Trends

What Was The Government’s Proposal And Why Did Indian Farmers Reject It?

On December 9, the government had sent a proposal to the farmers to arrive at a middle ground regarding the Farm Bill. However, farmer unions rejected it.

We are in the fourth month of the farmers’ agitation, however, an agreement between the Centre and farmers still doesn’t seem feasible. Farmers’ unions are adamant to not settle for anything less than the repeal of the three contentious farm laws and are determined to continue their protests. But the government is doubling down on their stance to keep the laws in place whilst insisting that they are open to options of modifications and discussions.

On December 9, the government had sent a proposal to the farmers after a meeting between Home Minister Amit Shah and 13 farmer leaders, however, last week, the farmer unions had unanimously rejected the Modi government’s proposal draft and in a written reply to the Centre, had reiterated their demand for a total repeal of the laws. They decided to send a written reply a week after verbally rejecting the laws at a press conference. Let’s have a look at what the proposal suggested and why farmer unions rejected it.

What did the government’s proposal to farmers say?

1. The Mandis

The issue: Earlier, farmers could only sell their produce at APMC mandis (marketplace) but with the Farm Bill 2020, farmers can now partner with private companies to sell their crops. Indian farmers are afraid that the private mandis would overtake the APMC mandis as corporate houses don’t have to pay any tax or cess to the State government. In addition, private companies are bound to be stronger and have more capital which puts them in power compared to government marketplaces. Farmers fear that APMCs will die out and leave the farmers at the mercy of big corporations.

Government’s solution: To this, the Centre has proposed that it will allow State governments to place tax and cess on private agricultural marketplaces as well. They’ve also made it easier for farmers to register at a private mandi compared to registering at an APMC mandi. In APMC mandi, farmers had to register with the board to trade, however, in a private mandi, farmers simply need a PAN card to start trading.

2. Contract Farming

The issue: Farmers felt that entering into a contract or agreement with corporates would tip the scales in favour of the private companies. According to the bill, farmers are not allowed access to the courts and they aren’t given provisions to file a case against potentially corrupted bureaucrat who could be in charge of handling contract between farmers and corporates.

Government’s solution: To this, the government says that they would add a provision to allow farmers to go to civil courts in case of a dispute or disagreement.

3. Privatisation

The issue: Farmers are under the impression that if these contracts go sour, corporates will have the authority to take over the land or mortgage it. Basically, farmers fear losing their land by partnering with corporates.

The government’s solution: The Centre has said that according to the Agricultural Settlement Act, there can be no settlement on sale, lease and mortgage of agricultural land. In addition, corporates cannot construct anything on farmers’ land and if they do construct something, they need to dismantle it after the contract is over. So, if companies fail to destroy the construction, the farmers will end up owing it since it is on his/her land. Also, the government has assured farmers that the crop buyer has no right to demand mortgage on the construction.

4. Minimum Selling Price (MSP)

The issue: The farmers want the government to give them a legal right to get MSP for on all products. Currently, MSP is available only on 25 crops such as Paddy, Jowar, Bajra, Maize, Ragi, Arhar, Moong, etc. In addition, farmers want the government to a different method to calculate the MSP, particularly one suggested by the MS Swaminathan Commission. The organisation, known for advocating for better prices for farmers, had recommended that the MSP should be 50 per cent higher than the total cost of production.

The government’s solution: The Centre has said it will give a written assurance to farmers about granting MSP on all crops to all farmers. However, there has been no mention of changing MSP calculations.

5. Punishment for burning stubble

The issue: Under the Air High-quality Administration of NCR Ordinance 2020, there is a provision that says farmers who burn farm residue can be imprisoned for 5 years and charged with a humongous fine of Rs 1 crore.

The government’s solution: The government hasn’t mentioned any amendments or even addressed this concern. They are under the impression that objections of the farmers will probably be overcome.

6. Electricity Bill Amendment

The issue: Farmers want the Centre to drop the Electricity Bill Amendment. After the Bill is passed, farmers will have to pay a monthly power tariff of Rs 5,000-6,000, while subsidized domestic consumers will have to pay at least Rs 8-10 per unit for the consumption of up to 300 units per month. Farmers are worried that if the Bill becomes a law, they will lose free power supply as the government will discontinue free power supply to farmers in Punjab.

Government’s solution: This issue hasn’t been addressed either and the government hasn’t mentioned bringing any change to the current system of electricity costs for farmers.

7. Stock piling

The issue: In the third provision of the farm law, the government had removed the storage limit for various essential commodities such as cereals, pulses, oilseeds, onion and potatoes except in times of war, famine and natural calamities. Farmers insist that this will lead to hoarding as traders will stock farm produce during the harvest season, when prices are generally lower, and then release it later when prices increase. It could also undermine food security as in the future as the States would have no information about how much food is available in the State. In short, farmers fear hoarding can lead to intentional volatility of prices and the emergence of black markets.

