What did the SC appointed committee say on the Farm Laws in its report?
Sai Krishna Muthyanolla
March 31, 2022
The Supreme Court appointed a four-member committee in January 2021 to look into the farm laws, talk to all stakeholders and submit a report. Since no further progress is made after the report was submitted in a sealed cover, one of the members of the committee made the report public last week. This story looks at the major issues in the committee’s report.
Indian economy is traditionally agriculture-based. More than 55% of the population still depend on agriculture for their livelihood, making it the largest employer in India. The Agriculture and allied sector grew at 3.6% during 2020-21, making it one of the sectors that registered a positive growth even during the pandemic. However, all is not well in the agriculture sector. The sector is reeling under severe stress, with issues all over the spectrum right from pre-production to post-production. The monthly average income per agriculture household at an ‘All-India’ level during 2018-19 is Rs.10,218.
Successive governments have been making efforts to address these issues through targeted interventions in the form of input investment support, Price support mechanisms, crop insurances to protect against uncontrollable events, and so on. The gains from these are hard to ascertain & quantify but the reality is that the sector still faces complex challenges. Amidst all these, the Government of India in the year 2020,  brought in three farm laws aimed at enhancing the farmers’ income- The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 (20 of 2020); The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 (21 of 2020); and The Essential Commodities (Amendment) Act, 2020 (22 of 2020). The enactment of these three farm laws resulted in widespread agitations across the nation, the epicentre being the Delhi Border. These were challenged in Supreme Court, and it had appointed a 4-member committee to understand the grievances of the farmers about the farm laws, the stance of the government and make suitable recommendations.
Since the report was submitted to the apex court in a sealed cover, and no further progress is made, one of the members of the committee made the report public last week. We look at major issues dealt the committee & their response, as per the report available in the public domain.
About the committee
The apex court appointed committee initially had 4 members. But later, one of the members (Bhupinder Singh Mann, National President, Bhartiya Kisan Union, and All India Kisan Coordination Committee) recused himself from the committee. The other members include:
The archive of the views of the committee members on various agricultural-related issues is to provide an insight into their approach & ideas towards reforming Indian agriculture. Some serious questions were raised regarding the composition of the committee. There is no mention of any criteria that are followed in the selection of the members of the committee. It is also not known if the court considered the previous writings & views of the committee members on the farm laws. It was widely reported that three of the four members of the committee have strongly supported the farm laws.
It is also not clear why a member of the committee chose to release the report in the public domain when the court is still hearing the matter.
Report findings
The committee adopted a four-stage approach to arrive at the feedback on farm laws- holding direct interactions, feedback, or suggestions to a dedicated email id (sc.committee-agri@gov.in), a dedicated portal to receive comments on the questionnaire and using evidence-based analysis.
The report claims that the ‘silent majority’ supports the farm acts, and the act of repeal is a travesty of justice to them. However, looking at their survey sample and the feedback compositions, it is difficult to understand how the committee arrived at this conclusion. This is also in contrast with the results of a survey conducted by a private media organization, Gaon Connection on Indian farmers’ perception of these farm bills.
Before passing these bills, in July 2019, NITI Aayog constituted a high-level committee on “Transformation of Indian Agriculture” consisting of the Chief Ministers (mostly of the NDA). The terms of reference include suggestions of modalities for timely implementation of the following reforms:
In reply to an RTI application about the functioning and report of this committee, NITI Aayog denied the RTI request on the report, even though the report was already submitted.
Minimum or ‘Maximum’ Support Price:
Minimum Support Price (MSP) is one of the measures for achieving remunerative prices for the farmers. It is fixed based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). The main issue raised by the farmer unions is regarding the MSP. They feared its removal gradually, thereby weakening their bargaining power. The majority of the farmers have small and marginal landholdings, whose agricultural output does not provide them with bargaining power on par with big private players.
The committee in its report mentions how only 27.5% of farmer respondents sell their produce at MSP, with more concentration in Punjab, Chhattisgarh, and Madhya Pradesh. It also mentions how sometimes weighted average mandi prices fall below MSP. If we look at the mandi prices of Karnataka, the weighted average price is well below the MSP. The ‘minimum’ support price is becoming the ‘maximum’ price that a farmer could potentially get for his/her produce. Such low prices are one of the main reasons why the farmer unions want to have a legal status for MSP.
In response to a question in the Parliament on whether the Government proposes legislation for MSP and any assessment done to study the impact of lack of reasonable price of agricultural produce, the Ministry did not respond to these questions directly. Whether the MSP is helping the farmers or is it failing them is a matter of debate and discussion.
Freedom to sell anywhere
One of the primary arguments in support of the farm laws is that it provides the farmers with the freedom to sell their produce anywhere outside the APMCs. The committee recognizes that this act tries to formalize the transactions happening outside the APMCs. As per the response in the Lok Sabha from July 2021, the farmers are free to sell their produce anywhere that fetches them at a higher price even now. As observed earlier, the price in APMC mandis sometimes goes below the MSP, and there is no assurance for the farmers that the price outside the APMCs would exceed MSP. Excessive focus is laid on the freedom or choice of the farmers to sell the produce, without taking into consideration whether the farmers have such bargaining power and the capability to sell anywhere outside the nearest mandi. Bihar’s tryst with the de-regulation of the APMC in 2006 provides us with an example of the consequences of weakening of the mandi system and the entry of potentially exploitative private players.
Another argument by the Government is that the middlemen exploit the farmers by way of charging a commission. The farm acts aim to remove such exploitation. However, neither the government nor the report suggests on how this is implemented in the reality. Involvement of private players in an arena that is largely dominated by individual traders and could lead to the creation of two layers of middlemen, as stated by a few commentators. The report seems to agree with the view of the government on this matter.
It is evident from the committee report that on a majority of the issues, the committee agreed with the reasoning provided by the government. The committee did not delve into the operationalization aspects of the farm bills, which is the primary apprehension of the farmer unions and organizations. It also did not provide enough information on the respondent pool and has not provided details of any contrarian views received by the committee. In the absence of these details, the report may not help bridge the trust deficit that was a major point of contention between the government and the farmers.
Featured Image:  SC Committee on the Farm Laws