The government’s annual Economic Survey strongly defended new farm laws, saying they are beneficial for small and marginal farmers.
“The three agricultural reform legislations are designed and intended primarily for the benefit of small and marginal farmers which constitute around 85 per cent of the total number of farmers and are the biggest sufferer of the regressive APMC regulated market regime,” it said.
The pre-budget document was tabled by Finance Minister Nirmala Sitharaman in Lok Sabha.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 The Essential Commodities(Amendment) Act, 2020 — are the three key legislations passed by Parliament in September 2020.
The newly introduced farm laws herald a new era of market freedom which can go a long way in the improvement of farmer welfare in India, the Survey added.
The Survey defended the farm laws in the wake of farmers’ agitation at Delhi borders seeking their withdrawal raising a bogey that they are pro-corporate and could weaken government regulated mandis.
The Survey further said that APMC regulations have indeed resulted in a number of inefficiencies and consequent loss to the farmers.
“The presence of multiple intermediaries between the farmers and the final consumers has led to low realisation by farmers. Further, a large range of taxes and cesses levied by APMCs cuts into farmers’ price realisation while only a small proportion is ploughed back into the development of mandi infrastructure. Poor infrastructure at the mandis compounds the problem of price realisation for the farmers,” it said.
According to the survey, the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020 will empower farmers in their engagement with processors, wholesalers, aggregators, large retailers, exporters and will provide a level playing field.
It will transfer the risk of market unpredictability from the farmer to the sponsor and also enable the farmer to access modern technology and better inputs. Farmers have been provided adequate protection as sale, lease or mortgage of farmers’ land is totally prohibited and farmers’ land is also protected against any recovery.
The farmers will have full power in the contract to fix a sale price of their choice for the produce. They will receive payment within a maximum of 3 days.
As part of this law, 10,000 Farmer Producer Organizations are being formed throughout the country. These FPOs will bring together small farmers and work to ensure remunerative pricing for farm produce. After signing the contract, farmers will not have to seek out traders as the purchasing consumer will need to take the produce directly from the farm.
The Essential Commodities (Amendment) Act 2020 removes commodities like cereals, pulses, oilseeds, edible oils, onion and potatoes from the list of essential commodities. This aims to remove fears in private investors from excessive regulatory interference in their business operations.
The freedom to produce, hold, move, distribute and supply will lead to harnessing of economies of scale and will attract private sector/foreign direct investment into the agriculture sector. The legislation will help drive up investment in cold storages and modernisation of the food supply chain, the survey added.
It also said the government recently increased the MSPs for all mandated kharif and rabi crops for 2020-21season at the level of 1.5 times of the cost of production.
The Survey said India’s agricultural sector showed its resilience amid the adversities of COVID-19 induced lockdowns.
The Agriculture and Allied activities clocked a growth of 3.4 per cent at constant prices during 2020-21(first advance estimate), it said.
The Survey in the Agriculture year 2019-20, as per Fourth Advance Estimates, total food grain production in the country is estimated at record 296.65 million tonnes which is higher by 11.44 million tonnes than the production of food grain of 285.21 million tonnes achieved during 2018-19.
It also noted that the agricultural credit flow target for the year 2019-20 was fixed at Rs 13.50 lakh crore. However, the government achieved Rs 13.92 lakh crore.
The agriculture credit flow target for 2020-21 has been fixed at Rs 15,00,000 crores and till 30 November, 2020 a sum of Rs 9,73,517.80 crores was disbursed, the Survey said.
It also noted that the Agriculture Infrastructure Fund announced as a part of Atma Nirbhar Bharat Abhiyan would further boost credit flow to the agriculture sector.
The Survey said an amount of Rs 18000 crore has been deposited directly in the bank account of 9 crore farmer families of the country in December 2020 in the 7th installment of financial benefit under the PM-KISAN scheme.
