As the farmers’ protest continues to intensify in and around the national capital, at least 10 economists of various universities have written to Union Minister for Agriculture Narendra Singh Tomar, demanding the withdrawal of the contentious farm laws.

The economists have alleged that the farm laws are based on false assumptions about farmers concerns.

‘We do believe that improvements and changes are required in the agricultural marketing system for the benefit of millions of small farmers, but the reforms brought by these Acts do not serve that purpose. They are based on wrong assumptions and claims about why farmers are unable to get remunerative prices, about farmers not having the freedom to sell wherever they like under the previously existing laws, and about regulated markets not being in the farmers’ interests. We are putting forward five crucial reasons as to why these three Acts, brought in as a package by the government, are fundamentally harmful in their implications for the small farmers of India,’ the letter reads.

The economists listed some reasons to support their demand for repealing the laws, The Indian Express reported.

‘Making a central act that undermines the role of state government in regulating agricultural markets is a flawed approach. State government machinery is much more accessible and accountable to farmers, right down to the village level, and hence state regulation of markets is more appropriate than bringing a large part of commodity sales and trade under the ambit of the central government Act, by establishing ‘trade areas’,’ the economists alleged.

According to the Ministry of Agriculture in July 2019, over 20 states had amended their APMC Acts to permit private mandis, e-trading, electronic payments, e-NAM, etc., with all of them under the purview of the state government.

‘For any new mechanisms to succeed, there has to be a buy-in from all the stakeholders in the market including farmers, traders, commission agents, and this process can be handled with more sensitivity and responsiveness to local realities by the state government, rather than through a drastic and blanket legislative change at the central level,’ the letter added.

‘A key problem with the Acts is the creation of a practically unregulated market in the ‘trade area’ side by side with a regulated market in APMC market yards, subject to two different Acts, different regimes of market fees, and different sets of rules. This is already causing the traders to move out of regulated markets into unregulated space. If collusion and market manipulation are concerns inside the APMC markets, the same collusion and market manipulation are likely to continue in the unregulated market space. Within the regulated APMC markets, there exist mechanisms to address and prevent such market manipulation, whereas in the unregulated ‘trade areas’, the central Act contemplates no such mechanisms. Means of exploitation of farmers include price and non-price issues such as weighing, grading, moisture measurement, etc. mainly in remote areas which do not have access to structured markets, including tribal areas,’ the letter read.

In the letter, the economists also mentioned about fragmented markets, monopolies and issues with price discovery.

‘The experience in Bihar since the removal of its APMC Act in 2006 shows that farmers have less choice of buyers and less bargaining power, resulting in significantly lower prices compared to other states,’ they wrote.

Fourthly, the economists also said that there will be unequal players in contract farming-small farmers and companies, which does not give enough protection to farmers’ interests.

Finally, the economists said that the three Acts together represent unshackling of agri-business companies from state-level regulation and licensing. They also mentioned about concerns related to the consolidation of the market and the value chains in agricultural commodities in the hands of a few big players.

In the end, the economists suggested that the farmers need a system that allows better bargaining power and their expanded involvement in the value chain through storage, processing and marketing infrastructure in the hands of farmers and FPOs and that, they said, would enhance farmer incomes.