Interview with the President of the Krantikari Kisan Union (Punjab) about the anti-farmer ordinances passed by the Central Government

Mazdoor Ekta Lehar spoke to the President of the Krantikari Kisan Union (Punjab) Dr. Darshan Pal regarding the ordinances on agriculture recently promulgated by the central government.  We are publishing excerpts the interview.

MEL: Recently the central government promulgated two ordinances related to the farmers. According to these ordinances, any private company can buy agriculture produce from a farmer in any part of the country and sell it without going through the agriculture markets set up by the government. The farmers are being told that they will get remunerative prices for their produce. In your opinion what would be the impact of these ordinances on the farmers?

Dr. Darshan Pal: Through these ordinances, the government is carrying out liberalization and privatization of the agriculture sector. The ultimate aim of these ordinances is to hand over the farmers to the big private corporations through liberalization.

Farmers need two things for their crops – one is remunerative prices, and other is an assured market. Both these are closely linked to each other and one cannot exist without the other.

Today the agricultural markets are being regulated by the state institutions. In Punjab there is one market board, one market committee and one network. They have huge yards, where there are shops for farm equipment, pesticides, fertilizers, etc. There are large number of workers whose entire livelihood is dependent on these mandis. The transporters in large numbers get work through these mandis.

On the other hand, there are government institutions spread across the country, like the Food Corporation of India (FCI). There are agencies like Punjab Agro Programme, Markfed, and others. These agencies monitor the quality of the agriculture produce. The farm produce get purchased at minimum support prices (MSP) set by the government. The farmers take their produce to these mandis. Here the produce is cleaned and processed. The inspector from government agencies announces the MSP set by the government. The quality of produce is inspected against the standards set by the government. After this the produce is taken to government or private godowns.

8.5 percent tax is levied on the price of the produce which is paid not by the farmer but the agency which had bought the produce. Whether it is government or private agency, they have to pay the tax. Of the 8.5 percent 3 percent is market fees, 3 percent goes to rural development fund, and remaining 2.5 percent is the commission of the agent. The amount going to the rural development fund goes to building and maintaining link roads to the rural areas, ensuring water for irrigation and other facilities. Although there is corruption in all this, most of the fund goes into development of villages.

Now let us look at the areas where there is no MSP. In such areas, private agencies purchase the produce from the farmers.  They decide the price and quality of the produce arbitrarily.

Government set up the Shanta Kumar Committee which had declared that they will dismantle the FCI. Now the government is moving in the direction of destroying it.

As a result of these ordinances there will be problems at two levels.

Firstly, the farmers will be ruined. For example if there was no MSP in Punjab they would be selling their produce to private agencies at lower prices. Today the traders purchase grains from Bihar and Uttar Pradesh and sell it in Punjab where they can sell at MSP.

Second, in absence of the APMC the workers dependent on these mandis will lose their source of livelihood. Those linked to state mandis will also lose job. This will eliminate the revenue to the government.

Under the APMC act, the mandi system exists only in Punjab, Haryana, and to some extent in Uttar Pradesh. This benefits only 6-7 percent of all the farmers. We are demanding that this mandi system should be extended across the entire country. This way the state agencies can be made accountable for ensuring the security of livelihood of all the farmers. In case of wheat and paddy crop in Punjab, these agencies start their preparation for purchasing the crops two months before the season starts. It is same as a runner who is going to participate in a marathon race. Traders, political leaders, and government agencies start making announcements that the purchase will start in October.

How will a farmer market his produce? How will he transport it from one place to the other? I have not seen this in my entire life. The real aim of this ordinance is for the government to give up its responsibility of purchasing the produce at MSP.

The produce is never sold at MSP. For example the MSP for maize was set at Rs.1800 per quintal. However the farmers in Punjab were forced to sell their produce at Rs.600-700 or Rs.1000 rupees per quintal. Farmers’ organisations in the paddy, wheat, cotton growing regions have been waging struggle demanding MSP. Till date no farmer has been able to sell their wheat or maize above the MSP. Electronic agriculture marketing and industry are all very attractive to look at. But the Indian farmers cannot go in that direction today. If the farmers do not get MSP for their produce they will certainly be ruined.

