In my opinion, the last meaningful reform in Indian Agriculture was signing off on BT Cotton seeds in 2002. Not that either the Centre or any State governments at that point were very sagacious – they were arm twisted into it and tried their best to make a virtue of the whole thing. The real harbinger of change was a Gujarat based seed company called Navbharat Seeds, which had smuggled in GM seeds and began selling it in 2001 Kharif season as Navbharat 151. When bollworm pest began to take over fields that season, only NB 151 fields stood strong, leading Monsanto to check and point out that the fields were under pirated BT Cotton. The “Pirate”, D B Desai went to jail but the farmers of Gujarat, forced the governments to make available the seeds, via Mahyaco ( the Monsanto Subsidiary in India). The Woke People were calmed with the non-edible nature of cotton and soon majority of the cotton in India was BT Cotton, notwithstanding the Cottonseed Oil and Meal that most of west India consumes via blended oils and poultry feed. Read the whole saga, here https://www.motherjones.com/politics/2002/09/biotechs-black-market/
Every farmer group I have met and every scientist I have met, is pro- GM but no government since 2002 has had the nerve to stand against the vocal (but superficial) media and the “urban, educated and eco-conscious” the media caters to. If this government were truly serious about self-reliance, giving GM crops its go ahead, is the best bet. Fifteen – twenty years ago, countries like Japan and South Korea imported soymeal and maize from India for its Non-GM status, but as our domestic poultry industry took off, we had lower surpluses available and they have switched to GM meals from Brazil and the US and occasionally buy from us. In times like this, when our domestic demand is low, and hence prices low, we are still not competitive against the GM products because the yields are 3-4 times higher for those. Bangladesh okayed GM fishes and BT Brinjal over a decade ago and for years I have heard rumours of most of the river fishes in West Bengal and the eggplants they sell through the country of being products of pirated GM seeds but all governments turning a blind eye since they can’t do much about it.
The evidence of 25 years of consumption of GM produce in countries like the US is good enough for people like me on the safety of the produce. I always find a near perfect overlap between anti-vaxxers and anti-GM vocalizers, at least on social media and hence my cynicism against their arguments has only increased. Or maybe I am hard hearted enough to believe that it is okay to die at 85 when you could die at 89 without eating GM foods ( provided you live in a developed economy with excellent health facilities that only crumble under sudden viruses like they did in Feb/March 2020), rather than die at 50 because of starvation or poor nutrition. For a developing country like India , that needs its poorest citizens to eat more proteins, it is not a bad idea to either feed the hens and pigs GM Maize and Soy or develop GM versions of pulses so that they can access proteins at reasonable prices.
As recently as 2010, India only had about 20 million tons of all pulses available, including 3-3.5 million tons imported from Myanmar, Australia, US, Canada and Tanzania. That worked out to per capita availability that was half what it used to be in 1956. I had done some calculations and had said that the real demand in India was for at least 35 million T and the government planners and economists would tell me that no, if there were demand, supply would come in. And as politely as I could phrase it, I asked if they are using the same logic that Louis Vuitton uses to calculate demand, to calculate demand for an essential like pulses. When there isn’t enough available, some demand just lapses. It is not that India has not tried to increase the production of pulses in india. One of the first Task forces I know of on Oilseeds and Pulses was in 1990. And as incomes in urban areas took off, ability to pay higher prices, took off in urban areas. Milk production could increase because it was not a A or B decision for the farmer, that limited land forces on his crop choice. You can have cows/buffaloes alongside your crops. Pulses were traditionally grown in arid areas and as irrigation facilities improved, the returns on other crops improved and pulses got sidelined. It is not just because of government promotion and procurement of wheat and rice (soy and maize have taken off, without the government intervening much because of the good yields and returns, and all in the last 20 years); on of the key reasons is that pulses have lower yields, quality deteriorates with one badly timed rain and has a lower shelf life than most cereals so the trader needs to clear stocks within 18-24 months, practically. Wheat and paddy can be stored for more than 5 years, if stored properly. While people berate the policy that focused on cereals under Green Revolution, I don’t simply because it is only cereals that can keep you alive if that is all you can access for say 10 days, not proteins and fat ( notwithstanding the various diets that focus on the latter two, knowing that the client’s “cheat days” will consist of doughnuts and potato chips and cakes).
The Essential Commodities Act was essential in the early days of the democracy because the country indeed had serious shortages. The subject of scrapping it would come up every so often especially in the context of private investment in scientific storage – you cannot expect someone to build an expensive storage that does not take advantage of economies of scale. When private equity players began looking at Indian Agro Industry, the biggest problem they had was unravelling the network of companies a promoter would have, to meet the ECA requirements and business requirements – so one company would build, another would lease the space and a third would manage and so on until, no one had any clue which company owed which group company how much and why company B was writing cheques on behalf of the owner of A’s electricity bill, this month. But for years, the governments and the companies had a tacit understanding that unless there was proof of malfeasance, there would be no random raids. In 2014-15, one of the first things that happened was prices of pulses shot up to all new levels and there were raids under the Act all over and in most cases where they found excess, they found 500-1000 kg over the limit; that even they found hard to define as “hoarding” in a country that grows 23,000,000,000 kgs and imports another 3 million tons. But the idea was to “be seen doing something”. From procurement of pulses to selling them in control rate stores to issuing under PDS, the country has tried all permutations and combinations. So, for those who laud the changes, I say, it’s a waste of time. For those who fear this is regressive, it can be ensured that there won’t be hoarding and price gouging – but key to that is transparency – if it is well known how much was grown/imported and how much exported, and with plenty of competition, there would be no scope for hoarding or price gouging – provided the competition is not allowed to become a cartel.
