NEW DELHI/MUMBAI, (Reuters) — India’s parliament has approved new farm bills that the government says will unshackle farmers from having to sell their produce only at regulated wholesale markets and make contract farming easier.
Prime Minister Narendra Modi’s cabinet had issued emergency executive orders in June to change the longstanding rules that govern the vast agriculture sector, which contributes nearly 15 percent of the output of the US$2.9 trillion economy and employs around half of India’s 1.3 billion people.
Opposition parties and farmers’ organizations have criticized the government for rushing through the legislation by issuing the emergency orders and accused Modi’s administration of getting parliamentary approval without proper debate, scrutiny and consultation.
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One of the laws approved by parliament permits growers to directly sell their produce to institutional buyers, such as big traders and retailers.
Many farmer organizations oppose this, saying it will leave small growers with little bargaining power.
Nearly 85 percent of India’s poor farmers own less than five acres of land, and they find it difficult to negotiate with large buyers of farm goods.
Farmer leaders have said that wholesale markets, which play a crucial role in ensuring timely payments to small farmers, would lose their relevance and even gradually disappear if large buyers were allowed to buy directly from growers.
Without offering an alternative arrangement to small growers, such as private markets or direct-purchase centres, the new rule does not make sense, growers have said.
India’s top grain producing states of Punjab and neighbouring Haryana fear that if big institutions start buying directly from farmers, the state governments will lose out on the tax that these buyers have to pay at wholesale markets.
