up to buy his produce, and he may end up getting more than MSP, justifying the word “Minimum” in MSP. The minimum is the minimum but ideally, should be exceeded as in the case of MRP, which should not be exceeded. The glut in the market, scarcity in the market will be things of the past when the farmers were obliged to sell their produce in the AMY (agriculture market yard). Unforeseen damage to the crops, e.g., flood, rain, pests etc. are absorbed by the advancing parties/trader largely.

Previously, crops like an onion which were designated as essential crops were under State control. The onion was being imported to regulate the domestic price leading to a huge difference between seasonal and unseasonal price realisation for the farmers, although at the national level the country is in surplus. Not now. As the Farmer of Maharashtra can sell it in the open market competitively or export directly.

Take the case of tomato, a principally winter crop (December-February) in many States; the total production is much beyond the domestic demand, but export is low due to low quality leading to a loss for the Farmer in the winter when glut happens. In the new scenario, investors will compete to sponsor the Farmer towards increasing the quality of the crop, which is a win-win situation for the Farmer and the country as a whole.

Take the case of the mainstay crops of rice, wheat, sugarcane, pulses and oilseeds. We produce more rice and wheat than we require. Our rice constitutes a fifth of the world’s external rice trade. Wheat’s production exceeds local consumption by about 3%. Sugarcane’s production is surplus to the extent that the sugar mills wait for subsidies from the Govt. to export their produce. There is dire need to infuse measures to reduce the cost of production to be able to compete with countries like Brazil and Thailand.

Added to these is the issue of water availability and the so-called water economy and shortage. Punjab’s wheat productivity is highest at 5.2 tonnes per hectare. But Punjab’s excess wheat can’t reach the export market due to the high cost of production. The result is the farmers wait for Govt. procurement at MSP and the stockpiling of Godowns in which they often get rotten. Similar is the case of Maharashtra’s Vidarbha where sugarcane is produced because of the sugar cooperatives, but the sugar producers wait for subsidies to export excess sugar as their cost prohibits them from competing with countries, e.g., Brazil or even Thailand.

In terms of water economy, it may appear prudent to wean Punjab farmers from wheat but not so because it is rice which also should be addressed simultaneously. Better alternatives to the premium rice varieties, e.g., Basmati rice that they produce and export should be implemented as the water consumption for 1 kg of rice is as much as 2500 litres in that State, the maximum against much lower consumption in other States. Punjab farmers have to concentrate on decreasing the cost of wheat production to make their produce competitive. Similarly, the farmers of Bihar/UP/Uttarakhand should be encouraged to grow sugarcane, and the farmers of Chhattisgarh and Uttarakhand to grow rice.

Thus a reset of priorities has to slowly take place in the country at large so that the Farmer is benefitted, agriculture becomes attractive and the country benefits. The three bills on Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services, Farmers’ Produce Trade and Commerce (Promotion and Facilitation) and Essential Commodities (Amendment) respectively provide that.

Vested, regional interests and the so-called benevolent custodians of the farming community who they treat as their voting constituencies are in jitters and oppose tooth and nail. Their criticism is understandable.