Why shy away from corporates while serving farmers’ interest?


India’s left liberal elites with little knowledge of ground realities are at it again—this time in the name of farm laws. In what was a complete flop, Bharat Bandh call, the nation witnessed a desperate Opposition rallying up its misinformation campaign to incite farmers and pressurise the government into withdrawing farmer-friendly policies. The farm laws introduced by PM Narendra Modi aren’t a knee-jerk reaction but a long time in the offing. 

The nation’s economy was liberalised, privatised and globalised in 1991 under the leadership of PV Narasimha Rao. The Indian economy has reaped rich dividends in the form of a growing economy, thriving middle class and reducing poverty for the last few decades. Private ownership has fuelled enterprising minds to deliver on the Indian potential. The left liberals despite the changing course of the country haven’t yet shed the socialist leanings which characterised slow growth during much of license raj. The suspicion of corporate houses or private parties is whipped up in a bid to incite farmers which they are failing badly at. It’s true that early alignment with USSR and historical cynicism with East India Company has led to an Indian psyche which is genuinely suspicious of corporate interests. However the world has changed and Indians have moved on from the weak state-controlled factors of production to a comfort level with private enterprises evident from the fact that it’s private banks which are amongst the most important bankers in the nation today. Right from banking systems to insurance to even defence, the greater participation of private companies has only improved competitiveness. Unlike the other sectors which saw massive growth and competitiveness, Indian Agriculture sector hasn’t been a big time beneficiary of the GDP growth story. Agriculture growth has been trailing National growth while labour is slowly moving from Agrarian and allied activities to Industrial activities.

Despite the high proportion of Indian population relying on Agriculture, the corporatisation of the agricultural sector hasn’t been possible due to small and fragmented land holdings in much of the agrarian population. Private companies on the other hand have struggled with procuring due to lack of uniformity in quality which farmers were ill equipped to provide. Lack of irrigation facilities and overreliance on monsoons led to further unpredictability which further deterred direct procurements by Corporates who need steady supply of raw materials. The Cooperative movement like Amul and Sahyadri solved much of the problems at local level and boast of local success but isn’t enough for a vast country like India. In the absence of organised private interests, the exposure of Indian farmers to corporate names has largely been confined to buying of tractors and equipment which are manufactured by private enterprises. Private sector enjoys tremendous goodwill and confidence of the farming community due to such exposure while modernising while still being largely immune to corporate influence in buying/selling. It’s untrue that the same farming community which buys tractors of a Mahindra brand or fertilizers of Deepak fertilizer brand name would be so wary of selling his produce to a Tata or D-Mart. The Indian farmers are much smarter than the Opposition realises while attempting to incite them of corporates.

Even before the current laws, a number of States including Bihar and Maharashtra had laws curbing the compulsion to sell in APMCs. Bihar where the opposition is putting up a spirited act at violence doesn’t have an APMC for more than a decade now ever since APMC act was scrapped in 2006. Companies like ITC met 30% of certain crop requirements through direct route even before the current laws. The laws will only accelerate the preference for direct purchase route sidelining the middle men who have long enjoyed monopolistic hold over the market. While the hue and cry is made under the pretext of working for farmers, the farmers themselves are adequately aware that such profit-seeking interests are merely firing over their shoulders.

The laws brought by PM Modi will unshackle the entire agriculture-to-food-processing-to-retailing value-chain and give farmers the choice to sell their produce in any market across the country. The middlemen fear and rightly so that their dominance is over. Under the new central law on inter-state trade, farmers can sell their produce anywhere within and outside the state of their residence, without being hamstrung by the Agriculture Produce Marketing Committee (APMC) mandis.  The law on contract farming allows farmers to get a share of post-contract price surge which is again farmer friendly without anything in it for middlemen. The third one is the amended Essential Commodities Act which eases stock holding restrictions on commodities which has historically proved counterproductive in restricting price fluctuation while merely making it a lopsided market. PM Modi by withstanding the attempt at opposition pressure stands with the farmers while opposition struggles to ramp up and spread more misinformation nudged by middlemen who can no longer exploit farmers. Why should the government shy away from enabling corporate roles to further serve the interests of farmers? PM Modi stood by his word and stood with the farmers. The question is how long will the destructive politics of opposition parties continue?

Shweta Shalini is BJP spokesperson and Executive Director at Maharashtra Village Social Transformation Foundation (VSTF), a section 8 company of the government of Maharashtra.