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The new farm laws that the Modi government has sought to bring in will benefit farmers. I, as a farmer, welcome them and am already preparing to make use of the opportunities that will arise when the laws come into effect.

The reforms were proposed by Manmohan Singh soon after the financial and industrial reforms were instituted during the Narasimha Rao government. The Congress manifesto for the 2019 elections promised reforms in agriculture marketing by removing bottlenecks and creating a competitive environment.

The farm laws represent a change in government attitude towards farming. Our price controls and other measures such as a focus on rice and wheat go back to periods of scarcity. Since paddy and wheat are backed by governments and marketing them is relatively easier with Minimum Support Price (MSP) support and mass government procurement, farmers stick to these crops. But, today, we have surplus stocks and the era of food scarcity is over.

In any case, MSP will always be there. No government will dare to remove MSP. The only difference will be that farmers would be able to sell their produce either in the local mandi, sell it to the government procurement centers, or connect with the buyer of our choice including consumers directly or the industry.

Ravichandran Vanchinathan farmer

Ravichandran Vanchinathan

The situation in the commodity market has changed. The country spends much foreign exchange on importing pulses, palm oil ( edible oil ) and so on. There has to be a shift in focus towards such crops.

Moreover, instead of satisfying just hunger, our effort should now be towards providing nutritious food for which the focus has to shift to other crops such as legumes, oil seeds, millets, vegetables and fruits. For that to happen, empowering farmers with market access is important.

Lastly, farmers should have market mechanisms including electronic trading that would facilitate smooth trade across the country. Necessary change in the supply chain should be made so that any farmer anywhere in India should be able to market his/her product, to the buyer of his/her choice anywhere in India. Today, middlemen dominate and take away a hefty share. It is the middlemen who are fueling the present agitations by spreading unnecessary fears and apprehensions in the minds of the farmers and by falsification and misrepresentation of facts.

Empowering farmers
When I and a group of farmers in Tiruvarur linked up to aggregate our cotton crop produce and sell to a mill, the mill owners said that while they would be willing to provide the market price for what we wanted to sell, they would prefer to go through middlemen. The mill owners argued that what I and my friends would provide can only supply a few shifts and for the rest of production, they would have to buy from middlemen.

We need facilitating mechanisms so that farmers can aggregate their produce and sell to any market in the country. Aggregation is key the competitiveness of farmers as the majority of our farmers are small and marginal.

Our weakness is that we don’t have bargaining strength to deal with the buyers because we produce small quantities. It is time for our farmers to get together, aggregate their produce and sell as a collective unit. This is how the advantage of collective must be leveraged. I am planning to form a Farmer Producer Organization, which many people have already started, and bring likeminded farmers under an umbrella.

Caps on stocking so-called essential commodities are meaningless. Competition including from corporate would help intermediaries to share more of their profits with farmers. Let our farmers decide to whom they should sell their produce.

In Tamil Nadu, monopoly procurement is no more in practice. Farmers here are free to sell our produce anywhere. A cess was levied in the Regulated Market Committee. This has been discontinued.

That is why there is very little resistance against the Farm Bills in the state except a few politically motivated murmurs.

Electronic trading would enable our farmers to connect to the right kind of buyers. The problem is this concept is new to our farmers. We have been depending on middlemen for generations. Taking charge of marketing needs a lot of persuasion, motivation and determination. The agriculture department and NGOs like MS Swaminathan Research Foundation, National Agro Foundation and Krishi Vigyan Kendras (KVK) must educate farmers.

Farm laws talk about farmers being empowered to have contracts including with corporate. For this, farmers should know the price he would be getting before he signs the contract. From the date of sowing until the produce is sold, one can expect multiple price disturbance factors. Production elsewhere in India, global trends, demand for the endproduct of the industry at the national and global level, unforeseen circumstances affecting the yield such as pest, disease, climate variables and so on. The import-export policy of the government and how it changes play a significant role, too. We farmers lack the ability to foresee such price disturbance factors. This is where a reliable external support system is needed. We should decide whether to grow a particular crop, what variety and when to sow? Someone needs to provide such information.

We need to know the authenticity and reliability of the various consuming industries and corporates. CRISIL like rating is needed to give us information on all industries and processors that consume our produce.

In the trading regime that the laws would establish, disputes could arise due to several factors.

If there is increase in price, the farmer may not honour his supply commitments. If there is a fall in price the farmers may fear whether the buyer would honour his procurement commitment. For this purpose, accurate market price behaviour during the contractual period must be made available well in advance. Suitable mathematical models should be evolved by say Indian Institute of Statistics or IIMs or ICWA Institute. Plus or minus 5% is tolerable.

The buyer would like to know whether the produce would conform to the quality norms. For this purpose, an external quality control agency must certify the adherence of quality norms.

The buyer would like to know whether the produce would conform to the quality norms. For this purpose, an external quality control agency must certify the adherence of quality norms.

The seller would like to know whether he would get his payment on time: whether the payment would be made at the time of despatch from the farm gate or at the time of delivery. This should be mentioned in the contract. An escrow system of payment or bank guarantee could be made available.

Who is accountable for the delay in supply, loss during transit and so on should be clearly defined in the contract. Transit insurance must be made mandatory.

In my region I would like to promote pulse in big manner. India imports enormous quantities of pulse. During Pongal we would like to form a Farmer Producer Organization for pulse. We propose to make value addition and sell it directly to the households in our area to start with. Quality and fair price are our watchword.  We farmers can do it as we will be bypassing the middlemen and connect with the consumers directly.

 

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