REPEAL The THREE FARM ACTS
AND
ELECTRICITY BILL 2020
Com. Ashish Mital, General Secretary, AIKMS
Govt’s Arguments for notAccepting Peasant Demandsof Repealing three FarmActs and Electricity Bill 2020 are Deceptive and Untruthful.Its claim of havingaddressed specific problemsin the Acts are bogus. It ispropagating falsehood toclaim that the laws helpPeasants.
Since, June 2020, the peasantry of India has been agitating for repeal of the 3 New Farm Ordinances, passed into Acts in September, and the EB 2020. Despite massive mobilizations in several states and now the indefinite dharna by several lac peasant sat the borders of Delhi, the Govt, through its ministers and experts and BJP leaders are continuously trying to belittle the peasant problems, giving out arguments based on wrong facts, complete misreading of the 3 Acts and deliberately ignoring reference to the clauses being objected to. Their arguments are diversionary and pretentious and their claim that specific aspects have been addressed is bogus. The Govt, as is its character, has also issued an online publicity document “Putting Farmers First”, to show how much Modi Govt has done for peasants. It is aimed at misguiding the country. We attempt here to put the facts straight. We wish to inform, that the Delhi sit in has been preceded by strong mass protests in Punjab and all India protests on August 9,September 25, October 14, November 5 and others, all of which were ignored. Even Punjab govt tried to suppress the movement with arrests, but had to retreat as in the present uprising all sections of people of Punjab. Agriculture continues to constitute an important aspect of the economic life of not only the land owning small, middle and rich peasants, but also affects large number of traders, small industry, workers, intellectuals, professionals. They feel that these laws will destroy the agricultural economic landscape of the country by handing over controls to the Big Indian and Foreign Corporate. While it is being argued by pro Corporate lobbyists that this movement is only of rich farmers, it is motivated by unscrupulous Arhatiyas, it is sponsored by foreign funds and foreign powers, it is organized by opposition parties, is all wrong propaganda. The middle, small and marginal peasants constitute the main force of the agitation.
Claim 1:a) The govt. reforms are aimed at increasing privatecapital,infrastructure anddevelopment to reach villagesand farms and that will benefit peasants. Govt. has allotted Rs. 1 lac crore for helping private investment inware-housing and other infra structure. This will makevillages Atmnirbhar.
b) Peasantry itself had asked for reforms. Now whyoppose the laws?
Ans :a) -The two acts FPTC and Contract Act clearly state thattheir aim is to promote private traders, corporate to establishprivate mandis and engage peasants in contracts. Now Corporate houses will have legal right to do so.- The Laws say that the govt. will promote private companies.Automatically the functioning of govt. mandis, supply offertilizers, seeds, electricity, irrigation will be get de-promoted.Existing Govt sector is easily bribed into dysfunction in order toserve Private and Corporate interests. This has happened to PublicSector Industries, Airlines, Insurance,Telecom Services, HealthCare, Schools, Clean water supply and other civic facilities and isnow happening in Electricity supply, Railways, Banking, etc. Govt -welfare schemes are being largely undermined under the guise ofhanding over toCorporate Social Responsibility, whoseperformanceis zero, but is never questioned. Wherever Corporatehas entered any service, govt sector suffers further losses, while theCorporate makes huge profits.- In all sectors, once govt facility becomes sick and non-functional, its assets are sold to the Corporate. This will happen toagriculture infrastructure also, viz the mandis, the irrigationfacilities and FCI warehouses, amongst others. For last 20 yearsthere have been attempts to privatize irrigation via Self HelpGroups. Water from big Dams built for irrigation is being supplied toindustry and cities. FCI suffers a loan of more than Rs 3 lac crores,because over last 8 years its expenses have not been cleared by thegovt from the food subsidy budget.All its assets will get sold.
b) – The peasants had demandedimprovement in mandi functioning, not ‘mukti’ from mandis. Now these mandis will perish.- Peasants have clearly stated they are opposed to any direct andfurther penetration corporate, MNCs,International Grain Tradersin agriculture because they will raise input costs, depress crop rates,which will be decided through e-NAM and not the Govt. declaredMSP (Section 5b of Contract Act) and will control the entire foodchain. This will lead to higher cost of farming, higher losses, higherdebts and displacement from land. Peasants will be ruined.- The new Acts will legalise entry of Corporate and allow them tocontrol farming process, input supplies, marketing of crops, foodstorage, food processing, processed food industry, etc. This willmake all aspects village life Corporate Nirbhar.
