January 17, 2021
Why the CPI(M) opposes the Farm Laws and calls on all Parties to Unitedly Support the Kisan Struggle

THE CPI(M) supports the historic, courageous and determined struggles of the kisans of India against the three Farm Laws, braving brutal repression of the BJP government and despite the loss of over 60 precious lives of kisans in the protest at the borders of Delhi. It was the first political party to strongly oppose the ordinances when they were issued in June 2020.

The Farm Laws and the manner in which the BJP has pushed them through, have wide implications which impact on a host of issues such as democratic rights, encroachment on rights of states, weakening India’s position at the WTO, the critical issue of food security, the giving up of responsibility of governments to control prices and of course, setting up the legal architecture to advance corporate control of agriculture.

In the face of the farmers' protests, a large number of opposition parties, even those who have been supporting the BJP in parliament, have demonstrated their discomfort with the present adamant and arrogant attitude of the central government. How did the BJP respond? It refused to hold the winter session of parliament. Why? Because it would have faced a united opposition demand to repeal the laws. In September, when Covid cases had crossed one lakh cases a day, there was no problem in convening parliament to convert the anti-kisan ordinances into law. However, in December, when the number of fresh cases had come down to around 30,000 a day, the Coronavirus became the excuse for not holding the session of the parliament. This reflects the utter contempt the BJP has for parliament. This has been clear in every step of the process.

This was preceded in the previous session of parliament by the refusal to refer the bills to the standing committee denying consultation with stakeholders including farmers and their organisations; in the Rajya Sabha since the majority of members supported a resolution for reference to a select committee, government subverted every rule by disallowing a vote and banned protesting MPs including two MPs of the CPI(M) from the ‘house’ and rammed the bills through. The point is that the opposition to the bills by the Left Parties and many other parties was evident in the discussions in parliament which the government refused to heed. The issues being raised by the farmers today are the same which had been raised by many in parliament.

It is important to recall these facts today. Having refused to consult farmers, having ridden roughshod over rights of members of parliament, the central government is now entertaining its puppet farmers organisations’ who are being lined up to support the bills so as to show division among farmers. They have been propped up to become a party in the supreme court case in the name of a consortium of farmers organisations’. Most of their leaders are known sangh supporters. At the same time, BJP leaders are being encouraged to make the most vicious attacks against the farmers and also the opposition parties, finding novel words of abuse every day. It shows the highly authoritarian methods being used by the BJP and the central government.

There is another shameful angle to the BJP strategy to disrupt the struggle. There has been a widespread appreciation of the conduct of the protesters, the culture of langars, the sharing and reaching out to commuters to minimise inconvenience. This has won acclaim across the country. The BJP first tried to sow division in the name of religion by branding the protesters as Khalistanis. When that strategy miserably failed, the BJP under the leadership of the Haryana chief minister is trying to divide the farmers of Punjab and Haryana on the issue of sharing water and the SYL(Satluj Yamuna Link) canal. The farmers have replied with a greater mobilisation and a stronger unity. But this government has no compunctions in using such despicable and anti-national strategies.

Agriculture is listed in the state list of the Seventh Schedule of the Constitution. However, the Modi government has reinterpreted an entry in the concurrent list to usurp the powers of the state governments to make laws related to agriculture. Until recently, the central government was pushing so-called agricultural reforms through the “Model Acts” which is left to state governments to adopt and implement. In 2017 and in 2018 the government brought two such “Model Acts”: The Agriculture Produce and Livestock Marketing, (Promotion and Facilitation) Act 2017 and The Model Agriculture Produce and Livestock Contract Farming and Services (Promotion & Facilitation) Act, 2018 which contain many provisions which are now in the central laws. In November 2019, the parliament was informed that as far as the APLM Act is concerned only Arunachal Pradesh had adopted the Model APLM Act fully, while Uttar Pradesh, Chhattisgarh and Punjab had adopted selected provisions of the Act. In May this year, the Agriculture Ministry Secretary wrote to States to bring ordinances to implement the Model Acts. Madhya Pradesh and Gujarat dutifully made amendments in their laws on the basis of the Model Act. The Model Act on contract farming was adopted by one government — the Tamil Nadu government in 2019.

If state governments want to implement these reforms, they can do so through the adoption of these model acts in their respective state assemblies with whatever modifications they want. However, to coerce the states to adopt these model acts, the central government got the Fifteenth Finance Commission to introduce performance-based grants which the states could avail only if they passed the APLM Act and the Model Land Leasing Act. The central government then went a step further in usurping the rights of the states by enacting the national laws to impose its pro-corporate agenda on the entire country in one go. These central laws also gave much more benefits to corporates compared to even the model acts.