Farmers’ incomes are reducing and the payment too is received only after six months. They are under enormous debt and are forced to commit suicide. Farmers and agriculture are in urgent need of state intervention. In this condition farmers cannot face the market challenge.

Hence the farmers need both – remunerative prices and market. This should be under state control.

MEL: According to the second ordinance the big agriculture corporations would now be able to enter into contract farming with farmers in any part of the country. Will the farmers benefit from contract farming?

Dr. Darshan Pal: Government is giving the slogan of contract farming. Under this, the big agriculture corporations will enter into contract with the farmers promising them agriculture implements, capital and purchase the produce at an agreed price. This is also called futures trading.

Besides this after some time these companies will come to the farmers and say that they will take their land on rent. We will give you a fixed salary and give you a share in the produce. Eventually the farmers will be the losers in this game. This ordinance is aimed at mortgaging and eventually selling the land, labour and self-esteem of the farmers into the hands of big agriculture companies like Adani, Ambani, Cargil, Monsanto, and Segenta.

It is the responsibility of the state to ensure livelihood of the farmers and their families. Government has brought this ordinance to abdicate this responsibility.

There is only one way forward for the farmers to save themselves and that is to get united.

MEL: To promote private companies in agriculture the government talks about the problems and issues in the mandi system of APMC.  What kinds of problems are farmers facing in the government mandis?

Dr. Darshan Pal: Yes there are problem in mandi system. In Punjab and Haryana there is one agency that offers loans. We call them commission agents or sahukaar in local parlance. There is no law governing the arrangement between the farmer and the commission agent.

Now the banks have started to give loans to the farmers. Twelve years ago there was total outstanding loan of Rs. 35 crore of the farmers in Punjab. Of this 65 percent was to commission agents. The farmers waged struggle as a result of which the government set up a high-level committee. The committee made some recommendations regarding the loans and the suicides. The outcome was a proposal for the banks to advance loan to the farmers.

Most of the suicides take place with the outstanding loan to commission agents. In our understanding the farmers can escape from clutches of the commission agents if the banks offer them loan at low interest.

The second problem in the mandi system in Punjab is with the government procurement agencies exploiting the famers. Quality control is the most painful aspect. Whether it is change in weather, unseasonal rains, increase in moisture in the maize crop, or destruction of crops, the inspector and government agencies harass the farmers. The commission agent will say that the farmer will have to deliver 101 kg instead of 100 kg. This happened recently in three districts with wheat crop – Patiala, Mohali, and Fatehgarh Sahib, where there was unseasonal rain, when the wheat was just ripening. As a result of this the wheat grain became small. The grains also changed colour. The FCI declared that they will pay Rs. 5 to Rs. 28 less per quintal for the crop. This came as a shock to the farmers. After six months of tireless efforts, the farmer goes to the mandi with his crop, expecting that he will get a remunerative price. We had to wage struggle, but despite that we had to sell the crop at Rs. 5 less per quintal.

In states other than Haryana and Punjab, the purchase of agriculture produce is done outside the mandi system. The traders exploit the farmers. When the farmers takes his crop to the market expecting to sell at Rs.2000 per quintal, he gets only Rs.1200 per quintal. He is exploited in these mandis.

When the farmers in Punjab sell their crops they are not paid directly, but into the account of the agent. The agent does not pay the amount to the farmers and keeps giving the excuse that the amount has not yet been deposited into his account. The farmer is made to wait endlessly. He is literally made to beg for his money. The farmers are harassed economically and socially when they go to the mandi. Sometime he is harassed by the corrupt police officer. The purchasing agency records the weight lower than the actual weight. Eventually when the purchase season starts, the farmers are made to wait at the mandi for days together to sell their crop.

