A group of economists have asked the Union Government to repeal the three Farm Acts that have triggered nation-wide protests across the country.
In a letter to Narendra Singh Tomar, Union Minister of Agriculture and Farmers’ Welfare, they said that the Government should repeal the recent Farm Acts which are not in the best interests of the small and marginal farmers of the country.
“We do believe that improvements and changes are required in the agricultural marketing system for the benefit of millions of small farmers, but the reforms brought by these Acts do not serve that purpose,” they said.
The signatories included D Narasimha Reddy, Professor of Economics (retired), University of Hyderabad; Kamal Nayan Kabra, Professor of Economics (retd), Indian Institute of Public Administration; and Ranjit Singh Ghuman, Professor of Eminence (Economics), Guru Nanak Dev University, Amritsar.
“They (the Acts) are based on wrong assumptions and claims about why farmers are unable to get remunerative prices, about farmers not having freedom to sell wherever they like under the previously existing laws, and about regulated markets not being in the farmers’ interests,” they argued.
They pointed out that a key problem with the Acts is the creation of a practically unregulated market in the “trade area” side by side with a regulated market in APMC market yards. These things are governed by two different Acts and set of rules.
“If collusion and market manipulation are concerns inside the APMC markets, the same collusion and market manipulation are likely to continue in the unregulated market space,” they argued. Even before these Acts came into being, a large percentage of the sale of agricultural commodities happened outside the APMC regulated market yards.
“However, the APMC market yards still set the benchmark prices, giving price signals to the markets. Without these price signals, the fragmented markets could pave the way for local monopolies,” they said.
They pointed out that the Act on contract farming failed to address the issue of the huge asymmetry between the two parties — small farmers and companies.
“The current scenario is likely to continue, where most of the contract farming happens through unwritten arrangements with no recourse for the farmers,” they felt.
The economists also expressed concern about likely domination by big agri-businesses in the new regime. This, they contended, could lead to consolidation of the market and the value chains in the hands of a few big players as it happened in the US and Europe.
Appealing to the government to withdraw the Acts, they called for talks with farmer organisations and other stakeholders on what measures would really bring equitable and sustainable benefit to the farmers.