Agriculture In Market

Corporate Food and Agricultural Regime

Tushar Chakraborty

Agriculture in India is not just facing occasional challenges. It is being driven through a very painful process. In economical term it is known as agricultural transition. In legislative and political parlance, the same is called agricultural reform. This transition is the pivotal feature of globalisation in India. The empirical features of this transition is highly contentious and agonising. The dictum to work for this transition in India was prescribed, and then supervised and financed by IMF, World Bank, USAID and similar global agencies which are basically controlled by America. Those policies were initially endorsed in the National Agricultural Policy, 2000. However, the concomitant farmers suicide and despair was visibly shocking. Rural India faced a disaster unprecedented in history. National Agricultural Commission was set up to look into those disturbing symptoms. Five reports on the causes of farmers' distress was prepared under the leadership of M S Swaminathan between 2004 and 2006. Swami-nathan report advocated some agricultural policy reforms to save farmers. In practice, pro-farmer advocacy in Swaminathan reports, from then on, are being used as a necessary temporary break or decelerator of agricultural reform, as and when needed. These are recalled, only when protest by farmers and their allied forces against transition policies become very strong. Often, these protests cut across all traditional political barriers. Citation and promise of remedial actions based on Swaminathan report becomes a face-saver for the government. It allows some temporary pause. The UPA government under Dr. Man Mohan Singh faced one such farmers' wrath around the year 2014, which decimated Congress in parliamentary turf. At present, similar situation is arising again. This time wrath is directed against PM Modi and his party–Bharatiya Janata Party (BJP). The agricultural acts enacted by Modi government to facilitate direct corporate entry and investment in Indian agriculture, and dissolution of state control over food and agriculture, alarmed the entire farming community. They are now united in their protest in most of the agricultural states. Punjab and Haryana is the epicentre of this revolt, albeit it is still an agitation by big farmers.

If anything, the treaty known as US-India Knowledge Initiative on Agriculture, Education, Research, Services and Commercial linkages, known as AKI in short, which was signed by the then Prime Minister Dr Man Mohan Singh at Washington on 18th July,2005 is the blue print of the Current Agricultural Transition Policy. The replacement of Congress led Government of Dr Man Mohan Singh by Narendra Modi, has least effect on this strategic vision or mission of AKI. The three recently passed Agricultural Acts are in reality continuation of Congress policies. However, Mr Rahul Gandhi has declared (Times of India, 8/10/2020) that he will scrap these agricultural laws if elected to office at centre. He has accused the Modi government at the centre of colluding with corporate groups and working against the interests of farmers. He has started a three day tractor march, and rightly pointed out that, "Modi government is bent on stopping MSP, closing food procurement system, and putting down mandis as per the wishes of billionaire corporates." Ironically Mr Sanjay Jha, a former spokesperson of Congress has reminded him, that he is actually dumping of Dr Man Mohan Singh's legacy, and need to be more tactful! May be, Mr Gandhi, the failed crown prince, is playing with the gallery because elections matter.

Unfortunately, ongoing "developmental programme" in India is driven, not primarily by industrialisation or manufacturing, but by the dismantling of small and medium land-holding family farms and corporatisation of food, agriculture and retail markets. These policies are repeatedly articulated as national priority or modernisation. A major aim of this "modernisation" is to reduce the number of the population who derive their employment or livelihood from agricultural sector. Another associated goal is to increase trade in food and agriculture, which can ultimately turn India into a global procurement hub for agricultural products. A casual look into any urban market indicates in which direction winds are blowing. One will see broccoli, sweet corn, baby corn, varieties of capsicum, juchini, acorn, kewi, dragon fruit, honey-melon etc ; replacing India's traditional vegetable and fruit basket. Price differences between local and export quality items are astonishing! In other words, food security will be gradually interpreted as in terms of availability of food in the market, irrespective of cost or price tag.

When corporate rules agriculture, these changes are inevitable. They convert agriculture into Agribusiness. The sole focus, of this agribusiness is corporate profit maximisation. This profit is extracted from various input and outputs sectors, and from huge government subsidies. Government of India has now started transferring management and control of food and agriculture to private companies, namely Ambani, Adani, Walmart, Amazon et al. They use Big-data, Artificial Intelligence (AI), and stock market linked highly integrated operations. This system thrives upon long distance food trade. Gradually and irreversibly the system sets free from of all external and societal control. This strategy creates over-production at the cost of natural resources. It is pegged with high and precision technologies, such as genetically modified seeds and agricultural biotechnology. Agribusiness always emphasise high-technology, promotion of processing and packaging of foods, commoditisation, and horizontal-vertical commercial linkages of the entire food supply chain and global food trade.

These policies are not futuristic prediction. Bit by bit, these are being implemented, in a phased manner in India. Various State governments, and entire administration (IAS officers) are happily involved. The net and direct result of this overhaul is a silent permanent catastrophe in India's disorganised rural economy. This catastrophe is unique in the world history in terms of devastation and misery. Its hallmarks are farmer's suicide and migration. The COVID-19 pandemic inadvertently revealed the tips of this vast internal rural displacement. Farm Bill 2020, cleared by the upper and lower houses of the parliament and signed by the President, is a bunch three agricultural legislations which aim to further strengthen and legitimise above mentioned agendas.

