Abstract
Professor Sukhpal Singh’s book, ‘Regulating Agricultural Markets in India: A Smallholder Perspective’ is part of the Policy Studies Series published by Orient Blackswan. The series seeks to fill the gap of the ‘need to address, empirically investigate and rigorously analyse public policy in the field of governance’ within the existing social sciences literature. The book under review deals with the study of agricultural market regulations and legislations. Legislations are a fundamental component of the public policy system and reflect the State’s position vis-à-vis the existing class correlations.
The book also caters to a renewed interest in Indian agricultural markets, especially in the aftermath of the three Farm Laws passed by the Union government in 2020 (referred to as Farm Laws hereafter). Sukhpal Singh reminds us that while the Farm Laws might have been the most immediate, contentious and overtly centralised policy intervention to regulate agricultural markets, the reform agenda must be situated in a longer view, starting from the early 2000s. The slow pace of agricultural marketing reforms pertains to the distribution of federal powers where agriculture is enlisted as a State subject. Central governments before 2020 were cautious in towing the line and floated Model Acts and other non-legal instruments to incentivise the various state governments to legislate on agricultural markets.
The book is divided into seven chapters. Most chapters are the author’s previously published articles, collected in this volume with the Farm Laws forming the backdrop.
Corporate Interests and a Chayanovian View of Smallholders
The introductory chapter sets out the context and provides a framework for the study of agricultural marketing regulations through a smallholder’s perspective. It starts with a discussion of the Farm Laws, passed with the idea of ‘One Nation, One Market’ which represented an overhaul of the Indian agricultural reforms agenda and ‘open(ed) the domains of production, trade, and storage to the private sector like never before’ (p. 2). The underlined intention of the Acts was ‘to provide Ease of Doing Business for India’s corporate sector from procurement to stocking, processing and retailing as value chain players’ (p. 2), which could potentially accentuate the ongoing conditions of agrarian crisis.
Singh then lays out the agenda of interpreting agricultural marketing regulations from the perspective of smallholders, who dominate the Indian countryside. The rest of the chapter presents the complexities of identifying the smallholder cultivator and establishing a singular definition, given the differences in small farms versus the small farmer and issues of regional variations—across dryland and irrigated areas. Employing multiple frameworks, using global and India-specific literature, the essential role of smallholders in food production, efficiency, poverty reduction and sustainable agriculture is demonstrated. This exercise has tendencies towards essentialising smallholders, as is the case in most literature on small farms and farmers, which draws from the moral economy and Chayanovian conception of the peasantry in capitalist development.
In this attempt to identify and characterise the smallholder farmer, the author relies on the land-size class distribution of owned and operational landholdings, tenancy markets, farmers’ incomes, cropping patterns and access to various marketing channels. He identifies the additional markers of caste and tribe that accentuate marginalisation and inequality among the Indian peasantry.
Facilitation and Promotion Sans Regulation
The next four chapters (Chapters 2, 3, 4 and 5) deal with specific agricultural marketing legislations and their analysis. These legislations are the Model Agricultural Produce Market Committee (APMC) Acts, Model Contracting Farming Act, Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act of 2020 and the Union Contract Farming Act of 2020. The book has left out discussion of the Essential Commodities (Amendment) Act of 2020 which did not deal directly with agricultural markets.
Chapter 2 presents an interesting history of agricultural markets since the colonial period, role of the APMCs as they were envisaged, their regional variations and subsequent creeping in of ‘strong vested and rent-seeking interests’, which made reforms of the wholesale markets necessary. APMC reforms have also been long pending keeping in ‘light of the changing global and local markets’, ‘emergence of new stakeholders’, ‘new (modern retail and consumption) demand in India’. There have been lapses in regulation of the mandis or wholesale markets with respect to facilitating remunerative price realisation by producers and monitoring the quality of produce. The chapter then discusses the clauses of the Model APMC Act which were adopted by some states, the subsequent National Agriculture Market (e-NAM) of 2015 and the Model Act—Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act (APLMA) of 2017.
Chapter 3 on the Model Contract Farming Act of 2003 and the subsequent Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act (APLCFSA) of 2018, brings together the long-standing research done by Sukhpal Singh on the practice of contract farming—its various forms, crop-specific arrangements and international experiences. He explains the difference between contract and corporate farming, which are often incorrectly interchanged. He defines contract farming ‘as a halfway house between independent farm production and corporate/captive farming and can be considered a step towards complete vertical integration or disintegration depending on the given context’ (p. 62). In contract farming, unlike corporate/captive farming, the contracting company does not engage with aspects of direct land ownership or land leasing.
The running thread throughout the book concerns the State’s changing role from a regulator which protects farmer interests into a facilitator and promoter of private interests. For instance, the APLMA kept direct purchases outside the notified market yards beyond the ambit of any regulations, thereby facilitating private players and distorting the potential price realisation by producers. Other issues were inadequate representation of farmers in the Executive Marketing Committees, final approval for every infrastructure investment lying with the bureaucratic officials by passing elected committee representatives, and irrational differentiation between the fees levied on perishable and non-perishable commodities.
Similarly, in the case of the APLCFSA, regulation was foregone for promotion and facilitation. The 2018 version of the law gave up the limited regulatory roles that were part of the earlier 2003 Act. The 2018 Act surreptitiously moved into the domain of land leasing, which does not come under the purview of contract farming, making the author contend that the legislation perhaps ‘encourage corporate farming disguised as contract farming’ (p. 71). Further, the Act also proposed that the Contract Farming and Services Board would enter into aspects of monitoring quality/grade standards, thereby garnering the obvious question—‘why should a state-funded body promote markets for private agencies, especially when they are supposed to explore their own markets and invest in them?’ (p. 71). Singh points out that the proposed APLCFSA ran contrary to the concept of contract farming.