Claim 2:a) Govt has improved mandis. Farmers are beingmade a ‘market force’.
b) These private mandis are only an alternative andthere is no compulsion to sell over there.Farmers havethe option to sell their crop anywhere now. He can takehis crop to any state and sell it. Laws provide freedom ofchoice.
c) Govt has brought parity between APMC andprivate mandis by proposing to allow state govts to taxprivate mandis, register all purchasers and contracts.
d) In several states, like Bihar, there were no APMSmandis, there the farmers have no problem.
Ans: a) – The actual improvements claimed in Mandis areonly computerization and e-NAMs, which hardly bring anymeaningful benefit to common peasants. The reforms sought bypeasants in Mandis werefor better storage, transport,infrastructure, procurement assurance for all crops at MSP, end tocorruption, more democratic functioning of Mandi Samitis, betterInstitutional low interest credit facilities to save them from privatecredit of Arhatiyas, etc.-Govt claim of making farmers a market force cannot benefitthe peasants if they are exposed to big traders and Corporate. Theywill only become victims of Corporate loot. Freedom of choicebetween a goat and a tiger is only for the tiger. APMC mandis werelegally set up to protect them from big traders, who depress cropprices, knowing that the farmer cannot retain his crop and it is hiscompulsion to sell, as he has debts to clear and has to buy inputs forthe next sowing. It was also to prevent excessive differencebetween farm and retail prices, as big traders tend to hoard and doblack marketing.
b) Private mandis will become the only option with a vastnetwork of middlemen in all villages. Peasant never dictate prices,as their only option is the nearest available mandi and the availablebuyers there. They cannot bear the burden of transporting their8crop to another mandi. Can sell anywhere is being stated only to foolthose who may not be aware of the problems of farming,particularly those of urban middle class.
c) These are Central Act give legal freedom to big corporate tocontrol all aspects on agriculture. As per the govt’s latest proposal,the onus of even minor checks on these companies will be fulfilled bythe state govts, who will decide, depending on which parties areruling. If all powers to check are with the state, then why is there aCentral Act?Obviously, the role of Central Govt. and Central Actsisto promote corporate and MNC’s in agriculture, which can easilyundo the checks by state as per need. Once companies gain access, itwill be very difficult for the next govt. to undo it them.
d) Bihar and several states have had no APMC mandis. But nostate has given license to Corporate to establish their privatemandis, which is the main problem with these Acts. Because Punjabhas APMC, farmers there got the MSP rate of Rs 1868 per quintal.In most of UP and Bihar it is selling at Rs 900 to 1200 per quintal totraders.They then sell it to big buyers and Corporate. WhenCorporate Mandis will get established in all states, these prices willbe depressed further.
Claim 3 :Govt document, PFF claims that during Modi’s rulein Gujarat it transformed lives of farmers.
Ans : During Modi period Narmada Dam water, which was9 meant to irrigate agricultural land, was largely diverted for industry and Sabarmati River Water Front. Every year farmers hold big protests for water supply which is cut off before the crops are ready. The real picture of Gujarat’s Modi Model is revealed by several facts including the case of Missing Farmers in 2011 NSSO report which revealed that between 2001 and 2011 3.55 lac farmers had gone missing in Gujarat and there was a massive rise of 17 lac agricultural labour. Studies report that this landlessness increased due to promotion of export driven corporate farming. And worker wages were amongst the lowest in Gujarat, with urban labour getting Rs 144 against a national average of 170 and of rural labour from Rs 113 against a national average of Rs 139. Female labour were paid only Rs 69 per day.
Claim 4 :
a) Farmers will not lose his land. Section 15 onContract Act clearly states that farmer will not lose land.The law can be strengthened.
b) Govt. document, PFF says the laws create ‘betterlives for farmers and jobs for rural youth’, referring toprivate investments for this.