The COVID-19 pandemic has given the present government a big opportunity to accelerate the so- called agricultural reform. As pilot experiment, three ordinances were promulgated as precursor of the three bills. The closure of the market and prohibition in political agitation created a favourable climate during pandemic. During unlocking phase, parliament opened for PM Modi to just fast track these agricultural bills. But, this has acted as the proverbial spark in the hidden explosive situation in the countryside. A nationwide protest and demonstration by various farmers' organisations and political parties started almost spontaneously. It has also created a rift between Akali Dal and BJP in the central government.

Laws, Countering Laws
Three Bills, collectively referred as Farm Bill 2020 were: 1) Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, 2) Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020, 3). The Essential Commodities (Amendment) Bill 2020. After driven through both houses of the parliament, bypassing deliberation or scrutiny, these bills were duly signed by the President. These are now Union Acts. All three laws are basically being enacted to counter prevailing laws, which were enacted to save farmers from the greedy food traders and consumers from hoarders and other market forces. The first law removes the power of regulated market and APMC (Agricultural Produce Market Committee ) control. The second one promotes and formalise contract farming, and third one ensure pure free trade practices.

Agricultural markets in India are not new. The urbanisation in India always expanded through mandi. These are important link between rural and urban economy, and are decentralised and differentiated. Often, lack of grading is pointed out as a major inefficiency of wholesale or regulated markets in India. But, this is half-truth. The grading and processing of vegetables, fruits and fish are generally done at the terminal or local markets in India, which is more economical and service oriented. These mandis are not supermarket or packaging oriented, because serving them was not their aim.

Market Regulatory rules too are not new in India. These regulations were formally introduced during the British era. In 1937, Agricultural Produce (Grading and Marketing) Act was enacted to facilitate procurement and export of food from India during 2nd World War. However, even then there was a dichotomy. The declared aim of the regulation was to save farmer producers from unnecessary and exorbitant market fees and middlemen. In practice, they ensured food supply to the Army, Railwaymen and other essential servicemen, and rich citizens. The poor citizens were killed by millions in famine. A similar hoax now be playing, while withdrawing APMC provisions.

Farmers in India, from their long experience, are aware of market and regulatory needs. They are naturally integrated with markets. But, there are problems too. The main and perennial problem of mandis are weighing, unauthorised deduction and market charges. The nexus of market with input dealers and money lenders deprives farmers from their normal earnings. All this takes place usually under the patronage of local politicians. As, agricultural production and marketed surplus increased, markets assumed more importance. But, problems remained. Green revolution in grain, and then white, blue, golden and many other revolutions, collectively known as the rainbow revolution increased importance of regulated markets substantially. As agriculture is a state subject in India, states enacted more formalised Agricultural Produce (Markets) Acts in this era. The market area-jurisdiction and produce or commodities to be covered in such markets were fixed or adjusted taking local conditions in consideration. Marketing committees consist of elected representatives of growers, traders, merchants, panchayet or local bodies and state government nominees. The market committees had the power to frame bye-laws, decide local market price based on open auction at the market, decide market charges, licence functionaries, settle disputes, supervise weighing etc. Dismantling this system will create more problems for farmers, compared to freedom. As, the rights of the farmers in unregulated or private mandi also depends on the rules set up by the APMC markets.

New law also means, that states will lose a large share of 'commissions' and 'mandi fees' they now collect from the farmers. That is one major reason, agricultural states like Punjab, Haryana, even West Bengal are highly agitated over this issue. But, farmers fear something else. They were selling a large portion of their produce outside APMC market, and getting better price or convenience due to the existence of APMC rule. When those rules will be relaxed, price small farmers will get from outside APMC, they fear, will fall.

The legislation on contract farming will allow farmers to enter into a contract with agri-business firms or large retailers on pre-agreed prices of their produce. The present act promises to provide both parties some protection. Farmers fear, although, it claims farmers protection, it will actually protect the contract–whether it is favourable or detrimental to the farmers. This act is a misnomer in that sense.

The third or the "Essential Commodities (Amendment) Bill, 2020", seeks to remove commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. This will end the imposition of stock-holding limits of this items except under extraordinary circumstances. It makes illegal acts of hoarding and profiteering by hoarding legal. Government intervention under hunger and artificial famine like situation is retained, only when emergency situation arises. But, govt will be blind to these same vices in normal time. Hence, steady price rise extended over few years might bypass these guard-walls and allow the food corporate to hike the prices ab infinitum.

Contract Farming
Corporate ruled food and agricultural regime absolutely depends on contract farming. The second board meeting of AKI focussed on this key issue and talked about, "drawing on the US experience on contract farming". Corporate media, as well as the Ministers, both at centre and state, constantly mention contract farming to be the panacea that can cure farmers' distress, including farmers' suicides. AKI talked about "training", farmers on growing crops under contractual agreement. That training is being conducted at regular interval in Both US and India in the form of workshop, seminar, visits. Even lawyers and IAS bureaucrats are taking training to frame legal mechanisms of contracts and adopting the US system to Indian conditions. Contract farming is a necessary precondition to introduce GM agriculture. These laws in US have been framed by the corporate food giants to harvest maximum profit for Agribusiness, and farmers in US are also agitated over these issues.

