New farm laws will impoverish rural India, eventually lead to collapse of PDS

Date:12-23-2020

Farmers across the country are agitating in a single voice for the rollback of the recently enacted farm laws. The new laws have the potential to restructure Indian agriculture in areas of production, procurement, marketing, pricing, stocking and land ownership. Serious discussions are on — in favour and against their possible impact on the livelihood of our farmers. However, little attention is being paid to their potential effects on the landless and agricultural labourers.

About 60 per cent of our population is engaged in agriculture and allied activities. Changes in production, marketing and food distribution directly impact their welfare. Nearly 263 million are directly dependent on agriculture and the rest on agriculture allied small industries such as brick-kilns, quarries and small cottage industries in the villages. Many also migrate to neighbouring towns and states to work as casual labourers during the non-agricultural seasons.

How will the laws affect the employment and livelihood opportunities of the landless families? Out of the three contentious laws, The Farmers’ (Empowerment and Protection) Agreement of Price Assurance and Farm Services, 2020 is going to have the most impairing repercussions for the landless labourers. The Union government claims that the law will enable agri-business firms, retail supermarket chains to enter into prior agreements with small farmers for production, pricing and purchase of agricultural products. 

The second major element of the law is that it facilitates leasing of land from small farmers (possessing below 1.0 ha of land) and pooling of plots to turn them into large farms and cultivate them with modern machinery and technology. The Niti Aayog has been arguing that since small farms are non-profitable it is necessary to opt for corporate farming. If this is implemented in spirit and with no land reform agenda on the horizon, the law will lead to large-scale landlessness, unemployment and further impoverishment of rural India.

As per the 2011 Census, there are 494.9 million (49.49 crore) landless individuals in villages, who are directly or indirectly dependent on cultivation for their livelihoods. In theory, they should find 170 days of employment in two crop cultivated areas, though the actual employment days are far less. 

With large farms, modern technology and the use of heavy machinery for a majority of field operations, a large chunk of them are certain to lose employment with no rehabilitation prospects in sight. In addition, according to Census 2011, around 1.2 crore or nearly 14 per cent of the farming community are tenant farmers or sharecroppers, who work in fields owned by others.

The amendments claim to provide a level-playing field to both farmers and traders including agri-business firms, retail supermarket chains parallel to the APMC market yards. Although APMC yards constitute only about 30 per cent of all purchases from farmers, they assure a minimum support price (MSP) for the produce. With the new laws, private buyers will dominate the APMC mandis thus denying small farmers the assurance of selling at MSP. 

In Bihar, which abolished the APMC mandi structure in 2006, the small and tenant farmers are now forced to sell their maize produce to private traders and agri-business corporations at prices about 30 per cent lower than the MSP. Small tenant farmers do not have the clout to bargain with large corporations and cannot transport produce elsewhere in expectation of a higher price.

These days, farmers tend not to keep any portion of the harvest for family consumption and sell the entire produce in markets generally. Impoverishment of the rural population is so severe that a majority of them is dependent on the subsidised grain provided through the PDS. Most of these are landless farm workers and small farmers.

With purchases in APMC mandis at MSPs going out, the agricultural crisis would further deepen and affect the nation’s food security. With the diminishing of FCI, the PDS beneficiaries are being left to the mercy of corporate controlled markets. Eventually, the PDS will collapse and the poor will be denied whatever ration they have been getting under the Food Security act.

All sections of society — farmers, agricultural labourers, small shopkeepers — must oppose the new farm laws and hold the central government accountable for trying to jeopardise the country’s food security.