The farmers were not consulted, the state governments were not consulted, it would seem it is only the agribusiness corporates like Adani and Ambani who were consulted since it is their interests the government is pushing these laws. It is an open secret how Adani is being helped in the acquisition of land and bank loans at concessional rates. This is why the farmers have specifically mentioned the benefits for Adani and Ambani.

Interests of the global MNCs are also involved in this conundrum. Developed capitalist countries led by the US have been demanding access to agricultural production and markets in developing countries including India. Through the ‘agriculture agreement’ of which India is a signatory they have been targeting India’s system of minimum support prices, public stockholding of foodgrains essential for the public distribution system. While maintaining the facade of withstanding such pressures in the WTO, the domestic policies, including these farm laws of the Modi government, actually serve the interests of the multinational agri-businesses. Once the laws are passed there will be equal access for multinational companies like Cargill as there will be for the Adanis and Ambanis.

The three laws are related to (1) agricultural marketing: The Farmers' Produce Trade and Commerce (Promotion and Facilitation Act), (2) contract farming: The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act), and (3) about stocking of food commodities: The Essential Commodities (Amendment) Act.

(1) The main purpose of this law of opening up markets to corporates is to retreat from government responsibility of public procurement of foodgrains. Through the agricultural marketing act, the government wants to entirely deregulate the market and give concessions to private players to set up their own markets without paying any taxes or fees, giving anybody and everybody the “right” to buy directly from the farmers without any minimum price fixed. State governments have no rights to levy taxes or fees on these private markets while those in the regulated mandis will continue to pay fees. This will obviously mean that the very existence of regulated mandis, where public procurement takes place at the minimum support prices, will get weakened and they will finally disappear.

In 2006, Bihar had abolished the APMCs. The result? Bihar farmers, having to sell their produce to private traders, on average get one third less than the MSP for paddy. In MP, there have already been multiple cases of farmers being cheated in transactions under the new act with no redress.

The government’s suggestion now is that it could allow state governments to register traders and if state governments wished they could charge a fee. This aspect is already there in the Model Act 2017. What then is the requirement for a central law?

The main concern of the farmers is that private players will take over the market and, in the absence of a legal guarantee of a minimum support price, farmers will be at the mercy of these big traders.

At present there are about 2,477 principal regulated markets based on geography (the APMCs) and 4,843 sub-market yards regulated by the respective APMCs in India. The Swaminathan Commission had suggested setting up of more markets in a range of up to 80 sq km compared to the distances of around 500 sq km today. This is a “reform” which would help farmers if the government would set up more regulated markets. But the government wants to cut down on procurement and refuses to set up more regulated markets where procurement can take place.

(2) The Contract Farming Act has opened agriculture production to corporate control through the system of contract farming. It provides a completely deregulated environment in which big agribusiness companies will be able to coerce farmers to enter into contracts for the supply of agricultural produce on terms that may be unclear and unfavourable to farmers. The act does not have any mechanism whatsoever for ensuring that farmers get fair and remunerative prices, that the terms of contracts are fair and unambiguous, or to ensure that the contract enforcement is not selectively used to exploit farmers.

Both the Agricultural Marketing Act and the Contract Farming Act specify mechanisms for settlement of disputes between farmers and traders/companies which are designed to keep farmers in a very weak position while critical powers have been given to the bureaucracy. Elected local bodies and gram sabhas have no role in the dispute settlement and organisations of farmers have no space for providing support to farmers. The law also bars farmers from approaching the civil courts in case of disputes.

On this aspect the response of the government is that the right to go to court can be included. However, the government is not prepared to stand guarantor to support the kisan. The experience of potato growers in Punjab who entered into contracts with MNCs was terrible, and they were exploited. Can an apple farmer in Himachal Pradesh fight Adani Fresh by spending the rest of his life in court if the agreement is violated? The so-called amendment suggested by the government does not guarantee any protection for the farmer. The protection can only be provided by a government guarantee and a minimum support price.

(3) The Essential Commodities (Amendment) Act basically legalises hoarding by considerably weakening provisions for regulation of the amount of stocks of food commodities that can be held. Big traders and companies can use these provisions and, staying within the law, hoard food commodities to create artificial shortage and a rise in prices. Such volatility of consumer prices would hurt food security of all sections of people. It is no coincidence that Adani companies are the fastest growing in setting up infrastructure for cold storages, silos etc., using concessional bank loans and helped by the BJP governments to acquire land. The most recent is the change of land use in Haryana for the building of silos for the Adani group as well as the acquisition of 150 acres of land at low prices from farmers in Panipat district. The government has made no suggestions on the opposition of kisans to this law.

Claim: Procurement of foodgrains at MSP will not be affected. The government is prepared to give a written assurance. Government has implemented Swaminathan Commission recommendations on MSP.
Truth: When even a guarantee underwritten by law on the share of GST compensation to the states was blatantly violated by the central government, what worth is a written assurance? If the government is truly sincere about MSP guarantee, what prevents it from bringing it into the law? This is the reform law all farmers are demanding. But leave alone legal guarantee of procurement at MSP, the government is lying about its MSP claim that it is in accordance with the Swaminathan Commission recommendations of 50 per cent over the cost of production.