Ans : a) – The contract with the sponsor company does notinclude mortgaging of peasant’s land. But Sec. 9 of Contract Act10provides for peasants to take loans from other ‘debt instruments’,as separate and parallel deals. For making payment to the sponsorcompany for the inputs provided by it to the peasant he will have totake loans and his land will be mortgaged.- Section 14(2)(b) of Contract Act provides that where the“order is against the farmer for recovery of the amount due to theSponsor”, which may be on account of “any advance payment orcost of inputs”, “such amount shall not exceed the actual costincurred by the Sponsor”. So, apart from cost of inputs or advance,the actual costs ‘incurred by the Sponsor’ will be recovered from thefarmer! All recoveries will be made of arrears and land revenue asper Sec. 14(7) of this Act.b) – Land of the peasants can only be saved if the govt gives anunsecured loan which no private company will give. With noprovision for that in the Contract Act, it is likely that a parallelstructure of money lenders serving these companies, but formallyindependent of it, like rise of mahajans during East India Company,will develop. If the peasant cannot get an institutional loan, then theburden on him/her to pay for services provided by the companywill force him to take recourse to borrowing from other sources andin the process have to part with their land. Though this will formallynot bepart of the Contract agreement, but in reality, it will be verymuch essential part of it. Linkage between companies and moneylenders can be multifaceted.11-While creating conditions of peasants losing their land andbecome landless, Govt. says it is ‘creating more avenues for incomegeneration’ and private investments will generate employment.How can there be better lives when land is lost?When companiesinvest in rural area, they do not create infrastructure to helpfarmers to earn. They take over land for real estate, industrial use,in which only handful of jobs are created while thousands lose theirland and livelihood. Most land taken in the name of industries is notdeveloped and remains idle for long.
Claim 5:
a) Govt is claiming that it will give written assurancethat MSP and Govt procurement will continue. It alsoclaims that Modi govt. has already implemented Swaminathan Formula.
b) They also say acceding to demand for MSP willraise food costs.c) They claim that ‘farmers can fix prices forproduce even before growing it’.
Ans : a) – Modi govt. has failed to implement Swaminathanformula C2 cost + 50%. C2 cost is total cost of cultivation (includingfull labour cost, cost of depreciation of equipment, land rent,interest). Modi govt. itself claimed that in 2017 and 2018 the MSPdeclared was A2 + FL + 50%. For many crops the MSP declaredwas even less than this. A2 cost is payments made by the peasant12and Family Labour of 8 days. Modi govt. gave an affidavit inSupreme Court that it cannot pay C2+50% because food cost willrise.- Peasantry’s demand is to increase MSP at C2+50% for allcrops and ensure that all peasants get the MSP rate for their crops.Presently govt. declares MSP for only 23 crops, only few peasantsget its benefit as implementation is only in some areas and is tardy- Govt. spokespersons and experts are claiming that thecountry has excessive food stock, more than 2.5 times than what isrequired. There is no space to store food. It cannot buy so muchwheat, paddy, pulses, etc. Obviously, the govt. does not want to buyand its claim of continuing MSP and procurement is a completehoax.- Govt’s lie is further nailed by its own document, PFF whichsays ‘ensure proper prices for produce’. It does not even say ensure MSP is given.
b) Govt is trying to deny MSP at C2+50% in the name of keeping food costs low for the poor people. Giving C2+50% as MSP will not make food costly if input costs are decreased proportionally. This will afford savings for farmers and agriculture will become sustainable. But govt wants to allow corporate to sell costly inputs and keep the food costs low by depriving peasants of profitable MSP. Thus, at both ends the peasant is squeezed and Corporate profit is secured. The Govt’s logic of not giving MSP is to pit workers against1314peasants and serve the interest of corporate. They will reap the benefit of selling inputs to peasants at high cost as well as buy cheap crops which keep both industrial inputs and wages cost low.c) Monopsony i.e. one buyer and many sellers cannot createcondition for peasantto bargain and fix prices. To say that thepeasant can dictate at the time of the Contract is absurd, becausethe Companies always have a better idea of prices and they fix whatis profitable to them.Moreover, at the time of purchase, there aremany provisions for the company to deny the price fixed in thecontract.
Claim 6 : Govt is increasing farm income and it will double by2022. Input cost have been decreased by this govt.
Ans : Diesel cost has been increased tremendously by Modi govt,even though international prices crude oil have fallen $ 110 perbarrel in 2014 to $ 40-50 per barrel now. Today total tax on dieseland petrol is around 50 rupees, which is about 65% of the price offuel. Ready to sell petrol in India was Rs 24.62 while diesel was Rs26.02 in May end this year. The tax includes central excise duty ofRs 32.98 on petrol which was only Rs 9.20 in November 2014 andRs 31.83 on diesel which was only Rs 3.46 in November 2014. Fuelprices in Pakistan, Bangladesh, Srilanka are cheaper than in India.Diesel effects tilling, irrigating, harvesting and transports costs.Though there is little variation in increase in different fertilizer prices, seeds, insecticides and farm equipment are sold bycompanies at very high costs. It is not regulated by the govt. Everyyear the prices are raised and peasants have to take loans to pay forthese.
Claim: 7:The old system of APMC was brought in when therewas food shortage. Now we are food surplus and we need to change and move ahead.
