Scrapping of farm bills to recoil on poll-bound politics, economy

Finally, the three farm bills are to be withdrawn as the nation goes to polls in UP, Punjab and three other states. Prime Minister Narendra Modi’s announcement will lead to a sea change in the gamut of a year-long struggle by the farmers.
Yes, it would now be a direct battle for votes with the farm issues and the prime minister taking the centre stage.
It is not an issue of who wins and who loses but calls for a process where none has to go for an adamant attitude that has caused over 800 deaths, innumerable conflicts and a political atmosphere that had led to strong verbosity and millions of hours of media debate.
The farmers may be happy but may wait to withdraw their agitation till the bills are formally withdrawn in Parliament.
Prime Minister lamented that despite his concern for the farmers he “We couldn’t convince a section of farmers despite best efforts. The goal of the three farm laws was to empower farmers, especially small farmers”. There is a general relief and Modi can do more by also taking this opportunity to scrap the whimsical NGT order of scrapping 10-year-old cars, tractors and othear vehicles.
The three bills in question are the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill and The Farmers’ (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 and the Essential Commodities Act amendment bill. The first is on agricultural market reforms, while the second is about contract farming provisions.
As the bills are withdrawn the intense political battle that seemingly would continue is to pitch the campaign plank for the elections. The opposition may get emboldened as also the farmers. The government would come out with the plank of a responsive government and sabka sath sabka vikas. It is not that only the Delhi borders were sealed by farmers and police of Haryana, Delhi and UP, it has also created an atmosphere of uncertainty. The Republic Day rally in January 2021 led to many apprehensions and a situation of conflict that was never envisaged.
The reverberating slogans and counter slogans may warm up the poll pitch with curious voters observing each of the movements. It would be yet another move to reestablish the brand Narendra Modi by the BJP-NDA. The opposition may try to do the contrary. Ultimately it would turn the elections into an interesting phenomenon.
Possibly it would also make any government not to act in haste as it happened with the June 5, 2020 farm ordinances, at the height of lockdown, leading to fears that corporate stranglehold to rise as MSP to be withdrawn. In reality government increased MSPs on all farm products.
Whether the Bharatiya Kisan Union make an impact in the coming polls with its possible allies SP – RLD or just wither away also needs to be seen. Since 2018 and during the past one year BKU has been in the news in the northern states and particularly UP, where all the parties have high stakes.
The bills had generated enough corporate and foreign investor interest. It increased the hope of more investment in warehousing though the farmers have the reservation of losing to corporate and finally loss of livelihood. Several rounds of talks and its failure had led to a kind of desperation as they feared that returns would continue to fall.
Farmers refused to accept government’s offer of written guarantee on minimum support price (MSP) and offer of levying cess on the new private mandis outside the APMC mandis.
Over the years, between 2013-14 and 2017-18, as farmers’ return on their produce start reducing, the foreign portfolio investment (FPI) is booming and funding for silo – giant steel structures for storing grains for a longer duration – construction increases.
Since 1967, when APMC Act was enforced, never have farmers been at such a distress and confusion. Normally, despite not being able to sell at MSPs, they were not unhappy at the returns. The MSP decided a floor price and provided the bargaining strength to them against the market forces. In 2013-14, the paddy price was 58 percent higher than average input and labour costs. This margin shrank to 41 percent in 2018. The difference on maize reduced from 43 percent to 25.6 percent.
Indian farmers have reasons to be unhappy. Their yields are low. World average for rice per kg per hectare in 2018 is 4679, maize 5924, all pulses 964, arhar 852, soybean 2791, groundnut 1611, wheat 3425, barley 2951 and gram 965. The Indian average is rice 2638, maize 3070, all pulses 757, arhar 757, soybean 1192, groundnut 1422, wheat 3371, barley 2693 and gram 956. The prices they get are less and as the cost is high, approaching international markets is not easy.
In this backdrop if it is linked to foreign portfolio investment (FPI), the trend is surprising. In June, 2020, the FPI was Rs 11,736 crore. It doubles to Rs 22,866 crore in July. The three farm laws were introduced as ordinances on June 5, 2020. In August as the farm bills were introduced for passing by Parliament, the investments jump to Rs 1,30,576 crore. About half the investments surprisingly came from two tiny countries, Mauritius and Singapore. Another large investor was not Netherland.
The State of Indian Agriculture 2015-16 (SIA15) of Ministry of Agriculture says in its preface, “in recent years the agriculture and allied sector has been facing numerous challenges. The sector remains constrained by low productivity, excessive dependence on monsoon and weather conditions, continuing fragmentation of land and preponderance of fragmented markets. A combination of these factors has led to episodes of agrarian distress which have been widely reported”.
Various other issues like toll roads, building of silos and the falling farm GDP to 14 percent may become poll issues. How it would recoil on different political parties would be interesting to watch. It might raise debate in all political parties, including the ruling combine.
The election plank interestingly may become farm issues though the BJP may like to keep it focused on Ram Mandir. In that case issues of decline in GDP in the farm sector can take the centre stage.
As it appears now farm growth and structural changes in economy would be at the centre stage but many new political issues may be added to the vexed problem impacting the 2022 election results.

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