Contract farming refers to a system for the production and supply of agricultural or horticultural products under forward contracts between producer/supplier and buyers. The farmer becomes committed to provide an agricultural commodity of a certain type, at a time and a price, in the quantity required by a known and committed buyer. In practice, contracting corporation provides inputs, technical knowledge and various other forms of support to the producer, whose main responsibility is the provision of land and labour. The supermarkets procure their supply mostly from contract farming. Purchases are guaranteed only upon meeting standard, specified in contract. Exclusive contract forbids sale of the product to other entities, and they frequently use, unwritten clauses.

But still contracts are sometimes popular. They ensure stable price, and protect farmers from price crash, provided all conditions are fulfilled. Another reason behind growing popularity of contract farming is access to technical and physical inputs. Contract faming might protects farmers from knowledge asymmetry now prevailing. Farmers, after repeated loss, don't want to take the risk-full task of decision making–i.e., which crops are when in demand.

Contract farming invites long term and hidden risks. Corporations rule each and every aspects of production. They look for their own maximum profit. They impose high quality standard, for which producers had to make additional investment. Non-purchase of crops on quality ground becomes a major burden on farmers. And, only rich can sustain contract terms. Capital and input requirements are high even in contract organic farming. The other common stress of contract farming relates to delayed payment. They don't pay at the time of purchase, but after a month or more. This delay is systematic in case of supermarkets.

The contract farming affects different classes of farmers differently. Educated capitalist farmers, with irrigation facility, large landholding, and who employ contract or wage labour gets most benefit. Large and medium landholders get less, and small and marginal land holders simply get eliminated.

Government of India launched several portals for facilitating Agribusiness (www.agriexchange. adepa.; recently. According to one such portal, the biggest obstacle in increasing farmers' income in India is the profiteering middlemen. This is a common or widely held idea. Such blanket accusations appear regularly in Newspapers and other media. Question is, who are these middlemen?

At present, middlemen are truly, many. Commission agents, traders wholesalers are of one kind. Money lender, cold house operators, and even political extortionists are others. They take a major chunk of profit from farmers' produce. This leaves very little for the farmers. Often the price farmer gets are not even 15 or 20% of what is paid by the consumer.

A simple proven remedy for middleman-mayhem can be farmers' market. Although farmers' market model, mentioned as Farm to fork model in the west, is becoming popular in European and other countries, they are not getting necessary patronage. Some self help groups and NGOs in India are trying this model, with organic farmers.

But, most powerful middlemen, who are mostly invisible and, once allowed becomes invincible are now emerging in the market. The new Agricultural Acts are welcoming these global agribusiness middlemen. The global food crisis in 2007/2008, and almost all cases of mass starvation and famine in this planet in past 50 years or so are caused by these agribusiness corporations. These middlemen increase their profit during any natural, financial, or political crisis. The International Assessment of Agricultural Knowledge, Science and Technology for Development" (IAASTD) explained that during 2007 great depression, inflation of food price was due to these culprits, who were "the largest actors... have predominant influence over the production, processing and marketing of food". The IAASTD report further argues that this has disconnected farmers from consumers and ensured that most profits are "captured by industries after the farm gate, not by farmers". Compared to these giant middlemen, the commission agents in India are tiny.

Resistance and Change
The consequences of corporate takeover of India's food and agriculture will be grave. It is disturbing mostly for farmers at present, but it concerns all. For India to be empowered, the two fundamental requirements are; better management of resources and greater freedom to farmers. Unfortunately, under a highly corrupt governance, India is moving in the opposite orientation. In truth, policies are formulated not according to needs, but, under the external influence. For more than 30 years, the IMF and the World Bank are pressurising India and other agricultural countries to dismantle all forms of protection for their local farmers and to open up their markets to global agribusiness, speculators. This, devastates their economy, and they are transformed from being exporters of food into importer of staple food grains. That is the ultimate aim of this corporate food regime. Dignity once associated with being a farmer is being lost to despair. Around one farmer is committing suicide almost every 45 minute. About a hundred farmers are quiting farming every hour.

The issues mentioned are so vital, they need to be addressed as fundamental national issue, not just electoral issue. Unfortunately, such commitment is missing. One should ask policy makers, why agriculture, farmer, and the rural economy should be considered as a burden for economic development and not as its engine? The Farm bill 2020 gives freedom for the agribusiness corporation to rule India using free market, driving out small land holding farmers en masse, in the model of US economy. The nickname Farm Bill itself is a signal to lure US agricultural corporations. Farm Bills are 5 year contracts given by the US and European Union governments, to the agribusiness corporations. These companies get support or subsidies. This is the first time, same nomenclature is being used in India.

If people allow this new food regime, the entire nation will sooner or later will become a plantation home for some billionaires and rest of the Indians will be a contracting mass of contract or slave labourers.


Vol. 53, No. 22-25, Nov 29 - Dec 26, 2020