Chapters 4 and 5 on the two Farm Laws, discuss the contentions around the marketing reforms agenda and previous policies that laid the ground for their introduction. Singh writes on the inadequate rationale behind drafting of the laws and how they further solidified role of the State as a facilitator and promoter of private interests. The preceding Shanta Kumar Committee recommendations, along with the general direction towards facilitation of contract farming, and promotion of priority sector lending to contracting agencies as opposed to direct credit to farmers, allayed the ‘fear of withdrawal of the state from agricultural markets suddenly and leaving it open to the private sector to engage with farmers, without adequate protection of the law or support of the state agencies for farmers’ (p 126). This ultimately erupted into the widespread farmers’ movement against the Farm Laws.
Regional Inequality and Political Economy of Agriculture
One of the highlights of the book is its focus on regional variations—both with respect to agricultural marketing conditions as well as state-specific legislations. With the help of data, Singh shows the regional disparity in the availability and access of agricultural markets and the resulting farmers’ guarantee to receive the minimum support price (MSP). He points out that the MSP-based public procurement ‘mostly benefits a few crops like wheat, paddy and cotton in Punjab, Haryana, Madhya Pradesh, Telangana, Chhattisgarh, Uttar Pradesh and Odisha’ (p. 120) This is despite the limited geographical expansion that has taken place through the decentralised procurement scheme in the last two decades. Additionally, the development of contract farming has been biased towards the ‘agriculturally developed states’ of ‘Punjab, Haryana, Gujarat, Maharashtra, Karnataka and Tamil Nadu’ (p. 136), avoiding majority of the states with a predominant population of small and marginal cultivators which are in need of greater state support.
Among the state-specific agricultural marketing legislations, there is a critical spotlight on Punjab, which continues to be an interesting case study for processes of capitalist accumulation from agriculture and state–farmer–commission agent relations. The Punjab (Repealed) Separate Contract Farming Act of 2013, Amendments to the Contract Farming Act, 2020, and Punjab’s APMC Mandi Act Amendments of 2017 and 2020 are discussed.
For Singh, the reason behind Punjab’s separate law on contract farming passed in 2013 ‘can be found in the political economy of the state’s agribusiness sector, wherein farming and trading interests have been at loggerheads in protecting their interests’ (p. 43). This conflict was evident over the issue of direct payments of MSP to farmers, and its opposition by commission agents as they perceived it would hit their ‘business of interlocking of credit, input and output markets’. In order not to upset the politically powerful commission agents or arhtiyas and Mandi Boards, Singh argues that ‘instead of amending the APMC Act, which would have allowed direct purchases and setting up of private wholesale markets, besides permitting contract farming … the separate Contract Farming Act route was taken’ (pp. 43–44).
Similarly, the APMC Mandi Act Amendments of 2017 and 2020 which the Punjab government passed with the aim of blunting the provisions of the central Farm Laws and keeping its control over agricultural markets, ended up protecting the interest of the arhtiyas and traders in the existing APMC mandis—who primarily deal in food grains and cotton procured by the government agencies.
Punjab’s Contract Farming Act Amendment Bill, 2020, ‘barred any contract agreement for wheat or paddy below the MSP announced by the Central government for that crop’ (p. 147), moved into the purview of regulating contract prices and eliminated any competition to the regulated APMC mandis. Ultimately in November 2021, by repealing the previous contract farming law and APMC amendments of 2006 to 2017, ‘all private channels like private wholesale markets, direct purchase, or public private partnership in agricultural markets’ have been disallowed in Punjab (p. 149).
Minimum Support Price as a Statutory Law
The last chapter is on the demand for a MSP guarantee law. This demand has taken currency due to its support from the farmers’ unions, as they see it as a way of ensuring farmers’ incomes in the face of declining public spending and the overarching crisis of profitability in agriculture. Singh, while laying out the context, he delves into the economic reasoning for such a law from opposite ends. He points out that the MSP provision has shown to be more advantageous for bigger farmers.
While weighing arguments on both sides Singh favours applying the rights-based approach of the proposed MSP law in an appropriate manner. He writes that any such MSP law ‘should only mandate the Government of India … to be responsible for delivering this right and not tie the private sector into it since the latter never promised any minimum price to farmers, and they go by demand-and-supply dynamics to discover farmer-level purchase price’ (p. 171). He suggests that there are several existing government programmes which could be used to realise the legal guarantee of MSP, including public procurement, deficiency price payment and market intervention scheme among others. However, the larger question being posed relates to the re-evaluation of the role of MSP as ‘farmer income enhancement’ or for ‘income stabilisation’ (p. 171).
Like rest of the book, this chapter opens larger discussions and debates on the functioning of contemporary agricultural commodity markets within a neoliberal capitalist system. For a proper examination of the fast-track reforms pushed for regulating the Indian agricultural markets and to propose an alternative vision that is more equitable, it requires a deeper conception of its varied actors and their roles, including the differentiated classes of producers, commission agents, private buyers and the State. Discussion in the book opens up further probing into the non-price factors that are vital for enhancing incomes and sustaining livelihoods, especially of small and marginal farmers.
Lastly, the book is a good primer for anyone interested in the study of agricultural commodity markets in India, and its shifting vision.