Dr. Syama Prasad Mookerjee Research Foundation

Pro-Farmer Laws: A Mission Who’s Time Has Come!

The Monsoon Session of Parliament 2020 will go down in independent India’s history as a legislative session to be remembered more for what it achieved than what it did not.

It achieved an outstanding record amount of business/work in the shortest period of just ten days (September 14 to 23) before being prematurely declared closed sine die due to a need to maintain safety protocols to keep exposure to the Covid-19 pandemic at bay.

During the session, Parliament passed a total of 25 Bills, including three Bills for liberalising farmers, three for labour reforms and one to ensure greater accountability from foreign-funded non-government organizations (NGOs). This despite predictable and high decibel protests by the opposition.

Of the 25 Bills passed as laws, three farm bills i.e. (1) The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, (2) The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020, and (3) The Essential Commodities (Amendment) Bill, 2020, and a fourth in the shape of The Foreign Contribution (Regulation) Act or FCRA to manage the administrative activities of NGOs more efficiently, dominated parliamentary discourse, and therefore, merit further explanation.

Why did Prime Minister Narender Modi’s government have to necessarily table these four Bills for Parliament to consider making them laws of the land?

Let’s begin with some background to give context to the three farm-related legislations?

As of May 2020, India officially had 16.6 million farmers and 131,000 traders associated with the agriculture sector.

Since Narendra Modi assumed the office of Prime Minister in 2014, improving the lot of farmers and rural families has been a priority. One only has to look at the several initiatives launched by the Modi government to understand their impact on the country’s agricultural sector, which by all accounts is positive.

Some of these include:

. Launch of an Electronic National Agriculture Market (e-NAM) in April 2016 to create a unified national market (through APMCs’) for agricultural commodities. Currently, 1000 agro-centric mandis (markets) are linked to e-NAM. An additional 22,000 mandis are expected to be linked by 2021-22.

. A new Agriculture Export Policy announced in December 2018 aimed at increasing India’s agricultural exports to USD 60 billion by 2022.

. In May 2019, the government-run National Bank for Agriculture and Rural Development (NABARD) announced a Rs.700 crores (US $ 100 million) venture capital fund for equity investment in agriculture and rural-focused start-ups.

. Prime Minister Modi launched the National Animal Disease Control Programme (NADCP) in September 2019 with the aim of eradicating foot and mouth disease (FMD) and Brucellosis (bacterial infection arising from non-pasteurized dairy products) in livestock. In May this year, Rs.13, 343 crores (US $ 1.89 billion) was allocated to the scheme.

. In Budget 2019-20, the government announced the Pradhan Mantri Samman Nidhi Yojana that aims to give a minimum fixed pension of Rs. 3000 (US $ 42.92) to eligible small and marginal farmers, subject to certain exclusion clauses, on attaining the age of 60.

. A Transport and Marketing Assistance (TMA) scheme is in place to provide financial assistance for transport and marketing of agriculture products to boost agriculture exports.

. The Pradhan Mantri Krishi Sinchai Yojana (PMKSY) has been launched with an investment of Rs. 50,000 crores (US $ 7.7 billion) to develop sources of irrigation to save farmers from drought.

. In May 2020, the Animal Husbandry Infrastructure Development Fund with a corpus of Rs. 15,000 crores (US $ 2.13 billion) was announced.

. To ensure agricultural cooperatives function more efficiently, the Modi Government has committed to provide Rs. 2,000 crores (US $ 306.29 million) for digitization of Primary Agricultural Credit Societies (PACS).

. A Rs. 6685 crore scheme for forming 10,000 Farmer Producer Organisations (FPOs)

. An Agriculture Infrastructure Fund (AIF).

Keen to course correct the functioning of Agricultural Produce Market Committees (APMCs) that act as the “middlemen” to the farmer-trader-consumer nexus, the Modi government was convinced it was the right time to reduce official interference and monopolistic practices.

It took a decision to table the three farmer-related Bills with the aim of freeing agricultural trading areas of middlemen, leveling fewer government taxes outside the APMC structure and undoing some of the restrictions on private stockholding of agricultural produce.

Undertaking reform of APMCs’ in India is not a new phenomenon and, in fact, governments of the past two decades have included it in their respective common minimum programmes (CMPs) with the aim of unleashing the full potential of India’s agricultural sector both within the country and globally.

