It has been over a month since the farmers have camped outside the capital city, protesting against the amendments to the three farm laws. Their main apprehension is that these laws would lead to the corporatisation of agriculture, nullified MSP and dysfunctional Mandis, and eventual pauperisation of the small cultivators.
The producers encounter countless hardships in growing crops such as input credit crunch, vagaries of monsoon, natural calamities, climate change, damages by wild animals, threats from pests and disease attacks, etc. Yet, the insurmountable hurdle is related to the product’s marketing, where they are vulnerable like prey in the open. Realising a remunerative price for the product is the trickiest part of being a producer.
In India, there are four likely scenarios for the marketing of the primary producers. First, an assured floor price (MSP), availability of markets (APMC Mandis), and prospective buyers are relevant to crops such as paddy and wheat, where the farmers manage to secure a near remunerative price for the produce.
It also explains the skewed cropping pattern in favour of these crops in Punjab and Haryana. As per the State of Indian Agriculture report, 2015-16, Punjab has the best APMC market density with one market for every 119 sq. km against the national average of 449 sq. km, where farmers can easily sell their crops at MSP.
Interestingly, the National Commission on Farmers (2004) had suggested that the density of APMCs in the country is poor, and an agricultural market should be located within a radius of 5 km from the farmer’s residence, i.e., one market for 78 sq. km. area. Even so, the government is further evading its responsibilities.
Second, an assured MSP, accessible Mandis but no buyers – for crops like pulses and oilseeds, the actual procurement at MSP is very low. NAFED data stressed that even a third of the total production of oilseeds and pulses were not procured at MSP for the Kharif season of 2018-19.
Third, no MSP, but private Mandis and buyers available – for crops like fruits and vegetables, the growers don’t even get one-fourth of the market price, with only the middlemen benefitting. For instance, at urban retail markets, onions, tomato, cabbage, and cauliflower are sold for ₹ 80-120 a kg, four times the prices that farmers receive.
It is one of the factors that have deterred farmers from diverging towards high-value crops, others being an absent MSP, poor market infrastructure, lack of cold storage facilities for perishable crops, high post-harvest losses, etc.
Fourth, a distorted MSP, absentee Mandis and middlemen, and private buyers – it is a case of Minor Forest produce (MFPs), where the producers, mainly tribals, collect items such as lac, gum, tussar, honey, kendu leaves, mahua seeds, etc. from the forests, are forced to sell the produce, in the so-called competitive open market, at throwaway prices.
The government came up with a scheme in 2013, ‘Mechanism for the marketing of Minor Forest Produce(MFP) through Minimum Support Price (MSP) and Development of Value Chain for MFP’ which assured floor price for few MFP to start with.
Even though the procurement by the government agencies was already negligible, the government, in 2016, drastically reduced the MSP for the forest produce. For instance, the central government reduced the MSP for Lac (Kusumi) from ₹ 320 to ₹ 150 per kg and Lac (Rangini) from ₹ 230 to ₹100 per kg, claiming that such demands were raised by state governments.
It has ever since increased the MSP for MFPs marginally and included some more products under the scheme. However, the scheme remains merely on paper, as there are no Mandis or market place and no government agencies for procurement.
Consequently, a section of primary producers has remained only as second class producers with no hope from the government and completely at the mercy of middlemen and private buyers who exploit them unrelentingly. Such is also the engineering of these farm laws that would reduce the farmers to pitiful conditions even worse than colonial exploitation.
The case of nationalised MFPs is worth mentioning in the present context. Some MFPs like tendu leaves are nationalised, which means the state forest department enters into a contract with the MFP owners, the tribals, to sell these products only to the forest department.
The latter has a monopoly over the procurement of such produce. The Forest Rights Act, 2006, along with the PESA (Panchayat Extension to Scheduled Areas) Act, 1996, granted ownership and governance rights to the tribals, and in principle, prohibited the nationalisation or the forest department monopoly over the marketing of the MFPs.
Consequently, these producers are treated like contract labourers working on fixed daily wages and fare no better than open trade of the non-nationalised MFPs. The open market is primarily dominated by middlemen, as big corporates would never directly procure from small producers.
A ceremonial gesture of MSP thus would remain an otiose ritual so long as the dysfunctional Mandis would render the procurement at the floor price either absent or minimal.
According to a report, “five years after the scheme, MSP for MFPs, was introduced in 2013, the utilisation statistics has remained poor. The Centre had earmarked ₹ 1,172 crores for five years till 2018-19. Ministry of Tribal Affairs’ statistics, however, revealed that only 11% of the total outlay — about ₹ 128 crore — has been spent.”
A reasonable solution should involve a pre-agreed floor price (MSP) for all kinds of the primary producers, access to regulated Mandis like market places, preferably within 5 km from the nearest habitation as recommended by the Swaminathan Committee report, and an assured procurement by the government agencies whenever the market price falls below the floor price. Above all, a remunerative price for their produce is a non-negotiable constitutional right.
The writer is a PhD scholar at JNU and a former Prime Minister’s Rural Development Fellow.