Farm Bill & Impact on Jammu & Kashmir

The much anticipated and talked about key monsoon session recently came to an end. With various bills and acts being introduced during the session, introduction and passing of 3 key farm bills namely Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill and Essential Commodities (Amendment) Bill by both houses garnered maximum spotlight/remained at the center of attention. Interestingly, the Bills though prospects to be farmer friendly and aims to increase farmer income simultaneously making him independent and free from Govt. control, it has caused a major stir in the country. The proposed Acts is an attempt to revolutionize Agrarian society, which constitutes 60% of India’s economy and hence the growth of the sector would fundamentally impact overall economy and vice versa.

It is stated that the Bills do not propose to get dusted with traditional APMC (Agriculture Produce Market Committee) or Mandi system. In fact, the bills enable the farmers to sell their production at Govt. Mandi or Private Mandis or to the Corporates directly. With the proposed privatization of the Agrarian Society, the state-controlled bodies are destined to lose their existence as has been seen in the case of Indian Airline, Air India or BSNL. The reason for such extinction from the market has been the imitable marketing warfare and unbeatable introductory offers by corporate houses, making the govt. run bodies practically impossible to compete and consequently being auctioned.

In order to understand the impact of the proposed act on the UT of Jammu and Kashmir, one needs to dive deeper in to the framework of the act, the agricultural structure of the state, and draft an unbiased understanding of the same. Direct Selling and Buying, Private Mandi, Contractual Farming and, Removal of Cereals from Essential Commodities Act are some of the fundamental issues with the Farm bills.

The change in Constitutional status of Jammu and Kashmir has also changed the concept of second wave protests and discussion. A central act was subject to ratification by the state assembly and was suitably modified if required creating a simulated appeal provision. The FARM bills, pending the president assent would soon become an Act and substantially impact UT of Jammu and Kashmir.  It must be noted that approximately 75% of the State population is associated directly or indirectly with Agriculture or Allied services. 65% of the J&K’s revenue comes from Agriculture activities, with only around 30% of its area being under cultivation.

Essentially, Jammu yields wheat, rice, maize, pulses, fodder and oilseeds while the valley yields paddy and maize in addition to the orchards (apples, al­mond, walnut, peach, cherry, etc.) and saffron cultivation. In Ladakh barley, wheat, maize, vegetables, barseem and fodder are the main crops.

Thereby, broadly categorizing J&K’s Agricultural setup in two sections – one being Premium, which includes apples, almond, walnut, peach, cherry, and saffron and the other being essentials consisting wheat, rice, maize, pulses, fodder and oilseeds.

The Impact of FARM bills on Premium Category can be expected to be on a positive side as the harvest is sold at premium prices with fewer price fluctuations. The premium category harvest being region specific and rare, provides the farmers a level playing field in negotiating with private buyers. The private buyers can always shift the increase in purchase price under this category on the end user without impacting the sales. This category would be a pure delight for contractual farming, as the same would increase the export prospects generating greater profits for farmers and Private players.

Traditionally, Kashmiri Orchardists, for their yearly harvest would reach Delhi Fruit Mandi with the stock. They would then deal with the highest bidder, offered by Licensed Middleman at APMC. With the reformed bill it is now anticipated that the Corporates could also reach the orchard owners for contractual farming or harvest purchase, therefore reducing the transportation cost and offering better purchase proposals.    

On the other hand, the essentials category gets impacted adversely, benefitting the corporates largely. Rice and Maize being a dominant crop and no mention of the MSP in the newly introduced Bills coupled with tougher competition from Punjab and Haryana would impact the sale of these crops for the farmers of J&K. Not to mention, the location proximity and infrastructure would make its easy for Corporates to choose from. With the aforementioned, if the benefit of MSP is not offered to the J&K’s rice and maize farmer, the remuneration of the farmers would be drastically affected impacting the entire ecosystem as a whole.    

The Contemplations have been made already and demand for capping purchases by Private players not below the is a much required safeguard, the same might not be a pleasant proposal for Corporates but can surely be done on rotational basis.

Another pivotal aspect for essential category farming is assessing Contractual Farming, which would practically make the farmer or landowner a laborer at his own field. Farmer would be working only to satisfy the Contract obligations and without him knowing the agreement would create a proxy ownership of a Bombay based corporate house on his land in Anantnag.

The simultaneous amendment of the Essential Commodities Act will leave the farmer exploited and prone to unfair negotiations every alternative year. Removing cereals as essential commodity, practically allows storage of Cereals in any quantity and is speculated to be used by corporate houses to regulate prices by hoarding and leaving the farmers without a choice. Hence, the farmers plight remains, making them only more vulnerable.

Another major change that has been introduced by the soon to be Acts, is ousting the jurisdiction of Civil Courts and resting the powers with the SDM who would appoint a committee for resolving the grievances. Hence putting independence and neutrality of decisions under dark cloud.

How does the future look like?

The proposed model has been picked up from the US and the European market and as per statistics a short gain followed by stagnation and depression is what has been observed, the model was also tried by Bihar Government and again the statistics have been not convincing.

Though what is advisable as far as the farmers are concerned is formation of better co-operative societies and falling to concrete legal advice and not bowing to corporates as the FARM bills only opens new options and does not mandates the same. 

The Proposed Act may leave a tangible impact on the UT of J&K as the farmer might soon shift from Paddy and Maize farming to alternate yields prospecting better monetary compensation; so in 10 years from now while driving across the highway if you don’t find men and women ankle deep water weeding out rice (nendhkaran); just recall what happened 10 years back.

Viqas Malik and Romaan Muneeb are Lawyers at the J&K High Court.