Skip to main content

Amended essential commodities Act 'legally' allows hoarders to charge exorbitant prices


By Dr Simi Mehta*

Agriculture being the heart of every civilization, the sector and the lifeline of the sectors -- the farmers -- deserve a much better attention. The new laws formed by the current government have created havoc in the country with farmers marching to the borders of capital city to show their repulsion against the laws.
Various scholars have sided the three laws, saying they are part of the much-awaited reforms in agriculture. But this picture was juxtaposed by some scholars, who have argued that the Central government is privatizing the agriculture. With this background, the South Asian Studies Center at the Impact and Policy Research Institute and Counterview organized a webinar on India’s New Agricultural Laws 2020: Looking Beyond Farmer Concerns.
Prof Utpal K De of the North-Eastern Hill University, Shillong, in his introduction, pointing towards apprehensions towards the three laws, said, farmers can sell their produce anywhere beyond their state, but are not sure how this would ensure implementation of the Minimum Support Price (MSP) regime. For small farmers, without cooperatives, it becomes difficult to find markets in a different state.
Further, he said, one of the laws, the amended Essential Commodities Act, will allow hoarding of goods which will create an opportunity to exploit price variation. Moreover, the new laws have affirmed faith incontract farming. While farmers can avoid some of the market risks, there is fear that the bargaining power of big business would turn disadvantageous for them.
Prof Ranjit Singh Ghuman of the Centre for Research in Rural and Industrial Development (CRRID), Chandigarh, said that, according to the government, the farm bills have nothing to do with MSP and mandis will continue as they are and that the new farm laws are only a means to give greater freedom to farmers.
However, he believed, the laws are sought to be hastily implemented, one reason why they are being termed anti-constitutional. “Though the government claims the reform is urgent, what was the harm in consulting the farmers' representatives before enacting the laws?”, he asked.
Prof Ghuman said, one of the stated objectives of the farm laws is to free the farmers from middlemen. Nevertheless, the government has not guaranteed to prevent creation of a new set of middlemen. New forms of exploitation cannot be tolerated. The government claims that the laws would facilitate private investment in the agricultural and rural infrastructure. It is unclear as to what prevented such investment as of today.
One of the three farm laws, amendment to the Essential Commodities Act, in fact, has legally allowed hoarders to charge exorbitant prices, he said, noting, “The 1943 Bengal famine was not because of the non-availability of grains, rather the culprit was hoarding.”
Reminding participants of the bitter experience of contract farming in Punjab, Prof Ghuman said, small and marginal farmers have not benefited from this venture and 86% of Indian farmers fall under this category. This brings about an unequal playing field and the benefit is skewed. Although there is no compulsion for farmers to engage in contract, the market environment would compel the farmers to do so, he added.
All of these stress on the viability of the aim to increase farmers' income, Prof Ghuman said. There are other ways this could be done, for instance by compiling with the Swaminathan MSP standard. Had this standard been followed, the Punjab farmers would have received from paddy alone Rs 10,771 crore more in a season. But the government has failed to comply. Instance of failing to keep the election promise, the lack of credibility, has been a reason behind the farmers unwilling to buy the words of the government, he added.
Private investors have not been interested in investing in agricultural infrastructure, though they were not prevented to do so
The existing agrarian crisis needs to be understood and addressed, asserted Prof Ghuman. The concern is not only of farmers but of every citizen who consumes farm produce. Food security is integral part of life and it would be threatened if the crisis is not seen through the proper lens. And this cannot be done by simply enforcing a law without dialogue. There is a need for new and better laws that would ensure growth and sustainable development.
Dr Swarna Sadasivam Vepa, visiting professor at the Madras School of Economics, opined that farmers are the most affected and they have the capacity to withstand and resist the government laws for a longer period. However, the silence of the others in comparison with that of Punjab and Haryana, does not imply their acceptance, nor does it mean the Acts are good.
Only an opinion survey conducted in various parts of the country would enable us to get a clear picture of the pros and cons of the laws, Dr Vepa said. Skeptical about what new benefits would proceed from the laws, she added, private investors have not been interested in investing in agricultural infrastructure, though they were not prevented to do so earlier.
Agricultural economist Dr Amerender Reddy said that guaranteeing MSP would not only ensure food security by procuring wheat and paddy from the farmers, but also for other crops. Now only paddy and wheat are being procured, and the cost is about Rs 2 lakh crore. For guaranteeing MSP for all crops, there is a need to establish procurement centres for it and also expand the budget beyond its capacity.
He added, amendment to the Essential Commodities Act would lead to a monopolist situation, as it fails to address how the government should regulate an oligopoist situation which lies beyond the scope of APMCs.
Prof G Sridevi, quoting Dr BR Ambedkar, said, low productivity is not because of small land holding, rather it is because of the insufficient capital investment going into a particular land. Public capital formation in the agriculture sector has declined and private capital formation has helped only certain groups.
Ambedkar propagated that land must be under the control of the state which should ensure equal distribution of the capital and other resources required for the productivity in an equitable manner, said Prof Sridevi, adding, “The three Acts do not discuss the impact on the socially marginalized groups. We require reforms, but reforms must be brought about through discussion and with an element of trust.”
There has been record improvement in the agricultural sector, but it is not sufficient to match the aspirations, Prof Sridevi said. Looking at the way forward, it is important to engage in healthy debate with all the stakeholders before proposing reforms and such debates should be fostered to understand the looming crisis. Structural changes will be imperative like crop insurance, income insurances, cash transfer and public investment in research and extension.
---
*With Impact and Policy Research Institute (IMPRI), New Delhi. Acknowledgement: Gby Atee,  research intern at IMPRI, pursuing bachelors in economics from Ashoka University