Despite all these problems, the Kisan Union is of the opinion that if the farmers are assured of purchase through the APMC, then it is better to deal with the government agencies than with the private operators. It is well known what the farmers in Madhya Pradesh, Rajasthan, Bihar, Uttar Pradesh Odisha and West Bengal get from the private market!

MEL: What is your opinion about the struggle for loan waiver to the farmers?

Dr. Darshan Pal: We are demanding that the farmers must be freed from the debt.

A government commission has recommended that the farmers should get 50% more over the cost of production. In our understanding the cost of inputs to the production are never calculated correctly. This goes in favour of the private traders.

The prime cause for the indebtedness of the farmers is that the state does not fulfill its responsibility. All the laws favour the lending agencies and not the farmers.

90 percent of those who are declared defaulter farmers have already paid off the principal and the interest if that is calculated for 15 years at the interest rate of 4 percent per annum. They are still caught in the debt trap because the interest rate is very high and they have to pay at compound rate.

The cost of agriculture inputs like seeds, fertilizer, and tractors etc, has been rising. Following the green revolution, the output prices and farmer’s net income had risen but gradually with rising input costs the farmer’s cost of production has been gradually going up. The production has not increased because the sown area cannot be expanded. One the one side are the increasing cost of inputs and on the other is the falling output price. The difference between them is gradually reducing. The farmers has been sinking into the quicksand of debt and forced to commit suicide.

The farmers who grow cash crops are severely indebted. The farmers in Tamilnadu, Maharashtra, Telangana, Punjab, and Karnataka borrow from the market for producing their crop, and they are the ones in deep debt. Over and above this natural calamities causes them further losses.

It is the duty of the state to save and protect the farmers and agriculture. The farmers should be given one-time loan waiver and a law should be enacted on payment of loan. What should be the loan amount and the interest rate? The farmers should be granted loan at low interest rates. He should be able to take care of his children’s education, family health and other social obligations and easily pay back the loan after selling his produce six months later.

MEL: Along with the assured remunerative price for the agriculture produce, it is important to have an efficient public distribution system, so that all people get adequate quantity of grains and other agriculture produce of right quality at affordable prices. What is your opinion on this?

Dr. Darshan Pal: Through the ordinance of Essential Commodities (amendment) Act-2020 the government has removed grains and vegetables from this list of essential items. This will result in hoarding of these items in the godowns by the big agriculture companies who will then sell at high prices as they please.

In our country there are millions of people who are in dire need of public distribution system. For example during the lockdown millions of workers working in other states were forced to return to their native villages. The main reason for this is that the state did not assure them the availability of essential items like food grains, pulses, sugar, oil, etc.

In our society historically there are sections of people who are not in a position to earn two square meals a day. There are many who do not have source of livelihood and go hungry. Those who are daily wage earners, they are not able to fulfill their minimum daily needs.  Unemployment is on the rise. In such conditions there is an urgent need for a public distribution system.

MEL: Please tell us about the demonstration and actions organised by the farmers in Punjab on 27 July, and what is the way forward?

Dr. Darshan Pal: We have a joint action forum of more than 250 organisation from across the country. Most of these are farmers’ organisation. 10 organisations from Punjab are part of this joint forum. Besides this there are three other organisations. When these ordinances were issued there was a joint meeting in Punjab against them. This meeting discussed the issues of the ordinances related to agriculture, electricity act-2020, rise in the prices of petrol and diesel. It also discussed the imprisonment and harassment of intellectuals, social-cultural activists, artists, and actors. Protesting against the action of the government, the 13 organisations burnt an effigy of Modi government in every village, took out flag marches, held meetings and rallies 20th-26th July. 27th July was the final day. 13 organisations drove 10000 tractors with 3 persons on each tractor. These tractors were driven to the offices and residences of MPs and office bearers of the BJP and Akali dal. This is how we organised protests.

On 9th August the farmers across the country shall organise struggle around nine demands. The key demands are repeal of the ordinance on agriculture and electricity act-2020, implementation of Swaminathan Committee recommendations and one-time loan waiver to the farmers.

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