In an interview with journalist Jyoti Malhotra at the Print, Professor Ashok Gulati, a well-known agricultural economist, busted the myths surrounding the farm laws that are being opposed by ‘farmers’ who are demanding the government to repeal them.
Professor Gulati said pointed out that there has been a commuication gap between the government and the farmers regarding the laws. “Well it’s unfortunate to see that there is so much of opposition to these farm laws. My take on this is that they have not been communicated properly to the farmers”, he said.
The professor who is an Infosys chair on agriculture at the Indian Council for Research on International Economic Relations (ICRIER) said that the communication gap has been fully exploited by some political parties and activists to create a fear psychosis among the farmers. Professor Gulati highlighted that the process of marketing reforms in agriculture began in 2003 under Vajpayi government when a model law was sent to state governments in order to contemplate on liberalising agriculture marketing.
System worked better with direct buying and selling
He said that during the lockdown when the APMC Act was withdrawn, the government saw the possibility of doing away with mandatory sale of agricultural produce in mandis as the supply chains remained unaffected even after withdrawal of the Act. The APMC Act was withdrawn to avoid crowding of farmers in mandis. Direct sale and purchase of agricultural produce helped the agrarian sector sustain during the lockdown period.
“Only sector that has not suffered during the Covid period despite the severest lockdown is agriculture. That is from where they (government) found that if they allowed direct buying and all that and proper supply lines are built then the system will function much better rather than this mandi system”, explained Professor Gulati.
Contrary to the opposition theory that Parliament has hurried the farm laws, Professor Gulati said that enough discussion has taken place on farm laws for 17 years. He pointed out that even the 1991 reforms were not properly discussed and the industry kept opposing them for a long time. However, he acknowledged that the opposition had a right to question if they felt that the bills were not discussed enough.
Only 6 per cent farmers gained from the MSP
On the question that the small farmer might get exploited by private buyers under the new laws, Professor Gulati claimed that more the 90 per cent of the farmers sell their produce to private buyers. “Only six percent of the farmers have gained from the MSP even when MSP has existed since 1965”, he said quoting the Shanta Kumar panel report and the NSSO 70th round situation assessment survey.
Punjab farmers biggest beneficiaries of government subsidies
Debunking the narrative that farmers from across the were protesting against the farm laws, Professor Gulati stated some figures and said that out of total 146 million farmers households in the country, Punjab has only 1.09 million farmer households. He said that the farmers from Punjab were the biggest beneficiaries of the MSP.
Busting the misconception that Punjab farmers, who are the ones mainly opposing the farm laws, were the biggest contributors to the buffer stock, he said that Punjab farmers contributed less than one third during the last wheat season. He said that Madhya Pradesh was the top contributor to the common pool in wheat category. “But whatever the Punjab farmer brings in the mandi, you know market arrival, of that almost 95 per cent is bought by the government. Nowhere else this happens”, said Professor Gulati.
Those protesting not farmers but those who will lose under the new laws
Professor Gulati said that MSP was just a notional price, an indicative price and not a legal price. And it has been so since it was introduced. He explained that under the MSP system only the government is mandated to buy at the MSP whatever quantity it purchases and private buyers could not be forced to buy at MSP.
He said that those protesting against the farm laws were not the farmers but actually those who would lose under the new laws. “Who are the losers? Not the farmers”, he said. Regarding the demand of some states about the MSP, Professor said that the if the states have a problem with the central laws, they can make their own decision with respect to MSP and see for themselves how long the system will work.
Speaking on contract farming, Professor Gulati elaborated that there are three main models in it viz. the MNCs, the Co-operatives and the domestic private sector. Explaining why there was a need for private participation in procurement process, he gave the example of milk and poultry sectors which are flourishing with private buyers.
He said that during the period from 1965 till 1990s wheat and rice formed the staple food but with rising income, dietary habits have changed with more nutritional food items like milk products, vegetables and fruits being added to the plate. Thus there is a need of diversification in the agriculture sector. “Punjab is 20 years behind a diversification, at least”, claimed Professor Gulati.
He said that the Punjab Chief Minister Captain Amarinder Singh told him that he had said on 1985 that Punjab must diversify from wheat and rice to high value agriculture. Professor Gulati highlighted the flaws that exist in policy-making in the country that focused less on productivity and more on votes. He said that the agricultural reforms envisaged under the farm laws are in the interest of the country.