Comments

Anonymous said…
The reason that the Shetkari Sanghatna leader is on the mediation panel between farmers and government is that he has been bought via the ability to hoard onions - raise prices - so that traders make a killing. He is happy . To hell with the rest of the farmers.

TRENDING

Adani coalmine delayed? Australian senate fails to pass crucial "reform" amendment for project's financial closure

Adanis' Mundra power plant, controversial in Australia By  A  Representative In what is being described as a new “new hurdle”, the proposed Adani coalmine in the Queensland state of in Australia failed to get the crucial Australian Parliamentary nod, essential for financial closure for one of the biggest coalmining projects in the world. The government lost the Senate vote 35-33, meaning the legislation won't pass until the Senate returns in mid-June.

Paul Newman wasn't just remarkably talented, he was anti-war activist, disdained Hollywood excesses

By Harsh Thakor*  On January 26th of this year, we celebrated the birth centenary of Paul Newman, one of the finest actors of his era. His passing on September 26, 2008, after a prolonged battle with lung cancer, was met with an outpouring of tributes and remembrances from artists across the film industry, all sharing their thoughts and memories of the legendary actor.  

Aurangzeb’s last will recorded by his Maulvi: Allah shouldn't make anyone emperor

By Mohan Guruswamy  Aurangzeb’s grave is a simple slab open to the sky lying along the roadside at Khuldabad near Aurangabad. I once stopped by to marvel at the tomb of an Emperor of India whose empire was as large as Ashoka the Great's. It was only post 1857 when Victoria's domain exceeded this. The epitaph reads: "Az tila o nuqreh gar saazand gumbad aghniyaa! Bar mazaar e ghareebaan gumbad e gardun bas ast." (The rich may well construct domes of gold and silver on their graves. For the poor folks like me, the sky is enough to shelter my grave) The modest tomb of Aurangzeb is perhaps the least recognised legacies of the Mughal Emperor who ruled the land for fifty eventful years. He was not a builder having expended his long tenure in war and conquest. Towards the end of his reign and life, he realised the futility of it all. He wrote: "Allah should not make anyone an emperor. The most unfortunate person is he who becomes one." Aurangzeb’s last will was re...