Creation of World-Class Agriculture Ecosystem

The Modi government believes the above-mentioned initiatives along with The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020, and The Essential Commodities (Amendment) Bill, 2020 will create a world-class agriculture ecosystem that will benefit all stakeholders i.e. farmers, consumers, agricultural wholesalers, processors and start-ups.

On the claim by opposition parties that farmers will be denied the benefits of the Minimum Support Price (MSP) system due to the above laws, Prime Minister Modi said on the sidelines of Parliament’s Monsoon session: “These bills will empower farmers to freely trade their produce anywhere. I want to make it clear that these bills are not against the agriculture mandis. They were the need of the present hour and our government has brought this reform for the farmers. Farmers can sell their produce wherever they see more profit.”

New MSP for Rabi Crops Announced

To prove his government’s bonafide, Modi presided over a Cabinet Committee on Economic Affairs (CCEA) meeting that announced higher MSPs for Rabi crops that grow in winter, setting them at 50 percent over costs of cultivation. The new MSP ensures that farmers will at least get a 106 percent return over cost of cultivation for wheat, 65 percent return over costs for barley and 78 percent returns over costs for lentils (masoor) and gram, and 98 percent return over costs for mustard.

Fillip to National Economy

The government believes that the farmer-related laws will give the necessary fillip to a Covid-hit economy and bring it back on the growth track. With agriculture growing by healthy 3.4 percent in the first quarter of fiscal 2020-21, there is a belief in government that the rural economy is the key to overall recovery of the national economy, currently reeling under a shocking 23.9 percent GDP decline.

The new laws aim to legally and institutionally help farmers explore the possibility of selling their produce at higher prices, while retaining the MSP safety net. Allowing private players into the mandi or market system only ensures that APMCs’ don’t have a monopoly and ensures that farmers benefit from better services while being protected by well thought out safeguards.

Reining in Foreign Funded NGOs

NGOs have been developing since the early part of the 20th century and by and large have focused their attention and skills on humanitarian issues, developmental aid and sustainable development. Though as institutions they are useful, but that they have a dark side too cannot be ignored or pushed under the carpet.

With the passage of time, NGOs have grown in huge numbers. According to one estimate, there are 10 million NGOs worldwide, with a third of them (3.3. million) located in India, i.e. approximately one NGO for every 400 people.

According to a recent Organisation for Economic Co-operation and Development (OECD) study, “20 percent of all NGOs worldwide concentrate 80 to 90 percent of their resources available for NGOs.” This, the OECD says leads to a furious competition for donations, putting their stated humanitarian mindset or mission on the backburner.

At times, this has led to questions being raised about their legitimacy and effectiveness in developing countries like India.

The Modi government’s proposal to amend the Foreign Contribution (Regulation) Act (FCRA) through the Foreign Contribution (Regulation) Amendment Bill, 2020 must be seen in the context of both history and its intent.

Historically, India has always been a difficult place for NGOs to operate, with the government often stepping in to curb their activities.

While NGOs in India see themselves as a vital cog of civil society, governments, both past and current, have harboured deep reservations and suspicions about their functioning, especially at the grassroots level.

It, therefore, isn’t a surprise that the Modi government is initiating a fresh amendment of the Foreign Contribution (Regulation) Act (FCRA).

India’s disproportionate number of (global) NGOs and this sector’s lack of transparency and accountability clearly demands better monitoring and reform.

What this Foreign Contribution (Regulation) Amendment Bill, 2020 (now Law) is proposing to do is to make the functioning of NGOs more transparent, both administratively and financially.

It is widely acknowledged that a majority of NGOs have been functioning with regulatory frameworks that are at best thin, if not non-existent. This government’s aim is to curb excesses.

There is, therefore, nothing wrong in feeling the need for making NGOs more transparent about their sources of funding, whether foreign or domestic.

The proposed Bill aims is to prevent public servants from receiving foreign funding, reduce the NGO foreign funding component to meet administrative costs from 50 to 20 percent, prohibit transfer of foreign funds to any association or person, make Aadhaar a mandatory identification document for all key functionaries of NGOs or associations eligible to receive foreign donations.

NGOs are a necessary component of civil society, but it is the government’s view that they need to be reined in from time to time.

(The writer is a New Delhi-based senior editor/journalist)

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