Agri reforms: Robust safeguards needed
The Tamil Nadu government’s Ordinance on Tuesday, giving farmers the freedom to choose where they want to sell their produce within the state, couldn’t have been more timely. It was inked a day before the Union Cabinet approved the Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, that has further pushed the geographical boundaries of agricultural enterprise. Now, the farmers’ market yard is the whole country.
Before this, they were bound by the provisions of the Tamil Nadu Agricultural Produce Marketing (Regulation) Act, 1987, and could sell their produce only within the perimeters prescribed for them. The tweaked Act has created a level playing field for farmers to freely access any recognised private market, warehouse and cold storage facility, and directly sell their produce to traders within the state. They can negotiate for a contract with anyone and fix the price at the beginning of the season, thereby transferring the risk of market and season unpredictability to an agro-based corporate sector firm or private trader.
The state’s Ordinance was intended to alleviate the distress caused by the invisible virus attack, and recently, the more visible swarm of locust-like grasshoppers that have attacked crops in the Delta region. The new Central Ordinance, aimed at reaching the ‘One India, One Agriculture Market’ goal, has added to this. These come close on the heels of Telangana’s decision to regulate farming from the current kharif season, with the government advising farmers on what to cultivate to avoid a production glut.
The reforms come at a time when agriculture is the only sector still performing in an economy heading towards recession. However, there needs to be a good safety net to ensure farmers do not become vulnerable to corporate exploitation. The Central Ordinance includes safeguards for dispute resolution. In the event of crop failure, farmers will have to repay the advance they received from the buyer. But where will they have the money to repay the advance if it is already spent and there is no yield? Will it push them further into debt? It remains to be seen how the safety net works in practice.