Health expert Dr Amitav Banerjee on commercialization of healthcare and neglect of natural immunity

By AK Shiburaj  In an interview with me, eminent health expert Dr. Amitav Banerjee has examined the impact of privatization on the healthcare sector, the implications of the World Health Organization (WHO) becoming a commercially driven entity, and the consequences of a pharmaceutical industry prioritizing profit over public health. He argues that an approach ignoring the importance of natural immunity fosters a drug-centric system that undermines the benefits of modern medicine.

Haven't done a good deed, inner soul is cursing me as sinner: Aurangzeb's last 'will'

Counterview Desk The Tomb of Aurangzeb, the last of the strong Mughal emperors, located in Khuldabad, Aurangabad district, Maharashtra, has this epitaph inscribed on it: "Az tila o nuqreh gar saazand gumbad aghniyaa! Bar mazaar e maa ghareebaan gumbad e gardun bas ast" (the rich may well construct domes of gold and silver on their graves. For the poor folks like me, the sky is enough to shelter my grave).

Hyderabad seminar rekindles memories of the spark lit 50 years ago by students

By Harsh Thakor*  History is something we constantly remember and reflect upon, but certain moments and events bring it back to our memory in a special way. For the Telugu people, and Telangana in particular, the memorial seminar held on February 20–21 was a significant occasion to recall the glorious events, transformations, leaders, and heroes of past struggles. Thousands of students rewrote the history of people's movements in Andhra Pradesh, carrying revolutionary zeal and the spirit of self-sacrifice to levels comparable to the Russian and Chinese Revolutions.

Trust, we (from People to PM and President) did not take a Holy Dip in some Holy Shit!

By Dr Mansee Bal Bhargava  I could see two deeply interlinked aspects between human and water in #MahaKumbh2025. Firstly, the HOPE that a ‘holy dip’ in the River Ganga (colloquially referred as dubki and spiritually as ‘Snan’) will cleanse oneself (especially the sins); and secondly, the TRUST that the water is pure to perform the cleansing alias living the hope. Well, I consider hope to be self-dependent while, trust is a multi-party dependent situation. The focus here is on the trust and I shall write later on hope.

Democratic Front Against Operation Green Hunt condemns alleged extrajudicial killings in Chhattisgarh

By Harsh Thakor*  The recent encounter in Indravati National Park, Bijapur district, in which 31 Maoists were killed, has brought the total Maoist casualties in Chhattisgarh this year to 81. Following this incident, Union Home Minister Amit Shah reiterated the government’s objective of eliminating "Left-wing extremism" in India by March 2026. This was the second-largest reported Maoist casualty in a single security operation, following the deaths of 38 Maoists in Narayanpur’s Thulthuli on October 3, 2024.

4th Dalit literature festival to address critical issues affecting Dalits, women, tribals

By A Representative  The 4th Dalit Literature Festival (DLF) has been announced, with the theme "World Peace is Possible Through Dalit Literature."  The festival will take place on February 28th and March 1st, 2025, at Aryabhatta College, University of Delhi (South Campus).  Organized by the Ambedkarvadi Lekhak Sangh (ALS) in collaboration with Aryabhatta College, Dalit Adivasi Shakti Adhikar Manch (DASAM), and other organizations, the DLF aims to highlight the power of Dalit literature in fostering global peace and addressing social injustices.

Vadodara citizens urge authorities to adhere to environmental mandates in Vishwamitri River Rejuvenation Project

By A Representative   A coalition of environmental activists, ecologists, and urban planners in Vadodara has issued an urgent appeal to state and municipal authorities, demanding strict compliance with court-mandated guidelines for the upcoming Vishwamitri River rejuvenation project. Scheduled to commence in March 2025, the initiative aims to mitigate flooding and restore the river, but citizens warn that current plans risk violating National Green Tribunal (NGT) orders and jeopardizing the river’s fragile ecosystem, home to endangered species like crocodiles and Indian Softshell Turtles.