In the Union Budget 2020-21, the finance minister Nirmala Sitharaman has laid down three pillars for ensuring growth for achieving $5 trillion economy in due course – Aspirational India, Economic Development and Caring Society. Under Caring Society agriculture, rural development, water and sanitation find mention. By default there is an admission “Prosperity to farmers can be ensured by making farming competitive. Farm markets need to be liberalized.” What does it mean? Instead of taking up the onus, the Union Government has thrown the ball in the court of State governments to liberalise farm markets through a plethora of model Acts floated by it from time to time.

Why not the Union government directly take up this challenge? If the Union government can sign the Agreement on Agriculture at WTO, without consulting the States, with a view to facilitate global trade in agriculture, then why can’t it liberalise internal trade in agriculture? Of course under the present dispensation agriculture is under Sates List. Similarly, many indirect taxes were under States List. In the name of a common market, the Union government, through appropriate legislations, brought many such taxes in the general pool for the revenues to be distributed among the Union and States. Thus the new regime Goods and Services Taxes (GST) was born. Why cannot be such in the case of internal agriculture marketing?

A high level committee headed by CEO of National Rainfed Area Authority, Ashok Dal way back in 2017 recommended placing agricultural marketing in Concurrent List in the Seventh Schedule of the Constitution for setting up of a common unified agricultural market in the country. Article 307 of the Indian Constitution mandates Parliament to legislate appropriate laws and appoint an Authority for ensuring free trade in agricultural commodities across the country. Item 42 of the Union List can be used for setting up of a common unified agricultural market across the country. Since the model APMC Act was floated after 1955, it is not protected by Constitutional provision of Art 305. Though Article 303 and 304 talk of restrictions to be imposed, Article 301 talks of “Freedom of trade, commerce and intercourse.- Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.” Thus the spirit of the Constitution is clear. It empowers the Parliament to legislate and thus paves the way for free trade in agricultural commodities across the country.

Agriculture is the only sector where the producer (farmer) is not able to decide upon the prices of his produces. He has no holding capacity to store and decide upon the price he wants to sell. Only option is to make distress sales and produce and perish at the times of excess production. After suffering from excess production he limits his production capacity causing shortage in the market and consumers suffer. How long can this evil cycle be allowed to continue?

The Union Budget, however, talks of viability gap funding for setting up of efficient warehouses at block/taluka levels. A village storage scheme is proposed to be run by self help groups (SHGs). But how long we have wait for setting up warehousing facilities and seamless cold supply chains and refrigerated transport in cluster of villages? Why does not the Union government take up the onus on itself and directly fund Zilla Parishads to do the job in blocks/ talukas and cluster of villages. Zilla Parishads, being an elected body of the people should be on board.

The Union government has given lot of fiscal sops and incentives to corporate houses and exporters foregoing a revenue collection of about Rs 4,00,000 millions, according to some analysts, with a view to attract investments and foreign exchange earnings for achieving the target of $5 trillion economy. But who stands to benefit if India becomes a $5 trillion economy? It may bring us a sense of pride, but to benefit the common man it is the GDP per capita that matters. GDP be it in dollars or rupee has to be divided by the total population to arrive at GDP per capita. India with $2.7 trillion economy has GDP per capita at $2,015 only as per 2018 World Bank data. It is behind Indonesia which has GDP per capita at $3,893 and China at GDP per capita at $9,770. Of course it is ahead of neighbouring Bangladesh which has GDP per capita at $1,698. Therefore aiming at $5 trillion economy is not sufficient. The country needs to have inclusive growth and more of financial inclusion. If the government can vouch for Ease of Doing Business, Ease of Living, then why can it not say Ease of Farming?

The plethora of model agricultural marketing Acts floated by the Union government from time to time urging the States to modify the APMC Act prevalent in their area has caused asymmetry in agricultural trade across the country. Bihar has scrapped APMC Act without providing adequate laws to protect farmers’ interests. Some States have delisted fruits and vegetables from the purview of APMC Act without making adequate provisions in their law whereby the farmer can get adequate return by sale.

Contract farming has become an instrument whereby the corporate houses act like a commission agent or arthiyas imposing their terms and conditions. The e-trading and E-NAM has not benefitted majority of the farmers as many of them are not computer literate. Under Bhavantar Bhukhtan Yojana designed to pay the difference if the prices fall below the Minimum Support Price (MSP) has not befitted majority of farmers.

In this era of globalization of trade, the policy approach of the government should be to make every farmer an entrepreneur and computer literate and they should not only be cultivating crops but also undertake grading and quality assessment or else they will continue to be exploited by processors, exporters and retail chains. Some Farmer Producer Organisations (FPOs) are doing some good work. Finally the need of the hour is for policy intervention to facilitate Ease of Farming by setting up of a common unified agricultural market across the country with a designated authority to ensure free and fair trade. Adequate warehouses and cold storages with refrigerated transport system should be made available in cluster of villages so that farmers can store their produces and bargain for sale. (IPA Service)