Government’s solution: The Centre hasn’t proposed any amendment to this part of the law.

Why did Indian farmers reject the Centre’s proposal?

In relation to mandis and letting the State tax private mandis, farmers believe that giving away the responsibility to the State government won’t solve the problem as the State government’s role in the solution is very vague. Farmers feel that the Centre’s position on this seems to argue that agriculture is a State subject (it is, according to the constitution) and to counter that, farmers are asking - if agriculture is a State subject then why is the Centre interfering in it?

Moving on to the unequal power dynamic between farmers and corporates, farmers have expressed that adding a provision to allow farmers to go to civil courts in case of a dispute isn’t enough. They say that it doesn’t really solve the problem of a higher-powered party entering into the contract. Also, the manner in which this law was designed portrays the government’s favouritism towards the corporates, according to farmers. For example - the original law stated there would be no access to courts, government officials will be solving disputes and the farmers can’t file a case against the government officials.

For their quest to get MSP on their crops, farmers are saying that a written assurance is not enough as it’s not the same as giving a citizen a legal right that can be defended in court. So, their demand is for a legal right, not merely written assurance.

Lastly, the farmers’ concerns with stockpiling provisions, Electricity Bill Amendment and punishment for stubble burning haven’t been addressed by the government at all, which was all the more reason for farmers to reject the proposal.

Trends

What Was The Government’s Proposal And Why Did Indian Farmers Reject It?

On December 9, the government had sent a proposal to the farmers to arrive at a middle ground regarding the Farm Bill. However, farmer unions rejected it.

We are in the fourth month of the farmers’ agitation, however, an agreement between the Centre and farmers still doesn’t seem feasible. Farmers’ unions are adamant to not settle for anything less than the repeal of the three contentious farm laws and are determined to continue their protests. But the government is doubling down on their stance to keep the laws in place whilst insisting that they are open to options of modifications and discussions.

On December 9, the government had sent a proposal to the farmers after a meeting between Home Minister Amit Shah and 13 farmer leaders, however, last week, the farmer unions had unanimously rejected the Modi government’s proposal draft and in a written reply to the Centre, had reiterated their demand for a total repeal of the laws. They decided to send a written reply a week after verbally rejecting the laws at a press conference. Let’s have a look at what the proposal suggested and why farmer unions rejected it.

What did the government’s proposal to farmers say?

1. The Mandis

The issue: Earlier, farmers could only sell their produce at APMC mandis (marketplace) but with the Farm Bill 2020, farmers can now partner with private companies to sell their crops. Indian farmers are afraid that the private mandis would overtake the APMC mandis as corporate houses don’t have to pay any tax or cess to the State government. In addition, private companies are bound to be stronger and have more capital which puts them in power compared to government marketplaces. Farmers fear that APMCs will die out and leave the farmers at the mercy of big corporations.

Government’s solution: To this, the Centre has proposed that it will allow State governments to place tax and cess on private agricultural marketplaces as well. They’ve also made it easier for farmers to register at a private mandi compared to registering at an APMC mandi. In APMC mandi, farmers had to register with the board to trade, however, in a private mandi, farmers simply need a PAN card to start trading.

2. Contract Farming

The issue: Farmers felt that entering into a contract or agreement with corporates would tip the scales in favour of the private companies. According to the bill, farmers are not allowed access to the courts and they aren’t given provisions to file a case against potentially corrupted bureaucrat who could be in charge of handling contract between farmers and corporates.

Government’s solution: To this, the government says that they would add a provision to allow farmers to go to civil courts in case of a dispute or disagreement.

3. Privatisation

The issue: Farmers are under the impression that if these contracts go sour, corporates will have the authority to take over the land or mortgage it. Basically, farmers fear losing their land by partnering with corporates.

The government’s solution: The Centre has said that according to the Agricultural Settlement Act, there can be no settlement on sale, lease and mortgage of agricultural land. In addition, corporates cannot construct anything on farmers’ land and if they do construct something, they need to dismantle it after the contract is over. So, if companies fail to destroy the construction, the farmers will end up owing it since it is on his/her land. Also, the government has assured farmers that the crop buyer has no right to demand mortgage on the construction.

4. Minimum Selling Price (MSP)

The issue: The farmers want the government to give them a legal right to get MSP for on all products. Currently, MSP is available only on 25 crops such as Paddy, Jowar, Bajra, Maize, Ragi, Arhar, Moong, etc. In addition, farmers want the government to a different method to calculate the MSP, particularly one suggested by the MS Swaminathan Commission. The organisation, known for advocating for better prices for farmers, had recommended that the MSP should be 50 per cent higher than the total cost of production.

