To: The Right Hon. Indian Prime Minister Mr.
Narendra Modi
From: Athinarayanan Sanjeevraja
Date: February 15, 2021
RE: India’s Farm Bills
2020
Suggestion:
Hon. Prime Minister, let me start paying my respects to you and through
you to. India’s farm reforms have been advocated for many decades by the Indian
farm economists. In fact, I’m strongly in the favour of the farm reforms when I
was in Indian financial market 2007. The farm laws are very good in intent and
end ecologically unsound practices. Farm law needs to be welcomed as farm laws
are free market laws which allow private players to directly purchase
agriculture products from farmers. In other words, farm law eliminates
middlemen and gives the right to farmers to sell their agriculture products to
whoever they want and they could decide the price but your government proposal
on farm laws which fear that it refrain small farmers have freedom to negotiate
to get a good price with corporate as corporate, in general have always upper
hand in negotiations. Small farmers can’t sue corporate if corporate don’t
honour farm law. It will decimate the small farmers. Perhaps, big farmers have
freedom to negotiate to get a good price with corporate. Moreover, the farmer’s
fear that it will allow corporate to take up monopoly positions and drive down
the prices of agriculture products during bumper crop but pay poor price to
farmers even the yield is low and hoard it to keep the price artificially high.
Small farmers think that corporate farming may lead to the destruction of small
farmers. Thus, farm laws have to deal with the big issues of guaranteeing
minimum support price (MSP), support of small farmers, farmer’s loan
availability and drought. Indeed, leaving small farming to capitalism will wipe
out small farmers. Your government made a fatal mistake of ramming through legislation
without considering guaranteeing minimum support price (MSP), support of small
farmers, farmer’s loan availability, drought and the stakeholders. In addition,
your government failed to explain the merits and demerits of the farm bill to
the farmers. The way the laws were rushed through parliament people think that
you are giving huge power to corporate and make corporate to become market
maker.
Hon. Prime Minister, the farm bills lack the very basic courtesy of
consulting all stakeholders before being passed. If you considered all big
issues and listening to all stakeholders this would not have happened or if
your government could have gotten model legislation passed and let the states
modify them for their special needs this would not have happened. IMHO, your
government verbal guaranteeing minimum support of price (MSP) support for
farmers doesn’t make sense. We cannot talk about the things that are not in the
law. Your government must ensure that written guaranteeing minimum support of
price (MSP) support for all farmers, support of small farmers, farmer’s loan
availability and drought with its inclusion in the law so that the India’s
agriculture-system will overhaul. India needs farm law that will make
reasonable profits for farmers so that they can employ lot of people in
villages or towns. Let me put it very clearly that sometimes guaranteeing
minimum support of price (MSP) would imply that the nation/corporate go
bankrupt. Your government needs to draft farm law very carefully. Minimum
support of price (MSP) must be according to how their customers consume
agriculture products so that farm law would not imply the nation/corporate go
bankrupt. In addition, farmers work with many agricultural products that are
not in their control. Lack of guaranteeing minimum support of price for
agricultural products makes farming gamble and may destroy the farming sector.
But Punjab had guaranteeing minimum support of price (MSP) for wheat and paddy
but not all agricultural products. Farmers were financially more stable in
Punjab. Punjab farmers say that they are better off selling their agriculture
products in Punjab itself. Government or
corporate can choose to procure at minimum support of price for at least major crops
that consumption is significantly high in India. What I observed since my
childhood whenever India has tried to pass any laws or rules, it has never
worked through history because bills were not sent to Parliamentary select
committee for closure examination before they became a law or acts. If bills
are sent to Parliamentary select committee for closer study, we can easily
remove of any loopholes in the bills before they became a law or acts. India
will never achieve its full potential without farm reform.
Hon. Prime Minister, the farm law and the protests need to be addressed.
