Corporatisation of the Indian Agricultural Sector

The new agricultural laws allow the entry of corporate sector in the vast unorganised agricultural sector, through the back door.

Asad Mirza
Asad Mirza

By Asad Mirza | New Delhi

The farmers agitation has spilled on to the highways in some north Indian states. Agitating farmers from Punjab and Haryana may soon be joined byfarmers from Rajasthan, Madhya Pradesh and Uttar Pradesh. Opposition parties across India are criticising the new agricultural laws. The Rajya Sabha witnessed unruly scenes when the two contentious bills related to farming sector were passed in the house, last week. Some opposition members led by the TMC climbed on to the chairman’s podium as the government pushed for the passage of two contentious farm bills.

Perhaps the most awkward thing for the ruling party in Delhi has been the resignation of  the Union food processing industries minister from the cabinet. She resigned in protest because she claimed that the new lawsare anti-farmers. The laws have been criticsed by most of the opposition parties and even by Swadeshi Jagran Manch, an outfit of the RSS, which though appreciates the bill, yet says that they need certain changes to ensure the welfare of the farmers.

The Farmers Bills

Three months ago when Parliament was not in session, the Government of India issued three ordinances. Normally ordinances are issued only as an emergency law, and they have to be converted into proper legislation as soon as the Parliament reconvenes. These three ordinances were about agriculture and farming, and were descibed asin favour of the farmers in the spirit of ‘reforms’, i.e. removing shackles from the agricultural sector. Now all three ordinances have been passed in the Lok Sabha and have become laws.

The government in its defence says that the three new laws, viz. (i)The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill 2020, (ii) The Essential Commodities (Amendment) Bill 2020 and (iii) Farmers (Empowerment and Protection) Agreement of Price Assurance & Farm Services Bill 2020, takes due care of the agricultural sector to ensure safety of farmers’ interests and they’ll eradicate the middlemen from the markets, will createa national market, high intimidation cost mandis will go, will allow farmers to sell their produce to anybody anywhere and will remove all barries in inter and intra-state agricultural produce sale. It will help to end the monoploy of traders or middlemen, yield better returns to farmers and increases their income, farm produce can move freely from surplus to deficit regions and ultimately the consumer will get better, fresh and cheaper products due to better managed storage facilities.

Defending the agriculture bills, Union Agriculture Minister Narendra Singh Tomar said that Bills will bring revolutionary changes in the lives of farmers and strengthen agricultural economy. Tomar said that the interests of farmers are protected under the leadership of PM Modi.

He said that the electronic marketing platform – e-NAM trading system – will also continue in the mandis at a much larger scale, which will result in greater transparency and time savings. He also clarified that farmers will have the power to fix the sale price of his choice and receive payments within three days. Farmer Producer Organisations (FPOs) will bring together small farmers and work to ensure remunerative pricing for farmers. Tomar said that after signing contract, farmer will not need traders to sell because the purchasing consumer will pick up the produce directly from the farm.

Opposition to the bills

One would imagine that farmers would welcome any reforms that gives them more freedom and income. But this ‘granting of freedom’ has met with a huge backlash across the country, what is the reason for that?

Both the opposition parties and and some farmer groups have raised questions about pricing of their produce under contract farming. They have also raised concerns over foreseeable disputes with big companies. Congress leader P Chidambaram while slamming the Central government, said that it challenges the pillars of the food security system of the country.  He further said that the ‘gravest flaw’ in the ordinances is that they do not stipulate that the price which the farmer will get ‘shall not be less than the MSP’, as the government has done away with fixing the MSP.In the real sense it means the entry of corporate business into the agricultural sector of India throgh the back door.

Every year the government has a massive procurement programme to buy large quantities of wheat and rice and other crops at the MSP. If the mandi and the Agricultural Produce Marketing Committee (APMC)system is diluted, or dismantled, then there is no guarantee that the farmer will get assured minimum price. Only when government procurement is done, that too through the mandi, does the farmer will get full price.

Farmers are agitating because they fear that diluting the mandi and APMC system would mean eventual closing down the MSP system. And FEPAPAFS-2020 will allow corporates to make an entry into the Indian agricultural sector which may ultimately result into the death of small  and medium scale farmers.

The Indian agriculture sector is notoriously shackled by all kinds of archaic laws, which control price, quantity and storage. Yet, inspite of its unorganised nature, the agricultural sector has been the backbone of the Indian economy and has always supported it to bounce back even at times when other sectors perform poorly.

The future

In fact, out of the three bills, the one, of which the Indian farmer is most scared of is the Farmers (Empowerment and Protection) Agreement of Price Assurance & Farm Services Bill 2020, as it relates to contract farming. The India farmer who has already had to bear the burden of GM seeds, which led him to take large loans to survive and as a result of non-payment of those loans was eventually led to suicide, is now threatened by the corporate farming as he can see the writing on the wall clearly. He can also see that the middlemen system, which the government aims to end, is not going to happen, as the present middlemen will eventually start serving the interests of the corporates at the farmer’s cost.

The uneducatedIndian farmers understand very well that they’ll be induced by guaranteed price by the corporate players, seeds and pesticides but ultimately one day he might even lose rights to his own land. Such corporate malpractices have been seen by farmers in Punjab, already, where they were induced by multinational companies to grow potato and tomatoes instead of wheat and rice, and which ultimately led to the land getting completely barren and depletion of the water table drastically in the state.

The day does not seem far off, when a clutch of corporate houses will control the farming sector and will eventually set the price and availability of different crops and food items in the country, and like several other sectors the consumers and economy will be totally dependent on them, and ultimately the small and medium scale farmers may completely perish.

In fact, the passage of these agricultural bills, just like the education and labour related laws forces us to wonder how with a minority in the Rajya Sabha for the NDA, these bills are passed. Perhaps the stand taken by some of the allies of the NDA before the passage are just for the optics and in reality they ensure that the bills are passed.

Secondly, we should be worried a lot more about all these plethora of bills being adopted as laws, as they all are steps towards making India a ‘Hindu Rashtra’. A closer study of The Third Way, a book by Dattopant Thengadi, who was the founer of RSS’s trade, labour and farmers wings, presents a Hindu way of managing the economy, polity and the society, in the light of Hindu scriptures; the Vedas, theSmritis and the Shastras.


Asad Mirza is a commentator based in New Delhi. He was also associated with BBC Urdu Service and Khaleej Times of Dubai. He writes on Muslims, educational, international affairs, interfaith and current affairs.he can be contacted on Email:


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