The government’s solution: The Centre has said it will give a written assurance to farmers about granting MSP on all crops to all farmers. However, there has been no mention of changing MSP calculations.

5. Punishment for burning stubble

The issue: Under the Air High-quality Administration of NCR Ordinance 2020, there is a provision that says farmers who burn farm residue can be imprisoned for 5 years and charged with a humongous fine of Rs 1 crore.

The government’s solution: The government hasn’t mentioned any amendments or even addressed this concern. They are under the impression that objections of the farmers will probably be overcome.

6. Electricity Bill Amendment

The issue: Farmers want the Centre to drop the Electricity Bill Amendment. After the Bill is passed, farmers will have to pay a monthly power tariff of Rs 5,000-6,000, while subsidized domestic consumers will have to pay at least Rs 8-10 per unit for the consumption of up to 300 units per month. Farmers are worried that if the Bill becomes a law, they will lose free power supply as the government will discontinue free power supply to farmers in Punjab.

Government’s solution: This issue hasn’t been addressed either and the government hasn’t mentioned bringing any change to the current system of electricity costs for farmers.

7. Stock piling

The issue: In the third provision of the farm law, the government had removed the storage limit for various essential commodities such as cereals, pulses, oilseeds, onion and potatoes except in times of war, famine and natural calamities. Farmers insist that this will lead to hoarding as traders will stock farm produce during the harvest season, when prices are generally lower, and then release it later when prices increase. It could also undermine food security as in the future as the States would have no information about how much food is available in the State. In short, farmers fear hoarding can lead to intentional volatility of prices and the emergence of black markets.

Government’s solution: The Centre hasn’t proposed any amendment to this part of the law.

Why did Indian farmers reject the Centre’s proposal?

In relation to mandis and letting the State tax private mandis, farmers believe that giving away the responsibility to the State government won’t solve the problem as the State government’s role in the solution is very vague. Farmers feel that the Centre’s position on this seems to argue that agriculture is a State subject (it is, according to the constitution) and to counter that, farmers are asking - if agriculture is a State subject then why is the Centre interfering in it?

Moving on to the unequal power dynamic between farmers and corporates, farmers have expressed that adding a provision to allow farmers to go to civil courts in case of a dispute isn’t enough. They say that it doesn’t really solve the problem of a higher-powered party entering into the contract. Also, the manner in which this law was designed portrays the government’s favouritism towards the corporates, according to farmers. For example - the original law stated there would be no access to courts, government officials will be solving disputes and the farmers can’t file a case against the government officials.

For their quest to get MSP on their crops, farmers are saying that a written assurance is not enough as it’s not the same as giving a citizen a legal right that can be defended in court. So, their demand is for a legal right, not merely written assurance.

Lastly, the farmers’ concerns with stockpiling provisions, Electricity Bill Amendment and punishment for stubble burning haven’t been addressed by the government at all, which was all the more reason for farmers to reject the proposal.

Trends

What Was The Government’s Proposal And Why Did Indian Farmers Reject It?

On December 9, the government had sent a proposal to the farmers to arrive at a middle ground regarding the Farm Bill. However, farmer unions rejected it.

We are in the fourth month of the farmers’ agitation, however, an agreement between the Centre and farmers still doesn’t seem feasible. Farmers’ unions are adamant to not settle for anything less than the repeal of the three contentious farm laws and are determined to continue their protests. But the government is doubling down on their stance to keep the laws in place whilst insisting that they are open to options of modifications and discussions.

On December 9, the government had sent a proposal to the farmers after a meeting between Home Minister Amit Shah and 13 farmer leaders, however, last week, the farmer unions had unanimously rejected the Modi government’s proposal draft and in a written reply to the Centre, had reiterated their demand for a total repeal of the laws. They decided to send a written reply a week after verbally rejecting the laws at a press conference. Let’s have a look at what the proposal suggested and why farmer unions rejected it.

What did the government’s proposal to farmers say?

1. The Mandis

The issue: Earlier, farmers could only sell their produce at APMC mandis (marketplace) but with the Farm Bill 2020, farmers can now partner with private companies to sell their crops. Indian farmers are afraid that the private mandis would overtake the APMC mandis as corporate houses don’t have to pay any tax or cess to the State government. In addition, private companies are bound to be stronger and have more capital which puts them in power compared to government marketplaces. Farmers fear that APMCs will die out and leave the farmers at the mercy of big corporations.

