Corporatism as farm laws

The most complex aspect of our democratic system is the subtle management of the separation of powers between the Union and the states; it should have been the simplest. The Constitution, in its very first Article, states univocally that “India, that is Bharat, shall be a Union of States.” It stands to reason that the Centre cannot take the states for granted in our constitutional system.

Part XI of the Constitution pertains to “Relations between the Union and the States”; that itself makes the legal differentiation clear. The administrative roles are clearly laid out under Article 246, whereby three Lists are laid down in the Seventh Schedule of the Constitution – the Union List, wherein the Centre can legislate; the State List; and the Concurrent List. Agriculture is in the State List, as are Trade and Commerce, and Markets and Fairs.

In the 1960s and 1970s, individual states passed their own APMC Acts. In 2003 came a new model Act and in 2007 model rules. In 2017, the Ministry of Agriculture set up a new model Act -- the State/UT Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017. The intention was to “improve the ratio of geography served by each market,” which was then one market for every 485 sq km. This was intended to be brought down to 80 sq km. The model law proposed markets of national importance.

So, to bring in better market access for the farmer, it would seem the Centre brought in three Ordinances in the midst of the Covid pandemic. What was the emergency that made these Ordinances necessary, except that the emergency of Covid would prevent people from gathering and protesting?

On June 5, 2020, three Ordinances were promulgated in the midst of the Covid pandemic -- (i) the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, (ii) the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020, and (iii) the Essential Commodities (Amendment) Ordinance, 2020. Then, on September 27, these Ordinances were replaced by three Acts. In the Rajya Sabha, there was obviously a problem of getting the numbers to pass the Bills. The Chairperson refused to allow a vote as was required under parliamentary rules. Instead, some members of the Opposition who objected to the voice vote were suspended. So, the present farmers’ protest crisis began with an “anti-national” step by the government, its unconstitutional action in Parliament.

The government has apparently felt that the farmers were tied up by the APMC market yards. In practice, the sale of produce outside the market is common. Section 8 of the Punjab Mandis Act allows, in a proviso, that “a producer shall not be deemed to set up, establish or continue or allow to be continued a place as a market for the purpose of the purchase, sale, storage or processing of agricultural produce if he sells his own agricultural produce outside the premises set apart by the committee…”

But the Centre created a “common” national market through the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, to “…promote efficient, transparent and barrier-free inter-state and intra-state trade and commerce of farmers’ produce outside the physical premises of markets or deemed markets notified under various state agricultural produce market legislations…”

A very simple issue: Can small and marginal farmers deal with e-business? Can the local mandi therefore be supplanted by a big monster of a national agri-business conglomerate to his advantage? The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, has removed the right of farmers to go to court. Instead, a revenue magistrate becomes the arbiter. The Act states in its Objects that it is “to provide for a national framework on farming agreements that protects and empowers farmers to engage with agri-business firms, processors, wholesalers, exporters or large retailers for farm services and sale of future farming produce at a mutually agreed remunerative price framework…” And yet the government, while speaking of “remunerative” prices refuses to legally guarantee a “minimum support price” for the farmer.

The Essential Commodities (Amendment) Act, 2020, in Section 2, reduces the scope of control by the state of prices and quantities of foodgrains. This supports the merchant, by whatever name he is called. Today, APMCs pay licence fees, the new corporate entrants need not.

In 2014, one of the promises of candidate Modi was that the BJP, if voted to power, would bring in the MSP statutorily. This MSP, according to the formula of the MS Swaminathan Commission should be all costs plus an additional 50% profit. The BJP went back on that, and in fact is now not willing to provide a statutory basis for it. Who would trust the government?

Modi himself was the chairperson of a 2011 Committee of Chief Ministers on consumer affairs that went into aspects of agriculture reforms. One of the key recommendations his report made was that in creating a national agricultural market, a ministerial-level coordination mechanism should be set up at the national and regional levels for policymaking. Where is the coordination now, with Modi as PM?

The farmers have risen together, without any political support, without any single leader. The most amazing aspect of the protest is the farmers’ clear mistrust of the government’s intentions. The government used water cannons against them, but the farmers didn’t flinch. It has been accused of trying to divide the protesters. It has tried to wear down the farmers with seven rounds of talks. It says the farmers are not willing to listen, but why is the government so adamant? It insists that the laws are beneficial to the farmers. If so, why are they objecting to them?

A joke on social media is that the farmers should not try to negotiate with the government, they should directly talk to Ambani and Adani. But this is black humour. Benito Mussolini perhaps said it more clearly; many decades ago in Italy, he said, “Fascism should more appropriately be called Corporatism because it is the merger of state and corporate power.”

(The writer is a former Secretary to the Government of India)