Former Prime Minister of India, Dr. Manmohan Singh had said in the Parliament that history will be kinder to him than the media and the opposition. Dr. Manmohan Singh, during his tenure as Finance Minister from 1991 to 1996, initiated the historic economic reforms that changed the contours of Indian economy.
No government afterwards did dare to reverse this reform process. During the decade of UPA rule when Dr Manmohan Singh was the Prime Minister-from 2004 to 2014- this reform process continued, albeit slowly.
History may be kinder to Dr. Manmohan Singh, but his party and his party men are not. Its irony of history that Congressmen try to block the recently announced agricultural market reforms by Modi government that has its beginning in Dr.Singh’s economic philosophy (Manmohanomics).
Dr. Singh must be sulking when Congressmen utter the same words that were uttered by the opposition parties when he started the 1991 reform process. Then the oft repeated lines were “Ek east india company aaithiaurbharatkogulambnagyithi. Ab to hjaroncompniyonkeliyedarwajekholdiyehain. Woh din door nahi jab bharat dobra se ghulam ban jayega”.
The fear of the East India Company and PL-480 still rules the mind of some of our politicians and opinion leaders. The East India Company implanted the roots of British Empire in India. There was continuous struggle for almost hundred years in India to free itself from the clutches of the Raj.
PL-480 is the name of the variety of wheat that remind us of our starvation and food scarcity. PL-480 was the variety that we imported from America after back to back droughts and increasing mouths to feed.
Politicians and bureaucrats who scare us with the names of East India Company and PL-480, refuse to acknowledge emergence of the confident and resurgent India.
India with demographic advantage and skilled human capital; India with strong democratic history and institutions; India Inc. at par with its world peers. Perpetuating fear of food scarcity era serve the interests of bureaucrats and politicians only.
Now it is 1991 moment for agriculture. Modi govt has bitten the bait of long awaited reform in the agricultural market sector, demanded by some section of not only India Inc. but farmer organisations too.
Indian agricultural space needed the unshackling of its chains in the form of some laws that has its roots in the scarcity and ‘socialistic economy’ era.
Let us discuss the three laws introduced through the ordinance route.
First ‘The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020’ or the FPTC Ordinance — to end the monopoly of the Agricultural Produce Market Committees (APMC) — allow anyone to purchase /sell agricultural produce at anywhere in India.
Now there will be no inter-state barriers for transportation and marketing of agricultural commodities. Seller of agri products can choose and exercise his options of high price available at anywhere in India.
This APMC’s were a hurdle not only for movement of goods but for entry of new buyers also. A few buyers hurt farmers as there is a little competition among them.
You need political patronage and help for acquiring a new licence of Arhtiya (commission agent)for grains or vegetables in the mandis. Now anyone can purchase if he hasa valid PAN card.
The abolition of market fee or cess on private yards that operate outside the purview of APMC’ will help private investment pick up.
The Ordinance say that there will be ‘no market fee or cess or levy by whatever name called under any state APMC act or any other State law, shall be levied on any farmer or trader or electronic trading and transaction platform for trade and commerce in scheduled farmers produce in a trade area’.
The appointments of chairmans and members of markets committees are only some kind of goodies that the incumbent politicians hand over to their loyalists.
With high tax rates on agricultural commodities purchased/sold in the Mandis, APMC’s are of little help to farmers.
Second “The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020," legalise the contract farming.
The government has allowed farmers and private companies to enter into a written agreement for any agricultural produce.
Contract farming is already being practised inPunjab earlier to this ordinance, but now it will have legal sanction.
With contract farming now farmers can pass the risk of the fluctuation of price to the big business houses, wholesalers and exporters. It will also help better cropping decisions by farmers before sowing a particular crop.
Third The Essential Commodities (Amendment) Ordinance, 2020 will allow big buyers, wholesalers, processor and exporters to hold large stocks of agri-commodities.
This will reduce supply chain disruptions in agricultural commodities. Insufficient warehousing infrastructure and our inability to store farm products results in the harvest time glut and scarcity during lean season especially of the perishable items.
This ordinance with removal of restriction on storage or hoarding will ensure private investment in warehousing that can be helpful in continuity of supply chain of food items.
This can help ensure that we don’t see regular scenes of farmers dumping their produce on roads. It will be beneficial for consumers also with stability of food prices.
Some political parties and interest groups have expressed their fears of government divesting in FCI and undo the MSP mechanism. These are institutions and mechanism from food scarcity era.
India today is the largest producer of rice in the world and the second largest producer of wheat. Now when the grain coffers are overflowing we need to shift our priorities. Punjab is under vicious circle of paddy and wheat. MSP can be remodelled to help in crop diversification.
The way to ‘complete procurement’ of paddy and wheat in the mandis goes through the pockets of the inspectors of the procurement agencies.
This substandard grain procured then lies in the open yards of FCI. So it benefits only the inspectors of procurement agencies who share their loot with the bureaucrats and politicians for appointing them as in-charge of procurement in the mandis.
So, Modi govt deserve a praise for pursuing the Manmohanomics in agriculture sector that lag behind in terms of growth due to lack of private investment in the sector, partly because of some archaic laws of bygone era.
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