There are different types of cost of production. The A2 cost is just paid out cost. The A2+FL cost is the sum of A2 and the imputed value of family labour. The C2 cost is the total cost of production, which includes the paid out cost, imputed value of family labour, the interest on the value of owned capital assets and the imputed rental value of owned land. The Swaminathan Commission had suggested that MSP should be fixed at 50 per cent higher than the C2 cost of production. However, the Modi government has fixed MSPs at 50 per cent higher than the A2+FL cost of production. If MSPs were fixed at 50 per cent higher than the C2 cost of production, the MSPs would have been Rs 400 to 500 per quintal higher than at present. This is the approximate average loss suffered by the farmers for every quintal sale of their produce. So much for Modi’s claim.

Claim: The laws will not weaken the existing system of APMC mandis but will only provide alternative opportunities to farmers, there is no compulsion on farmers, they will still be able to sell their produce at MSP to government agencies.
Truth: The whole purpose of the law is to handover marketing to the private sector. If the trade shifts, as it is bound to, outside the mandis because of tax concessions, then investment in upkeep, maintenance and improvement of infrastructure of regulated mandis will stop. In the implementation of neo-liberal policies, we have seen how the most profitable public sector companies in numerous sectors have been starved of funds or have been drained of their own funds and have been made sick. This is what will happen to the APMCs. In addition, in the absence of a guaranteed price, for the farmers, the “alternative opportunities” will be at the mercy of the corporates.  Even today regulated markets are very few in most states. A vast majority of farmers today are forced to sell their produce at prices significantly lower than the MSP. Even though there is an MSP for 23 agricultural commodities, the government procures only rice and wheat, and that too in just in a few states, and most other farmers are forced to sell their produce at low prices.

Claim: Farmers’ incomes will double
Truth: This is the most absurd claim. There is no provision in the new laws to ensure that the farmers get a “higher” price or even the MSP. The law on contract farming categorically states that the government will play no role in fixation of price. With increasing monopoly control of large corporations, farmers in distress will be compelled to agree to whatever price is offered by companies.

Claim: The new laws protect farmers against the threat of alienation from their lands.
Truth: The Contract Farming Act has a clause which bars companies from including provisions for purchase/lease of land from farmers in contract farming agreement. Such clauses are toothless and cannot protect farmers against the threat of alienation from land. Economic distress is the most important cause of the alienation of farmers from their lands. If farmers are cheated by companies, selling the land will be the only option available to them since land is their most important asset. The only protection against loss of land can be that a minimum return from agriculture is ensured. This can only happen if a remunerative MSP is a mandatory requirement of all contract farming agreements which is glaringly absent in the law.

Claim: Opening agricultural marketing to the private sector would bring investment to agriculture. The private sector will bring new seeds and technology to farmers.
Truth: The government should provide new varieties of seeds and technology to farmers. ICAR and agricultural universities have been established for this purpose. But they are being defunded. In fact, agricultural research and extension services have been completely downgraded by the Modi government. Private companies are after super-profits, and high prices of seeds, pesticides, herbicides and other agricultural inputs provided by private companies is a major cause of agrarian distress. In fact, the government is threatening another version of a Seeds Bill as a second reform.

There is strong complementarity between public and private investment. If the government invests in regulated markets, this will attract private investment in storage, transport and other supply chain facilities. In absence of basic infrastructure, very little private investment takes place.

A major feature of the post-1991 reform process has been increasing private corporate involvement in Indian agriculture. In the initial phases of liberalisation, the multinational companies expanded their control over the production and supply of farm inputs, such as seeds, fertilisers and pesticides. The present Farm Acts are intended to further expand the corporate hold of companies into the sphere of agricultural marketing. The three Farm Acts will weaken the mandis, shut down the FCI and end procurement. These would imply that all the agricultural surplus that passes through the FCI and the mandis will be available for the multinational companies to handle. Thus, corporate firms would gradually increase their control of the entire value chain and ultimately dominate it.
It is clear that the new farm laws enacted by the government are fundamentally flawed. By enacting these laws, the central government has undermined powers of the states to enact laws related to agriculture and to make executive interventions in the interests of people. The laws have been created solely with the objective of facilitating corporate penetration in agriculture and include innumerable provisions that are against the interests of farmers and people at large. Given this, it is impossible to amend these laws and make them serve the interests of farmers. The CPI(M) is clear that repealing the laws is the only option available and wholeheartedly supports the demands of farmers for a complete withdrawal of these laws.

( Prepared by the Central agit- prop committee)