Its farmer first for Modi sarkar: Busting the myths around farm laws point by point

New Delhi, Dec 09: The farmers have been protesting for nearly two weeks now against the new farm laws. The opposition parties have joined the farmers in support.

There are many claims that the farmers would in the long run lose out due to these farm laws. However, MyGov has cleared the confusion that has been prevailing and also decided to bust the myths around the farm laws.

What won't happen:

• MSP will not go away
• APMC Mandis will not be closed
• Farmer's land will not be taken away by anyone for any reason
• Buyer cannot make any changes to farmer's land
• Buyers cannot cheat farmers and contractors cannot end agreement without full payment.

What will happen:

• MSP system will continue. After passing farm bills, government announced an MSP increase
• APMC Mandis will continue to work
• Farmers can sell in APMC Mandis or outside- It is their choice
• Farmers can fix prices for produce even before growing it
• Buyers mist pay on time or face legal action
• Farmers can end agreements anytime they wish
• More infrastructure and investment will come
• Better lives for farmers and jobs for rural youth

Modi's government's strong commitment to MSPs and Mandis:

• Farm bills do not affect MSP system. MSP will continue
• Immediately after passing farm bills, government increased MSPs in September 2020
• Not a single APMC Mandi has closed after the new farm bills were passed
• APMC Mandis will continue to function
• Farmers can sell in Mandis or outside- It is their choice
• Modi government gave higher MSP than earlier government and also bought more from farmers than earlier government.

MSP Payment to farmers for paddy and wheat:

• Under UPA between 2009-2014 it was Rs 3.74 lakh crore
• Under NDA between 2014-2019 it was Rs 8 lakh crore

Procurement of pulses at MSP:

• Under UPA between 2009-2014 it was 1.52 LMT
• Under NDA between 2014-2019 it was 112.28 LMT

The need for pro-farmer reforms:

Fragmented Markets: Each market functioned as a separate entity, hampering intra and interstate trade.

Insufficient Markets: At the same time, there were not enough markets to deal with growing produce.

Market Fees & Charges: Taxes, various commissions raised the cost of final product, while reducing returns to farmers.

Inadequate Infrastructure: Despite market taxes, infrastructure in markets remained underdeveloped and not in tune with modern supply chains.

Post-Harvest Losses: This inadequate infrastructure led to high post-harvest losses, estimated at Rs 90,000 crore in 2014.

Restriction in Licensing: Entry as a licensed agent was restricted, discouraging competition and encouraging cartelisation.

High Intermediation Costs: The fragmented system led to high intermediation costs, raising costs for consumers, while depressing prices received by farmers.

Information Asymmetry: Farmers often lacked market information, which traders & commission agents withheld from farmers.

Inadequate Credit Facilities: Informal credit channels still dominated formal channels.

How the farmers are already benefiting from pro-farmer reforms:

• Freedom to sell anywhere, to anyone
• Mandis continue to function
• Farmers are being made a market force

Before reforms:

• Can sell notified farm produce only in APMC Mandi, monopoly of few
• cartels of traders could keep prices artificially low.
• Once produce brought to mandi, farmer has to accept whatever price is offered
• Mandi fee, commission, and other charges borne by producers and consumers
• Large price spread and long chain of intermediaries
• No opportunity for farm youth to trade agri commodities
• Cannot directly sell to consumers
• Freedom to sell fruits and vegetables outside of APMC mandi existed in some states
• Small land holders did not have scale and bargaining power in input and output markets
• Contract farming restricted only to some pockets
• Farmers not part of value chains
• Exports getting uncompetitive due to long chain of intermediaries and poor logistics

After reforms:

• Freedom of choice to sell in APMC mandi or choose any other seller
• Multiple options to sell
• Better price realisation through competition
• Can bargain for price even at door-step
• No fee, no commission
• Large savings to benefit producers and consumers
• Higher share of farmer in consumer's payment
• Minimum or no intermediary
• Rural farm youth will get opportunity to trade and run supply chain.
• Can sell directly to anyone and earn higher price
• This freedom is now extended to all agri produce and all over the country
• Empowered to access modern input, services and protection against price risk
• Farmer Producer Organisations help small farmers' organise for better bargaining power
• Contract farming now nationally enabled and on terms favourable to farmers
• Farmers will now be partners in value chain
• Export competitiveness will increase and benefit farmers