Winners and Losers of farmers’ protests and possible outcomes

By:

Vijay SARDANA

The main demands are:

1. Repeal Farm Acts

2. Mandatory MSP under the law

Ground reality and the Concern is:

1. There is not enough tax collection to meet the farmers demand of the farmers. Total collection of India is just Rs. 16.5 lakh crores. Farmers demand will cost India more than Rs. 17 lakh crores to support all crops, livestock farmers and fisheries sector at mandatory MSP. Under Law, MSP cannot be restricted to only a few selected crops, logically all poor farmers of all farm produce should be covered. 

2. When MSP is higher than the world market, productivity and quality are poor, imports will flood the Indian market, Exports will dry up. Every year the increase in MSP will increase more imports. (Please check prices in the world market on the internet and compare with MSP).

3. India has surplus wheat, rice and sugar. We do not want more wheat, rice and sugar. The protesting farmers demand more money for their crops which are not required. Many states are now self-sufficient to meet their own demand. Till date, taxpayers money is used to buy what is not required to please some vested political interest. On the other hand, we are importing what is required by citizens like edible oils. 70% of edible oil is imported. 

Who will be the gainer, if laws are repealed?

The repeal will only benefit the protesting commission agents and their well-wishers. The only winner will be the commission agents who do not want farmers to get the option to sell anywhere else without charging a commission.

The other segment of those who will benefit will be marginalised political parties and vested interests groups, those who are losing their existence.

Who will be the loser?

• Small farmers because they will have no alternative except going back to commission agents and loan sharks. They will exploit more because now they know there will not be any reform and no alternate buyer in the market.

• The government cannot buy everything because there are no funds to buy. Total liability will be more than the total tax collection in India.  

• It will be cheaper to import in all coastal states than to buy from Indian farmers and bear the cost of commission, corruption and taxes and other overheads.

• If the private sector refuses to buy at mandatory MSP, by making trade associations like commission agents are doing now and they prefer to import cheaper and better quality for urban centres, poor farmers will be left to feed poor consumers in rural India. Will it help the farmers or the state government?

• More and more farmers will demand MSP because they are also part of India. Every year demand to increase MSP will be there. This means every year an additional burden to 1.0 to 2.0 lakh crores on the taxpayer for the material which is not required. 

The possible options before the Union Government:

1. Increase the taxes by two to three times to meet the demand of the farmers by making MSP mandatory under the law. There will not be any investment in future in India due to the high taxation. 

2. Even industrial goods will come from international markets because it will be cheaper to import the manufacture in India by paying high taxes.

3. Exports will suffer because there are cheaper options in the world market.

4. Other agro-industries will suffer because imported products like poultry dairy, textile, sugar, rubber, species, etc will start coming into India. The demand for local agriculture produce will further suffer. This will further suppress prices. Farmers will suffer more.

5. Now, these same commission agents will not buy and will never give MSP to farmers because there will be suppressed prices. This will ensure farmers are fully trapped and now cannot demand reforms because they oppose it tooth and nail. No regional political party can bring reforms and no national party will have the courage to take the risk to make any changes in the agri-law. The suffering of farmers will continue and this will lead to social unrest in many places in India. No one should blame the government for that. The blame should go to people supporting illogical protest in the name of farmers. 

6. Law and order situation will further deteriorate. People who are opposing reforms will vanish from the scene by becoming ministers or may not exist in the world with time and will not come forward to help any farmer in crisis. (Learn from Anna Hazare movement, where are the leader of the movement).

The way forward for a better future:

• Farmers must learn to produce as per market need, not for FCI because there cannot be enough money for procurement of all crops. 

• Review all subsidies because many are going to undeserving large and rich farmers. 

• Only BPL farmers should be entitled to sell to FCI.

• All farmers with four-wheelers, AC and affording luxury options should NOT be entitled to the subsidy. They are capable and can start post-harvest management, processing and export activities and support small farmers and give them the right prices, which they are demanding from the taxpayers’ money from the government.

• Even if they quit agriculture in protest, it should be welcomed because small farmers will get a bigger space to produce more and prosper. 

• Agriculture universities and departments must be made accountable to improve productivity and quality so that Indian agriculture can become globally competitive. 

• MSP as the concept has lost its utility in a globalised economy. We have to work on alternate approaches to ensure viability for small farmers. The shortfall can be bridged by Direct Bank Transfer (DBT).

• Food adulteration must be controlled so that farmers get the correct price for their crop. Mustard adulteration with cheaper synthetic oil, mixing of maltodextrin in milk powder, fructose syrup in honey, yellow peas in gram flour are some of the examples.

• Corruption in food quality departments leading to adulteration and farmers are suffering due to suppressed prices. 

Worst case scenario:

Central government should leave it to the states to decide their destiny and future of their farmers. 

The Union government may ask states to adopt these reforms and link development funds from taxpayers money to the reforms. The States which are not keen for reforms should be asked to create their own development resources by raising taxes or cutting down the expenditures. Taxpayers money cannot be used to enrich commission agents and vested interests at the cost of small farmers.

After that, buyers will decide from where to buy the agro-produce. They will prefer mandies without tax and without commission. FCI should be asked to use the taxpayers’ money to buy from BPL cardholder poor farmers only. This will ensure justice, equity and development in the required areas of India. 

Today, India is at a turning point, You have to express your views opening. Silent majority is a disaster for democracy. If you are silent when the country’s and small farmers’ future is at stake and few vested interests are hijacking the countries development agenda, you and your kids have no right to demand justice, opportunities and development in future. Your silence was supporting the lawlessness, illogical demands and pushing this country to anarchy. 

Now, the ball is in your court as a concerned citizen - rise to the occasion and decide in which direction the country should go.