New Central Ordinance can dismantle MSP regime

It can legalise existing exploitative practices in backward areas, opine experts

Published - June 08, 2020 08:28 pm IST - ADILABAD

Small cotton farmers with their produce at a cotton purchase centre in Adilabad district.

Small cotton farmers with their produce at a cotton purchase centre in Adilabad district.

The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance 2020 and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 brought in by the Union government on June 3, will result in dismantling of the protective mechanism available to farmers against exploitation, according to experts at ground level who are going by information available so far.

The Ordinances which ease down restrictions on participation by traders at every stage of agriculture will render the minimum support price (MSP) regime irrelevant as well as legalise the existing exploitative practices in backward areas like Adilabad and Kumram Bheem Asifabad district, part of former composite Adilabad.

The first Ordinance says farmers need not go to respective agriculture market yards for selling their produce and can sell it to anyone anywhere outside the market yard. The rules for private trade have also been eased in that anyone who is a valid PAN card holder can purchase agriculture produce directly from farmers.

“There are about 4 lakh small and marginal farmers, all cotton farmers, who also comprise the section which is exploited by private moneylenders and financiers operating illegally as per relevant law. Any fall in market price of the produce has government agencies purchasing the produce at MSP — which also ensures that farmers get relatively higher price even if the money lender recovers his dues by lifting the harvest at the field level itself,” opined senior farmer leader of the ruling Telangana Rashtra Samithi and chairman of Jainad mandal Primary Agriculture Cooperative Society B. Goverdhan Reddy.

“There is also the danger of more and more financiers entering the field as there will be no supervision of authorities. I therefore appeal to the State government to disallow operation of the Ordinances,” he added.

The second Ordinance which relates to contract farming, is equally anti-farmer in that it allows processors, exporters and others to enter into an agreement with farmers for contract farming, the price of the produce being mutually agreed upon. The rules of the Ordinance do offer sufficient protection to farmers against price exploitation but do not seem to ensure what mechanism for price fixation will be on offer to farmers.

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