Failure to respond will result in violent on a global scale. If India wants to
grow economically, farm sector must modernise but farm subsidies given to
Indian farmer’s room to continue to reject modernisation. Farm subsidies makes
farming is uncompetitive but small farmers cannot live without subsidy. Majority
of the farmers are small holders of land. Small farmers take loans on their
holdings to sustain or survive their lives. Media report says that millions of
farmers have committed suicide in India as they could not payback their loans
and they cannot feed their families. Farm reforms being pushed through are in
the farmers’s best interest. Industralised agriculture requires minimum price
supports for sure. Government or corporate has to pay farmers as minimum
support of price (MSP) at least for major crops such as wheat, paddy, pulses
etc. but not all agricultural products. But it should be calculated
scientifically input costs, labour by farmers and prices. Otherwise guaranteeing
minimum support of price (MSP) for all agricultural products would imply that
the nation or corporate go bankrupt. In addition, guaranteeing minimum support
of price (MSP) for major crops may lead to crop specialisation too. Let me put it very clearly, when you are
trying to bring market economies to socialist schemes may bound to create
friction. Thus, farm law needs to be
draft very carefully with certain norms. Because what role does the minimum
support price play? What is the cost of the minimum support price? If farmers
started to cultivate only major crops what would you do? You need to know what farmers
grow. What is the yield of the crops? If the yield of the crops was excess what
would you do? IMHO, it does lead to over production for major crops
particularly big farmers if you guaranteeing minimum support price for major
crops. It would be a hard balancing act to ensure that small farmers are not
taken advantage of. India would most likely come up with a hybrid compromise.
You have some good ideas but the way you implement them is half baked.
Hon. Prime Minister, India needs farm reforms. India has long way to go
in executing farm reforms. IMHO, first it needs to stop subsidising particularly
urban population ranging from free water, seeds, fertiliser, electricity etc.
on the back of its farmers because farm subsidies makes most farming uneconomic
activity. In addition, farm subsidies benefits of large land holder’s not small
farmers. Second, the government should explore its agricultural policies that
raise agricultural productivity by using new technology. In addition, educating
the farmer extensively such as importance of soil sampling and water
conservation, how to purchase quality seed and fertiliser, how to develop
proper irrigation and water storage infrastructure for crops, how to dispose
agricultural waste environment friendly or safely. Third, the government must
extend agricultural credit that towards debt sustainability particularly poor
farmers who exploit private money lenders or weeding out private money lenders
for small farmers. Finally, government need to tax agricultural income on the
same basis as income in the other sectors. IMO, unless the market is restricted
to only internal producers to improve internal efficiency prior to opening up
on a global scale it is foolish to open the agricultural market to market
prices. When you are creating a deregulated market but no minimum support of
price will result in more farmers losing their livelihood and distress sale of
farmlands. In many countries traders who decided the prices for the farmers
produce as well as the price for urban consumers. Farmers do not make money not
just in India but the world because transportation, maintenance of the outlet
stores and cold storage cost far more than the farm production itself. That is
why farmers are mercy of powerful traders who sets huge profit for themselves.
Let farm laws allows farmers to take individual control of their farms and choose
whom to sell to. I am confident that your government to figure out an
honourable solution for farm laws through dialogue with farmers and democratic
process that suits for all farmers. That is the way democracy works. When you
are the leader of a democratic country, you need to act like it. I have been
insisted to many leaders that nationalism, ethnic and religious is a major
threat to democracy. IMO, there is no
better system of government than democracy. India needs to grow both
democratically and economically.
I look forward to seeing the farm laws that reduces red-tape and
middleman vested interests. Your government already has agreed to include MSP
clause. I most humbly request you to remove the anti-stubble burning clause too
so that India’s agricultural system will overhaul in the future.
Thank you very much for your kind Attention Hon. Prime Minister.
With most
amicable regards,
Athinarayanan
Sanjeevraja.
Athinarayanan
Advisory Services Since 2009
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