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Over Rs 70,000 crore economic loss has been caused in the December quarter, thanks to the ‘farmer’ protest: Details

According to the PHD Chamber of Commerce and Industry (PHDCCI), the huge economic loss has been caused in the December quarter due to disruptions in the supply chains particularly in the states of Punjab and Haryana and the bordering areas of the national capital.

The ongoing farmer protest against the three farm laws enacted by the government last year have reportedly cost the economy over Rs 70,000 crores. According to the PHD Chamber of Commerce and Industry (PHDCCI), the huge economic loss has been caused in the December quarter due to disruptions in the supply chains particularly in the states of Punjab and Haryana and the bordering areas of the national capital.

Sectors including food processing, cotton textiles, trading and tourism severely affected

Sanjay Aggarwal, President PHDCCI, said, “The 36 days farm agitation so far has led to more than Rs 70,000 crore economic loss in the Q3 FY 2020-2021 due to… disruption in supply chains and day-to-day economic activities particularly in the progressive states of Punjab and Haryana and border areas of National capital Delhi”.

There are reportedly around 25 lakh Micro, Small and Medium Enterprises (MSMEs) in Punjab and Haryana employing over 45 lakh workers. These MSMEs contribute to over Rs 4 lakh crore out of the total Rs 14 lakh crore Gross State Domestic Product (GSDP) of these two states.

According to Aggarwal, in the year 2019-2020, the GSDP of Punjab was estimated at Rs 5.75 lakh crore while that of Haryana was estimated at Rs 8.31 lakh crore. The sectors that bore the brunt of farmer agitation include food processing, cotton textiles, garments, automobile, farm machinery, information technology, trading, tourism, hospitality and transport. The supply of raw materials was severely impacted by the agitation. Aggarwal said that the PHDCCI looked forward to an early resolution of the issues between the protestors and the government.

The CJI had expressed concern over blockade by farmers

The farmer protests that have been going on for over a month now, have caused massive inconvenience to the public. The farmer representatives have been threatening the government with more road blockages if their demands are not met. The Chief Justice of India SA Bobde, while hearing a petition against the farmer agitation, had expressed concerned over the blockade caused by the protests. The CJI had observed that the people in the national capital would go hungry if farmers blocked the roads. He said that the purpose of the protest would be fulfilled through dialogue and not merely by sitting in protest.

After the sixth round of talks between the government and farmer representatives, the government has agreed to two out of four demands. As per one of the two accepted demands, farmers have now been excluded from the ambit of Commission for Air Quality Management in National Capital Region and Adjoining Areas Ordinance 2020 which was passed to deal with air pollution. Now, stubble burning farmers will not face action under the Ordinance. As per the second accepted demand, the electricity subsidy currently provided to farmers will continue.

The two demands where the government has so far refused to budge, and rightly so, is granting their demand for a guaranteed MSP law and the blanket withdrawal of the three farm laws that are meant to empower the farmers. It is pertinent to note that the agitating farmers are mainly ones from Punjab. Several farmers from other states have come out in support of the three farm laws.

Farmer protest: Misinformation against the farm laws and the government 

Several vested interests have been spreading misinformation regarding the farm laws. OpIndia reported about Katha Vachak Banta Singh Ji who used Gurudwara Bangla Sahib Ji to spread misinformation about the laws. From opposition leaders to Khalsa Aid’s founder Ravi Singh, and from organizations like PFI and SFJ are trying to take advantage of the situation and spread their anti-India propaganda. In fact, only a few days ago, it was revealed that the ‘farmer’ who was demanding that the laws be repealed was a Congress leader who had assets worth well over Rs 600 crores and also had several serious criminal charges against him.

What are the farm laws? 

One of the biggest factors plaguing the growth of agriculture sector in the country is the inability of the farmer to find a market and to get a fair price to his produce. To address the issue, the erstwhile governments of different states enacted the Agricultural Produce Market Regulation Acts (APMC Acts), which authorised them to set up and regulate marketing practices in wholesale markets. 

The objective of these markets was to ensure that farmers get a fair price for their produce. However, with each passing year, the APMCs turned out to be inefficient with increasing cartelisation of middlemen, ban on private players to enter the trade, increasing corruption etc. 

The Modi government recently introduced three bills to promote much easier trade for the farm produce and to provide a competitive market for the producers outside the existing APMC system. The three laws were

  1. The Farming Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020: This law aims at creating additional trading opportunities outside the APMC market yards to help farmers get remunerative prices due to additional competition
  2. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020: This law relates a framework for contract farming through an agreement between a farmer and a buyer prior to the production or rearing of any farm produce. 
  3. The Essential Commodities (Amendment) Bill, 2020: This law aims to regulate the supply of certain food items only under extraordinary circumstances.

It is pertinent to mention that the farm laws are set of three laws that allow farmers to sell their products outside APMC act (most states make it compulsory for the farmers to sell at APMC mandis). It also allows farmers to directly have a contract with corporate houses.

That farm laws don’t do away with APMC, and if someone is not willing to trust markets outside the current system, they are free to stick to the ongoing system. It doesn’t do away with MSPs either. However, the prevalent narrative that seems to be motivated by political concerns falsely claims that APMCs and MSP are being done away with. 

They also allege that due to these laws, big corporations would have the upper hand in a deal with farmers, however, that again is a lie. In fact, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 ensures that a contract is agreed upon and gives the farmer the power to even cancel contracts.

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OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

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