Coming to transparency, the much reviled APMCs were started to bring in transparency, after the World Bank studied the situation at hand and suggested that there be a local body that registers all the sale by farmers to ensure a) the farmer gets his due ( before that it was not unknown that the farmer sold thinking the price was 40 and got for 14 and there were debates on what was said during the oral discussions) b) there is a record of how much a region produces of what and c) there is someone who is responsible for the farmers getting the right price and ensuring he gets the payment before the stock is lifted. It was a reform that was the need for that day. Key problem with the APMC system is that they don’t encourage competition and hence limit licenses, allowing cartelization. But it is also a fact that some of the APMCs have as a policy issued more licenses each year, and in one I visited in 2012, they had even gone and made presentations to people in “different communities” to break the stronghold of “one community” ( as told by the secretary) and were successful at it. But there is also the issue is how the farmer, trader and the office bearers collude to reduce tax payable. The quantity entering the market that is registered at the gates can be anywhere from 60% to 100% of the real quantities ( the latter in the computerized systems, usually). The tax payable on the 40% not accounted for is split between all three parties, I am told. Someone once told me of an APMC Chairman, who refused a Vidhan Sabha Ticket, because he figured he was more powerful (and had more opportunities to be rich) in this position than as a newbie MLA.
Competition amongst APMCs to attract the farmer also exists. The better run APMCs provide free meals to farmers, run dormitories for over night stay during peak seasons, have facilities for cleaning/sorting etc. and use their funds to buy more land to expand and allow for more traders to participate. For over a two decades now, the farmer has not needed to sell “only” at the APMC and direct sale to corporates has been allowed. The hindrance has always been the need for an aggregator because each farmer has too little and the corporates prefer talking to 5 people instead of 100, unsurprisingly. Which is why in the states where APMC is not intervening, the farmer is not suddenly rich. There has been more success where the farmers work jointly and grow the same variety of a crop to allow for aggregation within their group and get some muscle into their negotiations. The grapes, pomegranate and mango farmers of Maharashtra are good cases in point. They have all leveraged the export markets well and are known to be the stronger ones in their relationship with exporters.
None of these measures are perfect and none, worthless. The problem in India that things get frozen in time and all parties figure out how to play the system.
These bills don’t address some of the key issues of the sector and in fact introduce some new issues.
There is no talk of taxing agriculture – if a farmer leases his land to a corporate, can he still claim it is agricultural income? While the fanclub has been sending whatsapp messages claiming these bills end ability of Supriya Sule to claim income from agriculture, I don’t see any provision that does so.
While it does away with APMCs, it suggests a bureaucrat as an adjudicator/interlocutor; a bigger hazard than the courts, in my opinion.
They take away taxes that APMCs gave the state treasuries, and do not suggest mechanisms for the states to make good this gap and we all already know how the Centre misappropriated the states’ share of GST collected; so this is going to be a mess where the states that are the net contributors will someday likely take some serious actions that threaten the federal system.
It does not show what if any action it plans if there is a shortfall in a particular commodity, and because it will no longer have an APMC database to check approximately what was grown and sold, any shortfall will be know when it comes and hits the consumer.
While I am actually in favour of the govt buying from the market for PDS and not procuring limitlessly, I would say that instead of verbally promising to continue with Procurement and MSP, while the written implies they will withdraw, the better way for them would have been to lay a 10 year roadmap of transition, allowing farmers to adjust and rethink their practices.
Futures markets, opening and shutting access to overseas markets, export subsidies, import duties – all are currently unreliable because the govt issues directives that are sudden and ill-timed and make risk mitigation and long term planning impossible for farmers, exporters and corporates alike. Whether it is done because of vested interests or though incompetence, the result is the same. You can teach a bureaucrat how allowing imports after a farmer has sown a crop is a tax on him as he will lose money, as imports will reduce farmgate prices and reverse when you shut exports when the crop is due for harvesting or has been harvested and s/he will even understand but then when s/he is posted out, the next person will again need to be taught and in a matter of weeks, some lobby would have gotten some change done and let the farmer down.
Commodity Exchanges do barely any trade because no serious player believes the exchange will actually help him mitigate his risks – the risk of overnight policy change that terminates contracts, in fact, gets added. The bills, don’t even touch these subjects.
Ultimately, while there may not be instant disaster of the kind that demonetization and GST introduction brought in, these bills definitely don’t help the farmer in any meaningful way and frankly I don’t see how the corporates will aggregate land and start doing large scale agriculture, given the mess that landholding ownership in the country is in.
