Friday, the 19th November 2021, the day when Prime Minister Narendra Modi announced his decision to repeal the three historical Farm Laws shall be remembered by millions of underprivileged Indian farmers as the darkest day in their life. They will feel cheated, abandoned and thrown under the bus by a daring Prime Minister, who had shown the determination to take on the powerful nexus of large farmers, politically controlled APMCs and the powerful Punjab-Haryana based lobby of ‘Adhatiyas” in league with a corruption ridden FCI.
Does it mean that the interest of small farmers will be sacrificed for ever? Will they ever have access to a market mechanism that empowers them to legitimately get a fair share of consumer’s rupee spent on value added agricultural commodities? The present system, unless challenged with a credible alternative will continue to exploit the vulnerable section of the farming community forever.
On the other hand does the impasse that resulted in PM’s announcement to repeal the farm laws present other opportunities to create a credible alternative that is both legal, financially independent and one that has the potential to empower millions of small farmers? Does it present a new opportunity for a public-private partnership between a government agency and the farmers?
The way ahead:
And he wouldn’t need the nod of parliament to implement this alternative.
In my view, yes. And at the center of this opportunity are three positives that the central government can capitalise on right away.
First: the Food Corporation of India. The organisation that is mandated to procure food grains to create buffer stock on behalf of the government. It has both the people and infrastructure to swing into action to procure food grains, Oilseeds and pulses- main ingredients of the food basket that are primarily grown by small farmers all over the country.
Second: the retail network under Public Distribution System (PDS). Linked with the FCI, it should provide small farmers direct access to millions of consumers in far away markets.
Third: A separate Ministry of Cooperation that can focus on creating an institutional structure that empowers the farmers through ownership of the processing and marketing infrastructure.
There already exists a model in form of ‘Dairy Cooperatives’, spearheaded by Amul that has been in operation for 76 years. Herein the entire value chain is owned and managed by the farmers themselves. The ministry of cooperation can suitably adopt the model of dairy cooperatives to ensure that the command of the institutions always remains in the hands of dedicated farmer leaders and does not get hijacked by self serving political interests.
How to capitalise on the three positives:
What the central government can do is to break up the FCI into 5 independent subsidiaries with a predetermined area of operation and for procurement. Each of these subsidiaries should have its storage, processing, packaging and marketing infrastructure. This access should be given either by transfer of infrastructure owned by the state or centrally owned infrastructure which can be upgraded in a short time. There should be a time bound blue print to convert these subsidiaries into “Joint Ventures” with the ‘Farmers’ Cooperative’ of the operational area and increase the share holding of the farmers to 49%, ideally within 5 years.
A multidisciplinary team constituted under each subsidiary should be trained to procure agricultural produce directly from farmer members at the MSP for fair average quality of produce with the provision of bonuses/ penalties as per prescribed standards. The primary mandate of this team should be to motivate the farmers to join the cooperative and educate them on how the system will operate. Farmers must be told at the outset that they, as part owners of the Joint venture, will receive at the end of the financial year a price difference/ bonus in proportion to the value of the produce they contribute.
A large share of the produce processed and packed in consumer packs by the joint venture should be marketed through the network of PDS outlets so that the consumers receive quality assured pure products at reasonable prices that are not subject to frequent price fluctuations.
That way, farmers will have the ownership of a value chain while a lot of under-utilised infrastructure in the public sector will be put to a useful purpose. The Prime Minister, however will be faced with only one question- how to identify and motivate young farmer leaders who are willing to put their own political ambitions behind in the larger interest of small underprivileged farmers and the Indian agriculture.