The much talked about monsoon session of the Parliament culminated recently but not without controversies, sloganeering, and demonstrations. Apart from various other bills that saw the light of the day, the three key farm bills namely Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, and Essential Commodities (Amendment) Bill garnered maximum spotlight. Intriguingly, like all other legislations, these bills are very promising, or one may feel that they are being projected that way.
The newly introduced laws are stated to be farmer-friendly by promising to increase his income and freeing the sector from government control. However, it has caused a major commotion across the country with farmers already hitting the streets despite the pandemic. The government, on the other hand, asserts that these bills will revolutionize the agrarian sector, which collectively constitutes 60% of India’s economy and hence the growth of the sector would fundamentally impact the overall economy and vice versa.
The government has maintained that these bills will not abolish the traditional Agriculture Produce Market Committee (APMC), popularly known as the “Mandi”. The farmer will now have a choice to sell his produce directly to APMC, private players, or corporates. However, there are fears that with the envisaged privatization of the agrarian sector, the state-controlled bodies are destined to lose their existence as has been seen in the case of Indian Airlines, Air India, BSNL and so many other PSU’s.
At the same time, the adversaries to these bills have argued that this system has already failed in the state of Bihar while other so-called reforms by the regime like demonetization and GST have done more harm than good. Even in developed economies like the USA, studies show that this capitalist free market system has not worked in favour of the farmers and some level of government control is necessary to maintain the equilibrium. The main reason for the extinction of government-run players from the market has been the unbeatable marketing warfare by corporate houses. However, successive governments have failed to notice the elephant in the room, which gives these corporates the upper hand.
In order to understand the real impact of these laws on the UT of Jammu and Kashmir, one needs to dive deeper into the framework of these legislations and the agricultural structure of the UT. It deserves notice that approximately 75% of J&K’s population is associated directly or indirectly with agriculture or allied activities, 65% of the government revenue comes from agriculture activities when in fact only 30% of its area being under cultivation.
Importantly, the Jammu region mostly yields wheat, rice, maize, pulses, fodder, and oilseeds while the valley yields paddy and maize in addition to apples, almond, walnut, peach, cherry, and saffron. Broadly, J&K’s agricultural setup can be classified into two sections – one being premium, which includes apples, almond, walnut, peach, cherry, and saffron, and the other being essentials consisting wheat, rice, maize, pulses, fodder, and oilseeds.
The impact of farm bills on the premium sector is expected to be progressive as the harvest is sold at premium prices with fewer price fluctuations. The premium category harvest being region-specific and rare provides the farmers with a level playing field in negotiating with private buyers.
Private buyers can always shift the increase in purchase price under this category on the end-user without much fear of the impact on the demand. At the same time, this sector could be a pure delight for contractual farming, as the same would increase the export prospects generating greater profits for farmers and private players.
Traditionally, owners of orchards would travel to Delhi with their products and deal with the bidders through a licensed middleman at APMC. With the new system, it is now anticipated that corporates would reach the orchard owners for contractual farming or harvest purchase, thereby reducing the transportation cost and offering better purchase proposals.
On the other hand, the essentials category is destined to adverse impact, benefitting the corporates largely. Rice and Maize being a dominant crop and no mention of the MSP in the newly introduced Bills coupled with tougher competition from Punjab and Haryana would impact the sale of these crops for the farmers of J&K.
Needless to mention, the location proximity and infrastructure would make it easier for corporates to choose other states over J&K. In view of the foregoing, if the benefit of MSP is not offered to the J&K’s rice and maize farmer, the remuneration of the farmers would be drastically affected impacting the entire economic system of the region.
Another pivotal aspect for essential category farming is assessing contractual farming, which would practically make the farmer or landowner a labourer at his own field. The farmer would be working only to satisfy the contractual obligations and without him knowing the agreement would create proxy ownership of a metro city-based corporate house on his land in the valley.
The simultaneous amendment of the Essential Commodities Act will leave the farmer exploited and prone to unfair negotiations every alternative year. Removing cereals as an essential commodity practically allows the storage of cereals in any quantity and is speculated to be used by corporate houses to regulate prices by hoarding and leaving the farmers without a choice. Hence, farmers would only become more vulnerable.
Another major change that has been bought is ousting the jurisdiction of Civil Courts and resting the powers with the SDM who would appoint a committee for resolving the grievances. Hence, putting independence and neutrality of decisions under a dark cloud.
How does the future look like?
At the cost of repetition, the proposed model has been picked from the USA and European market and as per statistics a short gain followed by stagnation and depression emerged. Bihar Government also tried the model and the statistics are not convincing.
Although as far as farmers are concerned, the best available advice is the formation of better co-operative societies, seeking sound and concrete legal advice before executing contracts, and not bowing down before the corporates.
The new laws may leave a tangible demographic impact on the UT of J&K as the farmer might soon shift from Paddy and Maize farming to alternate yields prospecting better monetary compensation; so in 10 years from now while driving across the highway, you don’t find men and women in ankle-deep water weeding out rice (nendhkaran); just recall what happened 10 years back.
About the authors
The Authors Viqas Malik and Romaan Muneeb are Lawyers at the J&K High Court
and Partners at “Malik and Romaan Law offices, Srinagar”.
Viqas Malik represents clients before the Hon’ble Supreme Court, various High Courts, Special CBI Courts and Trial Courts in matters involving issues pertaining to Criminal Law, Civil Law, Media Law and Cyber Laws. He also regularly advises clients on a broad range of legal issues including those pertaining to Intellectual Property Rights
Romaan Muneeb advises on Corporate and Commercial Matters, Food laws, Labor Laws, Cyber Laws, Business and Real Estate & Property regulations plus he has worked closely with lawyers from the USA, UAE, Malta, Cyprus, & London. He has experience of handling International Arbitration before DIFC-LCIA Arbitration Centers. He has in the past established many business houses to lay their foundation in Kashmir and helped them expand their presence across the state.
The Authors can be reached at [email protected]
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