Qrious Project: How outcome of Bihar’s APMC repeal, solidifies concerns of farmer’s against farm bills?

Recently, New Delhi witnessed a march by Indian Farmers in order to protest against the 3 new farms bills i.e., which are Farmers’ (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bills, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill and the Essential Commodities (Amendment) Bill. These bills look to break the monopoly of middlemen in APMCs and create a free market to allow farmers to sell outside APMC mandis in India.

Whether the concerns of farmers carry enough weight or not can be assessed through the Outcomes of Bihar’s APMC act abolishment which was almost a similar attempt to provide a free market for agricultural produce.

What are the Concerns raised by Farmers against the Farm bills?

Critics have raised their concerns against all 3 farm laws, for example; Essential commodities (amendment) act removes major commodities from the essential list, in effect, allowing their hoarding. However Major cause of concern for the farmers is related to the FPTC bill that might result in the closure of Mandis and the discontinuation of the MSP system due to that. Thereby leaving farmers at the mercy of big corporates.

What is Agricultural Produce Market Committee (APMC)?

An Agricultural Produce Market Committee (APMC) is a statutory market committee constituted by a State Government to facilitate the trade in certain notified agricultural or horticultural or livestock products. APMCs are responsible to ensure transparency in the pricing system, payment for agricultural produce to farmers.

APMCs are regulated by states through their adoption of the Agriculture Produce Marketing Committee (APMC) Act.

Bihar Government repealed the Agriculture Produce Marketing Committee (APMC) Act in 2006 in a few months after assuming power in 2005. It shut down the mandi (wholesale markets for agricultural produce) system in 2006.

Outcomes of Bihar’s APMC act abolishment?

The outcomes of the Bihar APMC act have been a mixed bag of results. However, critics have pointed out major negative impacts on the lives of Bihar farmers but it didn’t materialize in any big protest due to a lack of awareness and unity among the farmers, as per the experts;

1. First, before the scrapping of the APMC Act, farmers would sell their produce to the market committees where the minimum price was guaranteed. But, scrapping of the system led to distress sell by the farmers due to lack of a storage facility.
   • Paddy is being sold at Rs. 900-1,000 a quintal in Bihar, almost half the Rs 1,868 fixed by the Centre as MSP. 50% of the farmers aren’t even able to recover their investments.
2. Second, about 97 percent of the state’s agricultural community comprises either marginal or small farmers who are not left with much surplus to sell in the market decreasing their bargaining capacity.
3. Third, farming has turned out to be a non-viable profession in Bihar over time as many farmers from Bihar are now been are now working as laborers in Punjab and Haryana.
4. Fourth, Traders can any time refuse to buy paddy from farmers if they are not of the desired quality. For example; the Primary Agricultural Credit Society (PACS) in Bihar Often refuses to accept paddy citing moisture. Moreover, PACS makes late payments at a gap of months after receipt of paddy. In the absence of proper storage facilities, it forces farmers to sell their produce to local traders at low prices.
5. Fifth, the abolishment of APMC was done with the intention to make farming activities more market-oriented. However, it made farmers more compromising in Bihar since the average local holding size is 0.9 hectare. Farming is not entrepreneurship, but a source of livelihood.

However, not everything about this step of the Bihar government has proved to be negative. Some positive outcomes as well have been observed.

• The inefficient market system has been removed with a good intention to remove middlemen who earned money in the APMC system on the cost of farmer’s remuneration.
• In some areas, where private investment has been received, better storage infrastructure and income has been assured to farmers by the traders.
• Also, this move has helped farmers to understand that farming can be an enterprising activity rather than a livelihood providing enough support from the government to achieve it.
• Agricultural productivity has witnessed growth Between 2011-12 and 2018-19, India’s growth rate was 7.5 per cent while it was 13.3 per cent in Bihar.

Do these outcomes solidify concerns of farmer’s against farm bills?

These outcomes seem to solidify the concern of the farmers against present farm bills due to several reasons;

First, these farm bills like APMC abolishment in Bihar seems to create a free market as it allows farmers to sell outside APMC mandis in India.

Second, the bills being passed also bring back the problems of the middleman system that resulted in extra cost for the farmers. Due to lack of awareness and skills, Farmers would hire middlemen to sign digital contracts with buyers in the market which these bills provide for. Also, farmers will have to pay additional fees to lawyers to understand the terms of contracts and for any legal proceeding due to violation of contract terms by the companies.

As per the reports, instead of farmers, middlemen are making huge profits by purchasing produce and low prices and selling it at a high market price. 

Third, as the bills define the term, “farmer”, they exclude the cropper, laborer, tiller, etc. Free market system which these bills seem to promote has in the past affected these croppers, laborer, tiller most as the decrease in their remuneration from farm produce has forced them to migrate and work as labor in other states.

Thus, recent farm bills raise more concern than it addresses. It must be understood that the majority of the farmers in India are marginal, less aware, and uneducated. However, proper measures, better implementation, and enough support to the farmers may help these bills achieve the aim they want to achieve. 

Way forward

Agricultural reforms in India is the need of hour, but it should take into account the diversity of sections working in the agricultural sector. Any reform that is suitable for one section of the sector and unsuitable for another must be thought out carefully as agriculture is the backbone of our country and we became self-sufficient in it after a lot of efforts. Government should strive to make agriculture remunerative but with proper discussion with all the stakeholders. It would take a bit more time but it is worth it.