When India was born as an independent nation, it was literally very hungry. Food was so scarce that Nehru began growing sweet potatoes in his vegetable garden at Teen Murti House, and defended roast made from a dough that was a mixture of attack Y shakkarkandi. It was a time when food-growers were left without food because landlords and moneylenders, who controlled the local grain trade, bought cheap and sold high.

Nehru had fresh memories of the 1943 Churchill famine in Bengal, which claimed between two and three million lives. Hunger was a political time bomb and Nehru knew he would have to deal with it, at least in rhetoric, if not in fact. “Hang hoarders and black merchants from the nearest light pole,” is what he is believed to have said in reaction to the artificial food shortages that grain merchants are engineering.

It is in this context that the State decided to control the food trade. Over the next two decades, state governments established large mandis which were directed by regulated Agricultural Products Market Committees or APMC. Gradually, all the large wholesale markets, which were the first points of contact for farmers, were incorporated into the APMC laws. The goal was to track all products that arrived in large quantities. mandis throughout the country, estimate food availability and ensure that farmers receive stable and reasonable prices.

This was accompanied by a minimum support price (MSP) for key crop farmers. In theory, this was the minimum price at which the government would buy the farmer’s produce if it could not find better rates on the open market. And the APMC mandi it was the mechanism through which the state would acquire the product at a previously announced price.

Currently, the government establishes SMPs for 23 crops consisting of cereals, legumes, oilseeds, and four cash crops: sugar cane, cotton, jute, and copra (dried coconut). However, a floor price only makes sense if farmers are confident that everything they contribute to the mandi will be bought. At this time, government agencies only purchase rice and wheat, along with some cotton, oilseeds, and few daals. For the remaining crops, there are hardly any acquisitions at MSP rates.

So even in the APMC mandis, farmers end up selling most of their produce below the prices set by the government. This is especially the case for non-MSP crops, such as fruits and vegetables. We know how farmers earn a pittance even when wholesale prices for tomatoes and onions skyrocket. They are intermediaries and commission agents who control the mandis – in collaboration with locals net Y given – and get fat, while farmers and consumers lose.

In fact, even with rice and wheat, only a few farmers manage to sell their products to government purchasing agencies. Modi’s own government Shanta Kumar Committee which examined the food procurement system reported in 2015 that, on average, only about 14 percent of rice and wheat farmers were able to sell their products to government purchasing agencies. The report also says that even those who sold to the government got the declared MSP for only 27-35 percent of their production.

Shanta Kumar’s report also suggests that only wealthy farmers can access government mandis and charges the MSP. It says that of the total agricultural homes in India, less than 6 percent were sold to purchasing agencies. In fact, almost 75 percent of rice farmers and more than 65 percent of wheat farmers did not even know that the government was purchasing food grains. What is even more surprising is that 68 percent of rice farmers and 60 percent of wheat farmers had not even heard of minimum support prices. Even if wealthy farmers are assumed to account for 50 percent of the rice and wheat that reaches the market, Shanta Kumar’s report would suggest that the government buys nearly a sixth of India’s total rice and wheat production at the price. minimum that advertises. .

There are two solutions for this problem. One is to strengthen the procurement system and ensure that everything that farmers offer to government agencies is purchased from the MSP that was announced. The other is to say that since such a small number of farmers actually benefit from APMC mandis and the MSP system, we might as well dismantle it. The former puts the responsibility on the state to build more mandis, bring them closer to farmers, expand the purchasing network, invest in storage facilities, and ensure fast and efficient transportation from states with surplus to states that do not produce enough. As agricultural expert Devinder Sharma says, India needs 42,000 mandis so that all farmers can access government buyers, but we currently only have 7,000.

The second approach is only conscientious if policy makers believe that the private sector is more efficient in managing the entire food marketing system. But we know that this cannot be limited solely to the food trade. After all, merchant margins are based on reducing what they pay producers and increasing what they charge consumers. Those who advocate deregulation of the food trade must also commit to the corporatization of agriculture. Because it is only when producers cut costs and reduce trade margins that they can sell at lower prices to consumers. Therefore, only when the capitalist enters agriculture directly, introduces efficiencies of scale and improves labor productivity, can costs be reduced organically and profits can be expanded.

It is clear that the Modi government has chosen this second path to solve the problem of India’s slow agricultural growth, low farm incomes and volatile food prices. That is why the three farm laws have come together. The first makes APMCs practically redundant. The second lays the foundation for contract farming at pre-agreed prices. And the third removes state control over the amount of cereals, legumes, oilseeds, potatoes and onions that traders and producers can store.

All three of these changes were necessary to allow the entry of large private actors into agriculture. If CMPAs are preferred by large farmers, private contractors will not be able to compete. Unless large-scale contract farming is allowed on contiguous farms, there can be no mechanization or economies of scale. And the whole logic of large-scale distribution networks depends on how much private companies will be allowed to store. Crucial crops had to be removed from the essential commodity list for that to be possible.

Will this help farmers? Of course, no. The history of large agricultural companies around the world shows that small farmers cannot compete and are uprooted once the large players enter the market. TO recent study of contract farming in the Moga, Tarn Taran and Amritsar districts of Punjab by Pavneet Kaur and Naresh Singla also demonstrates this point for India. Contract farming excludes small and marginal farmers, and even the largest farmers find it difficult to match the legal remedies that companies use during disputes.

Some would say that there is nothing wrong with that. There is a high level of disguised unemployment in Indian agriculture: more people work on a plot of land than necessary without increasing income or productivity. The size of farms is unfeasibly small and gets smaller after each generation. Hence, there is no harm in small and marginal farmers being driven out of agriculture and forced to move to productive jobs in factories and services.

Actually, that process has already happened. RBI data says that 20 years ago, about 60 percent of India’s employment came from agriculture. By 2016, it fell to 42 percent. CMIE data suggests that it is now down to around 35 percent. There has been a massive exodus from agriculture. However, there have been no good jobs in factories or in the organized service sector. Most of those who were forced to abandon agriculture had to be self-employed, living a precarious existence.

Things have only gotten worse for India’s lowest income groups, those who are technically above the poverty line but always in danger of sinking below it, in the last four years, since demonetization and the GST broke the back of the disorganized sector of India. On top of that, factories are operating well below capacity and corporations are not investing in expanding old companies or establishing new ones. Therefore, there is no reason to believe that farmers “freed” from their land will end up getting better jobs outside of agriculture.

It is understandable then why cynics see these new farm laws as a lifeline for large corporations wanting to enter the only space where demand is ever present: the food supply. This sentiment is compounded by the Modi government’s reluctance to turn the MSP into law. If these legal changes are going to help farmers get better prices on the open market, what is the problem with legally setting minimum prices every year? After all, if private contractors are to pay more, the government will never have to pay the MSP and it will cost the treasury nothing.

Nobody thinks the existing APMC system is good. But opposition to these new laws does not come only from those who believe in ‘socialist’ solutions. There is also the example of the successful cooperative milk movement in Gujarat’s Amul and its affiliate, Mother Dairy. What prevented the Modi government from introducing new laws that would facilitate, finance and legally protect these agricultural cooperatives? That is a question that even the greatest devotee of capitalist agriculture will find difficult to answer.