Worried about ordinance : The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020

 In this session, I am trying to analyze the ordinal: The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 passed by Lok Sabha on 17th September and passed by Rajyasabh on 20th September. What are the key issues related to this ordinal? Let's discuss this. 

1) The definition of Farmers discussed in the ordinal: Ordinal defines farmer as 

Where NSS 70th round defines agriculture household as : 

An agricultural household for this survey was defined as a household receiving some value of produce more than Rs.3000/- from agricultural activities (e.g., cultivation of field crops, horticultural crops, fodder crops, plantation, animal husbandry, poultry, fishery, piggery, bee-keeping, vermiculture, sericulture etc.) and having at least one member selfemployed in agriculture either in the principal status or in subsidiary status during last 365 days. 

In 59th round definition was: 

‘Situation Assessment Survey of Farmers’, conducted in NSS 59th Round, defined ‘farmer’ as a person who operates some land (owned or taken on lease or otherwise possessed) and is engaged in agricultural activities in broad sense of the term e.g. cultivation of field crops, horticultural crops, plantation, animal husbandry, poultry, fishery, piggery, bee-keeping, vermiculture, sericulture, etc., on that land during last 365 days preceding the date of survey. If any member of a household was a farmer, the household was treated as a farmer household for the purpose of the survey.

The important point highlighted in 70th round is that land possession should not be a criteria to define the farmer. 

But the way ordinal is defining the "farmer" is again highlighting the importance of the land possession. "Farmer is a person engaged in production of farming produce (like food stuffs, cattle fodders, cotton seeds where land is required for production) by self or hired labour. This creates doubts regardling the role of agriculture labour (with land and without landless) in agriculture production post-agreement period.  Agricultural agreement is defined as: 

In this agreement sponsor, farmers or third party are mentioned. Will  agriculture labour (with land and without landless) have a say in the overall process of agricultural development? What about the share of those who are engaged in agricultural activities but don't fall in the definition of farmers? It is expected that post-agreement farming will bring the capital-intensive methods. The agricultural labors will suffer a lot if there are no non-farming opportunities (Reserve migration due to pandemic has created more troubles). 

Contract farming will throw "labor" out of the agricultural process with this definition. 

2) What about FPO (Farmers Producer Organization)? 

A Producer Organisation (PO) is a legal entity formed by primary producers, viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen. The Farmers Producer Organization is one type of PO where the members are farmers. 

But this ordinal mentions that FPO can play role of aggregator in the agreement process. 

FPO will act as intermediaries between a farmer or group of farmers and a sponsor. FPO has played an important role in organizing the farmers for production as well as marketing but post-agreement, the FPO which is formed by the "Primary Producer" will be downgraded to the intermediaries. This will deuninize the producer (farmers) and also limits the role of producer over marketing. 

Another important point is that: NSS 70th round finds that around 59.64% of farmers are engaged with local private players for exchanging their "farm produce". The post-agreement period will witness teh destruction of local market (which includes both private as well as public players). And if this system of agreement is implemented on large scale, then we will witness the oliogospony where very few sponsors (buyers) will be there in market.  

3) Issues regarding the dispute settlement. 

Ordinal suggests that: 

The sub-divisional authority will play an important role. But our experience suggests that these authorities themselves have disputes with farmers. How can they play a role in dispute settlement? 

4) Ownership:

In an absolute system, it seems no threat to the ownership. But the coeexistence of the system of agreement and informal sector lending can give a complete different picture. Will government provide support if farmers (specially small farmers) fail to award the contract? 

This system will widen the disparity among the "agricultural households" will create the insecurities and rather increase the uncertainty for farmers (generally "contracts" reduce the uncertainty but in this case it will increase the uncertainty.