Government’s solution: To this, the Centre has proposed that it will allow State governments to place tax and cess on private agricultural marketplaces as well. They’ve also made it easier for farmers to register at a private mandi compared to registering at an APMC mandi. In APMC mandi, farmers had to register with the board to trade, however, in a private mandi, farmers simply need a PAN card to start trading.

2. Contract Farming

The issue: Farmers felt that entering into a contract or agreement with corporates would tip the scales in favour of the private companies. According to the bill, farmers are not allowed access to the courts and they aren’t given provisions to file a case against potentially corrupted bureaucrat who could be in charge of handling contract between farmers and corporates.

Government’s solution: To this, the government says that they would add a provision to allow farmers to go to civil courts in case of a dispute or disagreement.

3. Privatisation

The issue: Farmers are under the impression that if these contracts go sour, corporates will have the authority to take over the land or mortgage it. Basically, farmers fear losing their land by partnering with corporates.

The government’s solution: The Centre has said that according to the Agricultural Settlement Act, there can be no settlement on sale, lease and mortgage of agricultural land. In addition, corporates cannot construct anything on farmers’ land and if they do construct something, they need to dismantle it after the contract is over. So, if companies fail to destroy the construction, the farmers will end up owing it since it is on his/her land. Also, the government has assured farmers that the crop buyer has no right to demand mortgage on the construction.

4. Minimum Selling Price (MSP)

The issue: The farmers want the government to give them a legal right to get MSP for on all products. Currently, MSP is available only on 25 crops such as Paddy, Jowar, Bajra, Maize, Ragi, Arhar, Moong, etc. In addition, farmers want the government to a different method to calculate the MSP, particularly one suggested by the MS Swaminathan Commission. The organisation, known for advocating for better prices for farmers, had recommended that the MSP should be 50 per cent higher than the total cost of production.

The government’s solution: The Centre has said it will give a written assurance to farmers about granting MSP on all crops to all farmers. However, there has been no mention of changing MSP calculations.

5. Punishment for burning stubble

The issue: Under the Air High-quality Administration of NCR Ordinance 2020, there is a provision that says farmers who burn farm residue can be imprisoned for 5 years and charged with a humongous fine of Rs 1 crore.

The government’s solution: The government hasn’t mentioned any amendments or even addressed this concern. They are under the impression that objections of the farmers will probably be overcome.

6. Electricity Bill Amendment

The issue: Farmers want the Centre to drop the Electricity Bill Amendment. After the Bill is passed, farmers will have to pay a monthly power tariff of Rs 5,000-6,000, while subsidized domestic consumers will have to pay at least Rs 8-10 per unit for the consumption of up to 300 units per month. Farmers are worried that if the Bill becomes a law, they will lose free power supply as the government will discontinue free power supply to farmers in Punjab.

Government’s solution: This issue hasn’t been addressed either and the government hasn’t mentioned bringing any change to the current system of electricity costs for farmers.

7. Stock piling

The issue: In the third provision of the farm law, the government had removed the storage limit for various essential commodities such as cereals, pulses, oilseeds, onion and potatoes except in times of war, famine and natural calamities. Farmers insist that this will lead to hoarding as traders will stock farm produce during the harvest season, when prices are generally lower, and then release it later when prices increase. It could also undermine food security as in the future as the States would have no information about how much food is available in the State. In short, farmers fear hoarding can lead to intentional volatility of prices and the emergence of black markets.

Government’s solution: The Centre hasn’t proposed any amendment to this part of the law.

Why did Indian farmers reject the Centre’s proposal?

In relation to mandis and letting the State tax private mandis, farmers believe that giving away the responsibility to the State government won’t solve the problem as the State government’s role in the solution is very vague. Farmers feel that the Centre’s position on this seems to argue that agriculture is a State subject (it is, according to the constitution) and to counter that, farmers are asking - if agriculture is a State subject then why is the Centre interfering in it?

Moving on to the unequal power dynamic between farmers and corporates, farmers have expressed that adding a provision to allow farmers to go to civil courts in case of a dispute isn’t enough. They say that it doesn’t really solve the problem of a higher-powered party entering into the contract. Also, the manner in which this law was designed portrays the government’s favouritism towards the corporates, according to farmers. For example - the original law stated there would be no access to courts, government officials will be solving disputes and the farmers can’t file a case against the government officials.

For their quest to get MSP on their crops, farmers are saying that a written assurance is not enough as it’s not the same as giving a citizen a legal right that can be defended in court. So, their demand is for a legal right, not merely written assurance.

Lastly, the farmers’ concerns with stockpiling provisions, Electricity Bill Amendment and punishment for stubble burning haven’t been addressed by the government at all, which was all the more reason for farmers to reject the proposal.

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