Ans: Food surplus is a big lie. Every year India is falling in thelist of world hunger index. This year it is 94 out of 107 countries,which is even below Srilanka, Bangladesh and Pakistan. More than68% of deaths in under five children in India are due to malnutrition(Lancet). The most recent National Family Heath Survey releasedtwo days backshows that since 2015-16 percentage of under fivechildren who are stunted remains at 36%, showing no improvementat all. Stunting in under-fives is almost entirely due to poornutrition and reflects status of food availability in society. There isalso no improvement in Infant Mortality Rate during these 5 years,which also reflects status of nutrition and health care.
Claim 8:
a) The new system is revolutionary as it does awaywith middlemen who exploited farmers, chargedcommission to raise prices. Fragmented structure of15markets also led to high cost for consumers anddepressed prices received by farmers.
b) FPOs, Farmer Producer Organizations are arevolution as they empower the farmers.
Ans: a) The farmers complaint was against high interestprivate usurious loans. The solution was cheap inputs and cheaploans. The govt has not done that. It is tricking the people by sayingmiddlemen’s commission charges raised food prices. The differencebetween what a farmer gets and what the consumer buys is at timesin multiples and is mainly dueto high transport costs, illegal taxesextracted by the officials and due to hoarding and black marketing.Commission charges are only a maximum of 8.5%, which isnothing.Farmers always receive very low prices when the market ismonopolized by big buyers, even when there is shortage in themarket. High cost to consumers too is driven by monopoly controlby companies.
b) Farmer Producer Organizations, FPOs were made toempower farmers, but this can happen only if they function asfarmers cooperatives with govt. support. Section 10 of the ContractActs list FPOs and Agriculture Cooperative Societies to function as“aggregator and farm service provider”. That is a middlemenorbichauliya for companies to aggregate crops;to supply inputs andservices (Section 2, Contract Act); to operate private mandis; todetermine “quality, grade and standards for pesticide residue, food16safety standards, good farming practices and labour and socialdevelopment standards” and certify the (crop assayer – Section 4Contract Act); and Section 5 of the FPTC Act provides for FPOs, toown and operate the private mandis and to decide rules andguidelines for fair trade practices, decide mandi charges, etc. Theywill become middlemen of the corporate to exploit farmers, with noGovt control.
Claim 9 :In the Contract Act if market prices go up, farmercan sell outside the contract. If market prices fall thesponsor company will have to give the contracted rate.Central Govt’s document, PFF claims ‘contractors cannotend agreement without full payment’.
Ans : Both claims are total lies and baseless.Sections 4 and 6of Contract Act clearly states that at the time of purchase qualityand rate of crop will be assessed by a ‘assayer’ who can be notified inthe contract is signed or appointed later. Obviously, companies willhave a larger say in such appointment. It will be his job to assess andsettle the payment to be made and will not be the ‘full payment’ asper the rate in the contract.
Claim 10 :Govt document, PFF claims that ‘buyers must pay ontime of face or legal action’.
Ans :- This also is wrong. Section 6(3) of the Contract Act17 allows taking the crop by only by issuing the receipt slip, while themode and manner of payment can be decided by the state govt. Italso grants 30 days time for payments for seed production.FPTC allows buyer to delay the payment by 3 days aftertaking the crop and issuing a receipt. It also allows delay in paymenttill such time as the FPO or Agri Coop receives payment from theperson he further sells the crop to. Section 4 (3) states that “CentralGovernment may prescribe a different procedure of payment byfarmer producer organization or agriculture co-operative society,by whatever name called, linked with the receipt of payment fromthe buyers”. We know how Sugar Mills delay payments for years.
Claim 11 :Govt document, PFF that ‘Farmer can endagreement in any time’
Ans : This claim is a blatant lie and the law is clear. Thepeasant is bound by the contract terms and will be prosecutedunder the Act. Moreover, when the first step in the implementationof the agreement is that the farmer pays the company forinputs,how can he end it?
Claim 12 :These Contracts are only an alternative and if thefarmer chooses he can refuse to enter a contract.
Ans :- The farmers are and will be lured into these contracts18 and will learn about them only when they suffer losses. Entireexperience of contract farming with some commercial crops likeflowers, oranges, potatoes, tomatoes, eucalyptus plantations,etc inPunjab, Gujarat, Karnataka, UP and other states has been of someinitial gains to farmers. Invariably this has led to growth incontracts and invariably farmers have suffered heavily later andmany have lost their land. This happened on a big scale in Punjab. InGujarat, 9 farmers were sued for a Rs 1 crore rupees, for using theFC-5 potato seed, without permission from Pepsico.Secondly, the govt. has been claiming all along that these Actsare creating a new system for benefit of farmers. Question arisesthat while the old inadequate system which failed the farmers willperish, and the new system ‘may not be opted for by the farmer’,then what new system/ opportunity/ have these laws given thefarmer?
