Agricultural Ordinance, 2020

Samar K Datta

The Central Government, through the Agricultural Ordinances, is showing an interest in building up a common market for agricultural commodities and building a smooth apparatus for making and exporting value-added substances through processing. Apparently it would seem to embody a very pious intention. In the attempt to introduce a uniform agricultural law throughout the country, one can discern the effort to introduce a common agricultural policy in the model of the European Union. But the countries of the EU are in many respects much more developed than India, although they vary considerably regarding the degree of development, and consequently, there are significant contradictions among them. For example, relatively developed Britain was inclined to think that she was compelled to subsidise farmers of less developed France or Spain through the EU. This attitude later grew so strongly that Britain decided to quit the EU. There is already enough divisive tendencies in the country. Hence, when the whole of the country is devastated by Covid-19, and the government is disturbed about its relations with Pakistan and China, wouldn't it have been better not to introduce a policy that is probably divisive. It must be kept in mind that farmers of India, despite undergoing many types of distress, have made India self-reliant in food. Immediately after the promulgation of the new ordinances, the farming community and the opposition have unitedly taken to the streets and some political parties have asked the state governments controlled by them to formulate reverse agricultural polices.

Despite receiving various kinds of official aid in the post-independence period, no Indian industrialist has been able to secure for India a pride of place in the world market in any industrial product. On the other hand, the Indian farmer, without receiving any comparably significant aid, has proved India's excellence in several agricultural commodities in international competition. Considered in this perspective, are those industrialists, with whose help the Modi government almost overnight effected a radical change in the agricultural marketing system in the hope of further development of agriculture and the farming community, worthy of that trust and confidence? It is a legitimate fear that they will take advantage of the soft attitude of the government towards them and will destroy the excellence of those Indian agricultural products by their incompetence, or will ruthlessly exploit poor peasants in order to hide their worthlessness. Be that as it may, if this apprehension proves correct, India will have to depend on foreign countries for foodstuffs in the near future. At present, the holdings of marginal and small farmers of India are so small that it is unlikely that their next generation will be able to take to farming or will take an interest in it. It is no wonder that many alien powers or multinational-international enterprises which want to exploit India will without delay use this opportunity.

Although the purpose of many laws is noble, they are not implemented or become impossible to implement. The main reason is that many laws or policies only lay down indifferently (or in sweet words) the outline, while the rulers and administrators prefer silence on the operational details. Consequently, while implementing the legal or policy provisions, rulers can arbitrarily twist them and by virtue of their discretionary power, remain unaccountable to anybody. The Vajpayee government had by then introduced the new agricultural policy with great fanfare. Lal Bahadur Shastri Academy invited several speakers including myself in order to hold a discussion on this policy at the India International Centre. Most of the audience consisted of elderly and senior IAS officers. When I, citing the example of European common agricultural policy, was trying to explain that in order to implement a policy in reality, it is necessary to mention well thought operational details, the audience unitedly began to obstruct me, saying that no policy declaration is preceded by mention of operational details. The chairperson was Mr Nanda, the Principal of NABARD, who knew me closely for about three to four decades. When his repeated prayers to allow me to finish my speech unhindered were continuously ignored, I got down from the Dias, saying, 'Since you are not willing to listen, I do not want to continue.' Incidentally, the next speaker was Bijay Sardana, who had been a student of mine at the Indian Institute of Management, Ahmadabad and was then occupying a high post in the FICCI. Ascending the Dias, he first said that when the policy was announced, he, while taking tea, glanced through it in order to understand if it would affect their business, and when he found that there was no good or bad news, he did not think further over the matter. But in order to place his notion, he had just taken out from internet the agricultural policy of Malayasia. With these words, he began to elaborate on Malayasia's policy with its operational details and said that if a country as small as Malayasia could invent well thought out operational details, does India have a dearth of learning and intelligence to do so? He then said that this was what his teacher Professor Datta had wanted to tell, but he was deprived of the opportunity to speak.

At the time of promulgating these ordinances, lack of comprehensive thinking on operational details has led to the jettisoning through the determination of upper ceiling of hoarding, of whatever controlling power the government had earlier. Politicians and bureaucrats once were inclined to impose control on everything in blind imitation of the Soviet model. Now they have reached the other pole, which means leaving everything to the open market, which is supposed to bring eternal bliss. That indicates their unwillingness to think of the overall welfare of the country.

If farmers are unorganised, a farmer is a small fry compared to a big trader. In such circumstances, a small or marginal farmer is bound to be defeated in the face of the power, influence and trickery of the trader in the open market. The condition of contract between two unequal parties must go in favour of the trader and against the farmer. Particularly the experience of contract farming in Africa is extremely heart-rending. That is why the ongoing demonstrations repeatedly highlight the point that if the government is really determined to abide by the Minimum Support Price norm, where lies the difficulty in mentioning it in the ordinance? Yet here it has to be kept in mind that only the mention of the MSP is not enough; the MSP has to be introduced all over the country. The experience of the near past suggests that the government does not fix MSPs for all agricultural commodities; it does so in respect of food grains only and procures them through the FCI from states like Punjab and Haryana in order to maintain the rationing system. Above all, every agricultural commodity has different varieties and there are differences in quality among them. Naturally, a trader cannot pay the same minimum price for all sorts of commodities. A big trader, again, cannot unilaterally ascertained such differences. Hence, even if the government does not want, the aid and experience of intermediaries is essential, and the latter cannot provide this service free of charge. Doesn't the government know that differences in quality can be ascertained only when the product comes to the market, not before that? Therefore, if contract farming is to be undertaken, probable prices are to be mentioned impartially beforehand according to differences in quality, and there must be a clear mention of the role of intermediaries and their legitimate dues. Past experience, however, shows that wherever contract farming has been undertaken, the contract has been oral, which is always detrimental to the interest of small farmers. Hence contracts must be made on non-judicial stamp papers and copies, signed by both parties, must be given to the farmer. Since the farmer is a small man, it is necessary to include, as a matter of caution, the panchayet chief as the third party. This writer witnessed this phenomenon in some cases of contract farming in Gujarat. If locally powerful and influential persons like the panchayet chiefs are included, both the farmer and the trader stand to gain. If the farmer violates the contract, it is easier for the traders to go to the chief than to the court, and conversely, the chief may compel the trader to abide by the contract in case the latter violates it. But it is true that sometimes, even the chief may be forced to succumb to the power, influence and cunning of the big and established trader. It can, however, be hoped that the chief may rescue a poor farmer if he falls victim to the unjust coercion by the trader. After the promulgation of the ordinances, big traders may, by virtue of such trickery, may confuse and harm the interests of farmers. For some initial periods they may offer higher than market prices and thus attract them to contract farming. But as soon as the alternatives are closed to the farmer, and the farmer will come to depend entirely on contract farming, traders will abnormally reduce the prices of farm products. Then the distress of farmers will have no end. The government reportedly wants to benefit farmers ,not to harm them by attracting big traders to agriculture .But what are the precautions taken by the government in order to forestall the adverse possibilities? There is no clue about them in the ordinances or official discussions .That is why the operational details should be added. Is there any reason to suppose that only the Indian framers of laws are intelligent and wise, while those of the European and Malayasia are stupids?

Frontier
Vol. 53, No. 27, Jan 3 - 9, 2021