Exorcising the Ghost of the Repealed Three Farm Laws?

Proposed National Agricultural Marketing Policy: Farmers Fear a Revival of the Scrapped Three Farm Laws After Historic Agitation.

First published in the Chandigarh edition of “The Hindustan Times” of 12th December, 2024.

Proposed National Agricultural Marketing Policy: A Critical Review

The Draft National Framework on Agricultural Marketing, issued on November 25, 2024, has sparked widespread debate and concern. The release of this draft policy comes just three years after the historic farmer agitation against the three contentious farm laws, which were perceived by farmers nationwide as a move to hand over the agricultural marketing system to large private corporations. The agitation, considered the largest and longest in India's history, culminated in the Prime Minister announcing the repeal of these laws in November 2021. Despite this, many of the farmers' demands, including the statutory guarantee of Minimum Support Prices (MSP) for all crops, remain unresolved. Farmers allege that this guarantee was part of the conditions agreed upon by the government during the withdrawal of the agitation. However, a satisfactory resolution has yet to be reached, even after multiple discussions with Punjab's farmer organizations in the lead-up to the 2022 Punjab Vidhan Sabha elections.

The timing of this draft policy is particularly sensitive. Farmers continue their protests at the Punjab-Haryana border in Shambhu, blocking traffic, and are frequently thwarted in their attempts to march on foot to Delhi. With another march planned for December 14, the government's limited 15-day period for public comments on the draft policy has only intensified apprehensions. This approach has led to speculation that the government might be attempting to reintroduce elements of the repealed laws under a new guise¹.

Constitutional Validity and Contents of the Policy

The policy aims to address long-standing challenges in agricultural marketing through a unified national approach. However, it raises critical questions about its constitutional basis and potential implications for state autonomy and farmer welfare. Agriculture and agricultural marketing are state subjects under the Constitution (Entries 14 and 28, List II), while agricultural research is on the Union List (Entry 14, List I). The central government's intervention in state matters through a national framework could be seen as an overreach, though it may justify this move as necessary for economic integration and enhanced farmer welfare.

The draft policy proposes several initiatives to reform agricultural marketing. It seeks to empower state agricultural ministers to spearhead marketing reforms through a dedicated committee, much like the GST Council. The emphasis on automation and digitalization of agricultural trading processes aims to create a seamless and efficient system. The rationalization of fees, licenses, and regulations is intended to simplify agricultural trade and reduce costs. The framework envisions the creation of a unified national agricultural market portal, which would provide real-time information and integrate market systems across the country. Additionally, market intelligence and price forecasting mechanisms are proposed to guide farmers in making informed decisions. While these measures appear forward-looking, their implementation could disrupt the established systems, particularly in states like Punjab and Haryana.

Concerns of the Farmers

Farmers in Punjab and Haryana, who have historically relied on robust local market systems, have expressed several concerns. Many see it as the silent and backdoor resurrection of the three farm laws that were taken by them as dead and buried. The proposed reforms may dilute state authority over agricultural marketing, undermining the federal structure. The policy’s silence on the statutory guarantee of MSP, a central issue for farmers, is seen as a significant omission by the kisan organisations. Increased private sector involvement raises fears of monopolization, potentially reducing farmers' bargaining power, potentially recreating the atmosphere when the three contentious farm laws were originally enacted. Established mandi systems, which are vital for Punjab and Haryana farmers, might face erosion under a national framework. The unique infrastructure needs of Punjab and Haryana may also not align with the proposed national approach, leading to inefficiencies.

The draft policy also neglects to address international agricultural marketing. Export duties, bans, and Minimum Export Price policies imposed by the Ministry of Commerce often result in significant losses for Indian farmers, particularly when global prices for commodities like milled parmal rice are high. A comprehensive framework must balance domestic needs with export opportunities to maximize benefits for farmers.

Suggestions for Improvement

To make the policy inclusive and effective, the government should prioritize meaningful engagement with stakeholders, including farmer unions, state governments, and experts. Provisions addressing export-related challenges, such as international marketing and pricing mechanisms, are essential to ensure that Indian farmers benefit from global trade opportunities. Investing in public-sector infrastructure for agro-processing, cold chains, and transportation, particularly for perishable goods targeting global markets, could strengthen the agricultural marketing system. Strengthening Farmer Producer Organizations and cooperatives could enhance farmers' market participation, while an integrated policy approach that resolves the MSP issue would address a critical gap. Protecting state autonomy while fostering national integration through cooperative federalism remains vital.

The Draft National Framework on Agricultural Marketing presents an ambitious plan to reform agricultural markets but falls short of addressing key issues such as MSP, state autonomy, and international trade. Its timing, limited consultation window, and perceived similarities with the repealed farm laws have raised significant concerns. The Government of India must adopt a more inclusive and balanced approach, ensuring that the policy not only promotes market efficiency but also safeguards the interests and welfare of India's farming community. Else its implementation may hit air-pockets, if not road blocks, even if it is officially notified.

(KBS Sidhu: The author is a superannuated IAS officer who retired as Special Chief Secretary, Punjab.)

1. https://www.hindustantimes.com/cities/chandigarh-news/guest-column-centre-s-new-draft-policy-framework-on-agri-marketing-raises-concerns-101733934222867.html