Why farm laws are enacted?

Context: A minuscule minority of farmers is protesting against the farm laws. They don’t want an end to the system that has benefited them.

Background

• The creation of the Agricultural Produce Marketing Committee (APMC) came into existence almost 150 years ago to feed the colonial master’s raw cotton for their Manchester mills.
• The farmers were forced to sell to the masters in a regulated market whose regulation was set by, the colonial masters.
• The corrosive monopoly power held by the APMCs has been recognised by almost all political parties and farmer unions. For example, the Bharat Kisan Union took out a protest in 2008 arguing for the right of farmers to sell produce to corporates.
• Till now, Farmers are forced to sell their marketable produce only through a mandi regulated by the government.
• However, the new Farm bills allows the farmer to sell through the APMC, and to sell outside the APMC.

Why the protest for farm bills is skeptical?

• Only Fraction of Farmers rely on APMC: The government procures all of its food through APMCs but only about 6 per cent of the farmers in India sell through the APMCs to the government.
• Serves the Interest of few states only: Those 6 per cent are all large farmers, primarily residing in the two states of Punjab and Haryana. These two states typically account for close to 60 per cent of wheat procurement and close to a third of rice procurement.
• Leakages in distribution: The government procures from farmers in order to re-distribute the food via ration shops to the bottom two-thirds of the population. But there are leakages. For example, former Prime Minister Rajiv Gandhi in 1985 stated that only 15 per cent of the food procured by the government reached the poor.

Why Farm Bills are needed?

• Neither APMC, nor subsidies, has resulted in higher output growth in Punjab-Haryana, the pioneers of the Green Revolution.
• Subsidised electricity to farmers has destroyed the water table, the extensive use of fertiliser has destroyed the environment.
• None of the Developing and Developed countries prohibit an individual farmer from selling their produce in the market.
• It does not serve the Interest of very small and small farmers in India.
• Unlike the Industries which are freed from regulation agriculture was not freed or thereafter, until now.