Claim 13 :Exports will help farmers. They will become part ofvalue chains.
Ans: Exports will help traders and companies. Tied to Giantvalue chains and exporters, it is these companies who will benefitfrom cheap and assured purchase from the farmer who will becontracted to sell. The farmer will neither sell directly to theconsumer, nor will he/she export. The companies will do that.Moreover, freedom to export and import given to these19 companies means they will source cheapest food from internationalmarkets and refuse to buy Indian farmers’ produce, thus affectingproduction here and jeopardizing food production and security ofthe country.The Govt gives slogan ofAtmaNirbhartaof farmerswill increase, actually meaning thereby that theirdependence on the Govt support will end. Design is tomake Agriculture, Agro Processing and Marketingcompletely Corporate Nirbhar.
Claim 14 :These laws will ‘see India’s agriculture and foodprocessing industry being reformed’. ‘Privateinvestments will pour in across entire cold chain,providing efficient and cheaper resource supply,reducing losses and ensuring better prices for farmers’.
Ans :- While it is correctly said that these laws have beenmade for agro processing industry to grow and for better privateinvestments, this is precisely the fear of farmers. Although the Govtsays it is to provide more opportunities to farmers, page 16 of theGovt document, PFF, confesses who these reforms are meant for -‘Just imagine the kind of new avenues that are going toopen up for agri business with these reforms’.The privateinvestor giants will invest to make profit, not to give better prices topeasants.20- The demand of farmers and rural youth is that govt shouldprovide for cost-based technology and inputs directly to thepeasants or through the Cooperative sector. In Punjab there is a bigdemand that since every peasanthas to own a tractor, othermachinery and pumps, theseshould be supplied by the Govt, tobring down input costs, i.e. providing efficient and cheaperresources. If companies provide resources, they will do so at veryhigh cost, which will ruin the farmers.- Rural transformation does require development of FoodProcessing Industry. The Farmers demand is that the govt mustprovide its infrastructure and structure for marketing and allowpeasants to earn from food processing.Only then can it improvefarmers’ income, not by asking Corporate to invest.
Claim 15 :Govt has removed food items from the EssentialCommodities Act to make farmers benefit from highprices.
Ans :- Food is the most Essential Commodity for survival.Unchecked, traders and companies indulge in unscrupuloushoarding and black marketing, raising cost of food and leading tostarvation and hunger deaths. During last two decades India haswitnessed large number of hunger deaths. Some facts on foodinsufficiency have been noted above.- Having removed food grains from list of Essential Commodities, hoarding, black marketing and other unfair tradepractices will rise. It will benefit only agro processing companies andbig traders. How PM Modi feels farmers will benefit from thisimmoral, anti-people change is not clear. This will harm both thefarmer and the consumer and help only the Corporate and MNCfood giants.- The changes in EC Act allow for 50% hike in annual dry food(cereals, pulses) prices and 100% hike in vegetables and fruits. This is the new written law now.- The EC Act also raises doubts about continuation of theTargeted PDS rules, for which it states ‘for the time being in force’.Winding up of PDS will force more than 75 crore beneficiaries to buyfrom open market controlled by the Corporate.- This logic of the Govt is again to pit farmers against workers.While Food costs will tend to rise high, farmers will not benefit asthey will be bound by contracts and Corporate control over mandis.
Claim 16 :Modi govt has done a lot for farmers in terms ofPMKISAN, PMFBY, rural credit growth, pension schemes,loan waivers, Mnrega funds, etc.
Ans : Each scheme of the Govt has been planned only underpressure of farmers movement. Each has been saddled with largepropaganda, poor performance and large scale corruption.22The fact is that the farmers have still become the mostpowerless citizens in India. They are on the streets today to savetheir land and retention of some old privileges in law, which aregoing to be undermined by these new 3 Farm Laws and EB 2020.The govt must withdraw them. Only then can there be any dialogueon what changes to make which will benefit the farmers.All India Kisan Mazdoor Sabha appeals to you to come out and support the peasants in their struggle against the Corporate andMNCs.Revolutionary Greetings,Central Executive Committee,All India Kisan Mazdoor Sabha ( AIKMS)
Date of Publication 19th Dec 2020
Published by :Central Executive CommitteeAll India Kisan Mazdoor Sabha (AIKMS)(Kirti Kisan Union, Punjab)
Member : All India Kisan Sangharsh Coordination Committee (AIKSCC)
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