Will incomes improve? Agri Bills see mixed response from farmers

Thousands of farmers protest against the Bills in Punjab and Haryana

Amid the turmoil over the three agriculture-related Bills, recently passed by Parliament, Sushil Hanote, 27, a farmer from Mali Silpati village in Betul district of Madhya Pradesh, is busy tending to his paddy and maize crops grown in around 4 acres.
 
Not much aware of the nuances in the three pieces of legislation, which have promised to transform his life, Sushil, categorised as a small and marginal farmer in government records, says he prefers selling to someone who picks up the produce at his farm and pays a good price.
 
Several times in the nearby Betul mandi, the trader deducted mandi taxes and that lessened his income.
 
“The nearest Betul mandi is almost 35 km from my village and if someone picks up the maize and paddy at my farm and pays a good price, why wouldn’t I want it,” Hanote said, on the phone, from Betul, accepting that his knowledge about the legislation was based on the limited interaction that he had with friends and acquaintances.
 
Amit Dwivedi, chief executive officer of Maa Machna Crop Producer Company, a farmer-producer organisation (FPO), working in same district, feels the legislation has created lot of apprehension and fear among farmers about the role of mandis.
 
“In the mandi today there is at least some documentation as to who has bought, at what price, and when he will make the payment, but if this mandi withers away, any small-time trader can fleece the farmers because there won’t be any checks and balances,” Dwivedi said.
 
Named after a local river that flows through the region (Maa Machna), Dwivedi said to date mandis acted as the reference point for price discovery even if the produce was purchased directly from farmers. If traders start buying from outside to save on their costs, who will regulate them, he asked.

 
Though the newly passed Bills do protect the structure of mandis and empower state governments to levy taxes within them, open new ones, and expand the operations of the existing ones, some farmers feel that once out-of-mandi transactions start happening, things might go off the hinge.
 
For Vinod Sinam of Sonee village in Mandsaur district (Madhya Pradesh), the experience with direct purchasing has been mixed.
 
“A few months ago in April, when mandis opened sporadically due to the lockdown, traders came to our house to buy freshly harvested garlic. Sometimes the price paid was more than what we got in mandis, while in some transactions the rate wasn’t commensurate,” Sinam said on the phone a few days ago.
 
He said if he got a price equivalent to the one decided by the mandi committee, there was no harm in selling directly to traders. Or else, mandis are the best option.
 
Clearly, as millions of farmers in Punjab, Haryana, and some other parts of India hit the road against the legislation, opinion among growers and other stakeholders about their harm and benefit is as divided as it is among economists, policymakers, and other experts.
 
The dominating question is whether they will improve their earnings or lower them.
 
Shriram Gadhave, president of the Vegetable Growers Association of India (VGAI), said while it was good that the Bills opened the door for more buyers, the government should ensure that all such transactions are recorded through the e-NaM platform.
 
“In mandis, vegetable farmers know to whom he is selling and the price he is getting, but if someone buys directly, these checks and balances might not be there,” said Gadhave.
 
Angshu Mallick, deputy chief executive officer, Adani Wilmar, which makes Fortune edible oil and other food products, says the argument that commission agents will vanish and companies will directly interact with farmers with the sole intention of cheating them if the mandi system weakens is fallacious.
 
“We have been procuring from mandis for our agri-commodities. While there is pressure on farmers to not sell outside agricultural produce marketing committees in Punjab and Haryana, we find no such resistance in Madhya Pradesh, where farmers are open to supplying directly to factories of corporate houses,” said Mallick.
 
He said many farmers in India were small and did have much to supply, so there were village-level aggregators who took the produce from farmers.
 
“That is our observation in Madhya Pradesh. These village-level aggregators are the same people supplying on behalf of farmers to mandis. My point here is that these aggregators (arthiyas) are not being kept out as it is feared in Punjab and Haryana. It is a mutually beneficial relationship for the farmer, aggregator and company,” Mallick said.
 
This is where G V Ramanjaneyulu, executive director of the Centre for Sustainable Agriculture, feels the role of FPOs will come into play.
 
“My experience of running an FPO for almost 10 years is that individual farmers cannot negotiate with companies. If they form a collective, they get a better deal, whether from private companies or government,” Ramanjaneyulu said.
 
He said the Bills alone could not solve the problems of small and marginal farmers, who constitute the biggest chunk of India’s farming community, but it should be supported by proper investment in FPOs, farmer-collectives etc, to take advantage of the free environment.
 
"So far there are 22 states that allow direct purchase outside the mandis, therefore the whole question of mandis losing relevance is misplaced," Ramanjaneyulu added.