Daily Editorial Analysis for 6th January 2021

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  5. Daily Editorial Analysis for 6th January 2021

Shock treatment will not work in agriculture


Mains: G.S. II & III Governance, Social Justice and Issues related to agriculture


  • Almost all sections of people including farmers agree that the Agricultural Produce Market Committee (APMC)-mandi policies for agricultural marketing, initiated in the 1960s for a few crops, have outlived their utility.
  • The system needs a new policy in the face of the agricultural sector’s growth slowdown, the crop-composition not widening, and investments in land not happening.
  • Recently, the government of the day has opened up the output market with the aim to let market forces improve efficiency and create more value for farmers and the economy.
  • These laws state that farmers are now free to sell all their products anywhere and to anyone beyond the physical premises of APMC markets.
  • Additionally, the laws promote contract farming through establishing partnerships between farmers and food-processing companies, and also permit unlimited hoarding of food except in special circumstances.

Cause of concern for farmers

  • Three main suggestions were put forth by farmers: one, their produce prices should be the cost of production plus a reasonable mark-up; two, fluctuations in prices should be minimal; and three, there should be little or no interface with legal or administrative officials — they are not comfortable dealing with the “sahibs and the police.
  • All these farmer concerns have been ignored in the way the current laws are drafted.


  • The first law of the Minimum Support Price-mandi is a known devil, but the new markets will be an unknown ghost with no control over them by anyone. Thus, while “malpractices” in mandis are known and local leaders are often brought in to vent farmers’ anger or arbitrate in difficult situations, malpractices in the new systems are neither forecast-able nor is there any authority to report to.
  • There are many issues here. Traders could reduce the prices on more than one pretext, such as finding faults with the product; declining to buy on the pretext of glut (a wait and watch strategy); defaulting on payments, and so on.
  • The second law has somewhat similar issues. The corporate-buyers might just not buy the full quantity of the product on one or another pretext or delay payments; and if farmers complain, the corporates have access to a battery of lawyers, the fine print in contracts, the advantage of language, and, above all, the capacity to wait it out.
  • In both the above cases, the problem is of contracts between unequals: whether it is traders or corporates, they are far fewer and with deeper pockets,and they will deal with (poor/little-educated) small farmers (about 85% have two or less hectares of land), resulting in unequal outcomes.
  • We also forget that farmers protest against policies in areas where they hail from:
  • Like in eastern India, farmers revolted in 1860 against indigo-farming, Mappilas revolted in 1921, or even the Warli Adivasi Revolt of 1945. More recently, in the 1970s to 2010s, Sharad Joshi led agitations for the farming sector mainly in Maharashtra, or farmers in Tamil Nadu had protested demanding Cauvery water. There are many more examples.
  • Farmers protest against problems that affect them: they are not a homogeneous lot.

Way Forward

  • The so-far neglected problem of stagnation and high input prices in agriculture can be addressed through a systematic approach proposed in theS. Swaminathan Commission and/or the Ashok Dalwai Committee. 
  • Typical examples are transitions being worked out for farmers to move out of water-soaking paddy crop in Punjab-Haryana to other crops; say, in five years, they would reduce the area under paddy by 25-30%, and the loss they incur in the short run, will be compensated for by the government. This could, for example, also be done for sugarcane in western Maharashtra.
  • Shock treatments do not work anywhere, be it agriculture, industry or the economy. Many an industry, post-1991, shut down due to “shock treatment” then, resulting in a second de-industrialisation and the loss of hundreds of thousands of industrial jobs. The results in agriculture are likely to be no different in the face of shocks.

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