Will the #farmersbill benefit farmers? The short answer is, we don't know yet. Flagging a few gaps here. A thread.
With the new set of laws, trade will likely move out of regulated mandis to save on taxes and fees. Will traders pass on their savings to farmers? Looks unlikely.
Transactions outside mandis will become invisible, unless the government puts in place a mechanism to record them. If we don't know what price a new buyer is offering farmers, no way we can evaluate if farmers are benefiting or losing out.
Currently the trade data from regulated APMC mandis are recorded daily. But invisible transactions could make farmer's welfare and even inflation management a messy affair. More so, if government lose track of stock positions of private players.
As farm trade moves out of regulated mandis how will price discovery happen? In mandis it happens via auctions now, and no matter how imperfect, farmers know of a benchmark price. No proposed price discovery mechanism in the new bills.
If doing away with or bypassing APMCs was so urgent and important, why did farmers from Bihar not benefit after the state abolished regulated market yards in 2006? Private players didn't set up market/post harvest infrastructure, and farmers there are mostly fleeced by traders.
Traders and agri businesses may end up milking the new regime. Farmers may or may not benefit in the process. Upcoming Kharif harvest season will be a big test.
The government should have held wider discussions with state governments, farmers and experts. Instead it is pushing a new set of laws with gaping holes. This may lead to utter chaos!
Unfettered market access sounds good in principle. And despite all the inefficiencies of APMCs, indian farmers receive a far higher share of the consumer rupee (50-68% for grains and pulses) compared to what US farmers receive on every food dollar spent (14%)
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