India&rsquo;s agricultural sector, the backbone of the economy and livelihood for nearly half of the population, is facing a seismic shift under the guise of reforms. The government&rsquo;s National Policy Framework on Agriculture Marketing (NPFAM) draft policy promises modernization but is seen by many as a backdoor attempt to revive the controversial agriculture laws repealed in 2021. While proponents argue that these reforms will streamline the agricultural supply chain and attract private investment, critics warn of devastating consequences for small and marginal farmers. These reforms risk concentrating agricultural power in corporate hands, shrinking farmer incomes, and altering the socio-economic fabric of rural India.
What Does the NPFAM Propose?
The draft policy outlines several initiatives aimed at transforming India&rsquo;s agricultural markets:
<ul type="disc">
<li class="MsoNormal">Private markets:&nbsp;Encouraging private wholesale markets and direct purchases at farm gates.</li>
<li class="MsoNormal">Unified market:&nbsp;Introducing a unified market fee and trading license system.</li>
<li class="MsoNormal">Digital technology:&nbsp;Employing blockchain, artificial intelligence, and machine learning to enhance supply chains.</li>
<li class="MsoNormal">Market information:&nbsp;Creating a system to reduce information asymmetry through better market intelligence.</li>
<li class="MsoNormal">Price risk mitigation:&nbsp;Promoting contract farming and price insurance schemes.</li>
<li class="MsoNormal">Capacity building:&nbsp;Offering training programs for farmers and marketing personnel.</li>
<li class="MsoNormal">Regional focus:&nbsp;Developing tailored ecosystems for specific regional produce.</li>
<li class="MsoNormal">Value chain:&nbsp;Building a framework to integrate public and private sectors in post-harvest processes.</li>
</ul>
Additionally, the policy mentions reforms to Agricultural Produce Market Committees (APMCs), modernization of Grameen Haats, and the promotion of corporate post-harvest infrastructure. While these sound progressive, the fine print raises alarms.
The Cost of Reforms
The draft policy&rsquo;s lack of legal guarantee for Minimum Support Prices (MSP) underscores the fears of farmers. It could dismantle the existing network of 7,300 APMC markets and 4,843 sub-market yards that currently offer farmers some level of price assurance. Private markets, despite their promise of efficiency, are likely to prioritize profit over fairness, leaving small farmers vulnerable to exploitative contracts and low prices.
Historical data highlights the resilience of small and marginal farmers. They constitute 85% of the agricultural workforce and manage 47% of India&rsquo;s farmland. Despite limited resources, these farmers have driven India&rsquo;s agricultural success, increasing grain production from 135 million tons in the 1950s to 1,300 million tons in 2021-22. Their contribution made India not only self-sufficient but also a major exporter of agricultural products. Yet, their average income remains alarmingly low&mdash;₹10,218 per month as per NSSO surveys. Without robust protections, privatization could plunge these farmers into deeper financial distress.
A Backdoor to Rejected Laws?
Critics of NPFAM argue that it mirrors the three contentious farm laws repealed in 2021:
<ol start="1" type="1">
<li class="MsoNormal">The Farmers&rsquo; Produce Trade and Commerce (Promotion and Facilitation) Act:&nbsp;Promoted private markets at the cost of APMCs.</li>
<li class="MsoNormal">The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act:Encouraged contract farming without adequate safeguards.</li>
<li class="MsoNormal">The Essential Commodities (Amendment) Act:&nbsp;Relaxed stockholding limits, enabling hoarding by large entities.</li>
</ol>
The NPFAM policy also bypasses state governments, despite agriculture being a state subject under the Constitution&rsquo;s Seventh Schedule. By centralizing control, the policy sidelines local voices and undermines the federal structure.
Socio-Economic Consequences
Privatization could have far-reaching socio-economic repercussions. Small and marginal farmers, already struggling to make ends meet, may be pushed out of agriculture altogether. Unable to compete with corporate players, they could lose their land and livelihoods, becoming industrial or farm labourers. This would not only erode their economic independence but also disrupt rural communities and traditional farming practices.
Moreover, reduced farmer incomes would increase dependence on the Public Distribution System (PDS), burdening government resources. Economists estimate that even if privatization boosts agriculture&rsquo;s GDP contribution by 2-3%, it&rsquo;s unlikely to justify the human cost of displacing millions of farmers.
The Path Forward
Instead of focusing on privatization, agricultural reforms should prioritize:
<ol start="1" type="1">
<li class="MsoNormal">Legal MSP Guarantees:&nbsp;Ensuring fair prices for farmers.</li>
<li class="MsoNormal">Strengthening APMCs:&nbsp;Modernizing existing markets rather than replacing them.</li>
<li class="MsoNormal">Financial Support:&nbsp;Committing funds for infrastructure development over a 5-10 year horizon.</li>
<li class="MsoNormal">Inclusive Policy-Making:&nbsp;Involving state governments and farmers&rsquo; representatives in drafting policies.</li>
<li class="MsoNormal">Regulating Private Players:&nbsp;Establishing rules to prevent exploitation in private markets.</li>
</ol>
India&rsquo;s small farmers have proven their resilience and productivity over decades. They need policies that empower them, not ones that reduce them to labourers for corporates. As the government pushes for reforms, it must ensure that growth is inclusive and equitable, safeguarding the interests of those who feed the nation. The stakes are too high to gamble with the future of Indian agriculture.

Kisan Mahapanchayat (photos Social media)

Government reforms may benefit corporates but risk devastating small farmers

Privatizing Indian Agriculture: A Threat to Farmers

Government reforms may benefit corporates but risk devastating small farmers

January 26, 2025 | 12:35 IST