Farmer Reform Bill 2020: Do Punjab and Haryana mandis have the highest duty?
While the Central Government has been stating the new agricultural laws for the benefit of the farmers, the farmers have been adamant on the demand to withdraw them. Punjab and Haryana have the largest number of farmers protesting on the borders of Delhi, where the total duty of mandis is highest. NITI Aayog member Ramesh Chand has told in a recent report that how the new laws will help improve the condition of farmers. Through these farmers, the competition in the market will increase. The benefit of market competition will be for the farmers only. It is also evident that it is just the assumption because high competition can also create more people leaving farming indirectly, which may increase unemployment.
Market fees and commissions
There are APMCs in 25 states of the country. The commission is not charged on notified crops in the mandi committees of 12 states. Out of these, the service fee is 0-1 percent. In Madhya Pradesh and Tripura, it becomes two percent. The commission is charged 1-2% in five states. The total fee in Karnataka is 3.5 percent. Two percent or less market fee may be fixed in the interest of the market committee. The total fee in seven states is 5-8 percent. Punjab and Haryana have the highest total charges. One has to think that Punjab and Haryana both have the highest GDP in farming.
Changes in contract farming
There is no need to be in a dilemma about contract farming and corporate farming. Corporate farming interferes with companies in production activities. In contract farming, no provision has been made to give land on lease to sponsors or companies. No recovery will continue relative to agricultural land. Companies like Nestle and Tata are already partnering with farmers. But the number of these such farmers is very less. So it will only help a very less number of farmers. Anyhow it will increase farmer jobs but daily wages on it will be less.
Limitations of the APMC system
Farmers cannot sell notified crops outside APMC mandis. There are several levels of fees for the purchase and sale of crops. Farmers cannot sell the product directly to the trader even if they are prepared to pay all kinds of fees. Revenue is received from commission and cess.
States can also wear MSP as legal, Maharashtra has done this work: Modi government has included many more crops under the purview of MSP. The Center and the state encourage farmers to produce pulses. The government has been buying food grains for seven percent of the total production. If there is a way to give legal support to the MSP, ie the MSP, then the states can do it easily. But, if there is no balance between demand and price, then it is sure to fail. In the year 2018, the Maharashtra government made a provision for jail and a fine for violation of MSP.
The buyers retreated when the market price of crops decreased and the farmers lost it. Talking of sugarcane producing states, sugar mills cease crushing if the market is not favorable, due to which a situation of the legal dispute arises. A limited fee or commission will encourage private sector buyers to purchase on MSP, providing an alternative to farmers. In states like Bihar and Kerala, paddy is procured on MSP without APMC. Off-MSP, there has been a growth of 4-10 percent in the business of flowers, fish, and milk, while grain has increased by only 1.1 percent since 2011. Private sector participation in the total investment in agriculture is just two percent, which needs to be increased as soon as possible.
Changes in the rules
In 2003, the United Progressive Alliance (UPA) government of the Center called for the exclusion of fruits and vegetables from the APMC. This was followed by 16 states. After 2014, the National Democratic Alliance (NDA) government formulated a model act, which was implemented only by Arunachal Pradesh. Thus the APMC reform remained partially effective for 18 years. After this, the Narendra Modi government of the Center brought three new laws. The initiative to reform the Essential Commodities Act took place in 2002, which is still partial.