Kisan Kranti 2020
Prices of Commodities in the market in a free economy are fixed by the interaction of the forces of demand and supply. If there is no governmental intervention prices of the articles whose supply is restricted or demand increases, tend to rise. In case of essential items, the fluctuations in market prices are very large. Since farm produce is generally perishable, their prices tend to vary in different regions. This is the position in a free economy. But the situation in the world today, particularly in the developing countries, is that the government is always alive to check unreasonable increases in the prices of farm produce on one hand and assure reasonable prices for their produce in case prices crash in the market due to overproduction in a particular year. This ensures availability of farm produce to the consumers at a reasonable price and at the same time induces farmers to produce more.
There are some special features of the price mechanism of agricultural produce. Some of the agricultural produce are highly perishable, while others are perishable over a period of time. Some of the products like sugarcane, cotton, jute, oilseeds, etc are required as raw materials for industries, while others like wheat, rice, pulses, etc are required by human beings for their existence. The prices of these commodities could be manipulated by the middleman as the farm produce are seasonal. Hoarding of food grains by unscrupulous traders can create havoc. In case of short supply people would be willing to pay very high prices. Storage of farm produce beyond the growing season also tends to increase its price.
The Government of India has been fixing the support price for farm produce every year. Government assumes the farmer would purchase all these surplus produce at a pre-fixed price, in case they are not able to sell it in the market at that or higher price. The scheme worked well till late seventies, but since the early eighties, growing demand of farmers is being echoed for higher prices of their produce. The country has been witnessing many agitations which calls for the government to intervene.
The farmers have been very explicitly demanding the revocation of all the three recent Farm Bills passed by the Lok Sabha, which came into legislation after the President’s assent on it.
The three bills, The Farmer’s Produce Trade and Commerce (Promotion and Facilitation) Bill, 202, the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 and the Essential Commodities (Amendment) Bill 2020 have been advocated to be in queue for a long time, by the Government.
The Bills promote a more flexible system within a free market, allowing the farmers to sell their produces beyond the physical space of the mandis. This would enhance their channels of marketing as well. Although the system has not been totally overhauled, since only a parallel system of working is being proposed within the existing system. Previously, farmers could sell their produce only through the e-NAM system. In order to help the agriculture sector to thrive and be resilient eventually, the Bill has ensured that both the farmer or the producer are given equal priority, and the farmer gets the stipulated price for their crops.
The farmer’s agitation is not baseless. Agriculture is now an industry. A lot of capital is needed for scientific agriculture. They are not getting adequate return from agriculture. The prices of agricultural inputs have shot up. The price of chemical fertilisers and diesel have gone up several times. Thus the cost of production has gone up considerably, while proportionate increase in the prices of farm produce has not come up.
Agriculture is at risk by the introduction of large scale commercial farming. Though the farm produce is now less subject to vicissitudes of nature and rainfall, it has become more precarious in relation to demand and price which are generally determined by the urban population. The farmers feel that they are the neglected lot. On the one hand they pay higher prices for agricultural inputs and the finished goods that they purchase for their consumption, while on the other their produce is sold cheaper.
It is a fact that the rise in prices of farm produce has not been in accordance with the general rise in price level in the country, but there are other factors, which cannot be ignored. In order to maintain a reasonable level of prices of essential commodities, it is necessary for the Government to see that there is no abnormal increase.
It is the responsibility of the Government to ensure supplies of farm produce to the consumer at reasonable prices and at the same time assume farmers supply inputs at a fixed price.
Instead of an increase in prices of farm produce, subsidy on inputs may be more desirable. The agitation of farmers has been termed by the Government as politically motivated but it cannot be either dismissed or mistaken for a peasant revolt. What is desired is that the government keeps a close look at the farm policies with the clear intentions of doing justice to the farmers as well as the common man. A probable solution could be inclusion of statutory backing to Minimum Support Prices and proactive procurement in the new bill to eradicate the fear of farmers. Empowering the farmers with the freedom to choose who they sell their produce to and where, is also dependent on various other infrastructural developments as well. The leaders of agitators are to be persuaded by the Government to abandon the path of agitation and sit across the table to finally decide the issue in the best national interest.