Our tenant is a farmer, the husband – wife also work as teacher in Govt. school. I got to spend some time with him in my home town at Amritsar due to lockdown. His farm and his ancestral village was hardly 20 kilometres from the city. He would visit his farm often. Though he would spend days and nights together at village only during sowing and harvesting season.
I was intrigued, with his attachment to farms and also living in city with safe and secure Govt. job. He said, he can live at village as well but for his children’s education and future, he is living in city. As husband-wife were posted also in rural schools and not in Amritsar Urban. I casually asked him, why doesn’t he use his education and exposure to city to grow crops other than wheat and paddy.
He started with his background and the reality of experiments. He had 27 acre farm, fairly big by Indian standards, which was tilled by him and his 2 brothers. He had travelled to Ludhiana to meet professors at Punjab Agricultural University to understand crop diversity. If he can plant some other crops on 9 acres of land, which can offer more productivity (read income). He had travelled to Maharashtra to learn about horticulture crops and undertook trainings as well.
He explained for instance, they had planted sunflower in 6 acres to see if it gives better realization and perhaps they could expand this crop next year in terms of acreage. He said, we were mocked at the Village Panchayat by the Sarpanch with questions demanding answers, that what are you doing. You are destroying all the values of the village. Needless to say, his father felt humiliated.
He said, our sunflower crop was visible from highway shining and glowing under the sun. The village marveled at the crop. And then one day, parrots attacked the crop and all the petals of sunflower were eaten in few hours before sun down. The output from 6 acres was totally wasted. To avoid further humiliation in the village Panchayat, we three brothers drove tractors with hull cultivator to flatten that piece of land at night.
Couple of other experiments with horticulture crops but due to lack of knowledge and without proper guidance, they were not able to make much money from those crops. After wasting few years and few lakhs of rupees, we realized there is a reason why everybody farms wheat and rice, because it is secure system, it is supported by Govt., it is protected by Govt. You cannot operate in isolation, the system which does not possess the blessing of Govt. is most likely not to be a success.
Other instance, which is known to every farmer in Amritsar District was an experiment with Nijjer Agro. Nijjer Agro has now defunct plant but in the past decade, they were the largest tomato puree suppliers to Nestle for Maggi Tomato Ketchup. Nijjer Agro needed farmers to grow tomatoes for them. He was offering wholesale price with the produce weighed directly at factory warehouse and payment made in cash.
Tomato is horticulture crop. My tenants eyes lit up, a tomato plant grows tomato every week. Once the shrub grows, you keep plucking the tomatoes for next 2 – 4 months, throughout the season. Unlike wheat and paddy, which take 3 – 4 months to grow and ripen and then crop is harvested along with the plant. But tomatoes need care in tilling the soil, pesticides, insecticides on regular basis to uproot plant which are past their life and plant new seeds.
Eventually there was so much tomato in Amritsar District that we had to wait for our turn for 12 hours to dump the loaded trolley at the Agro plant. Tomato prices at the agro plant dropped to Rs. 1/kg. Supply exceeded the demand many times over. Farmers stopped growing tomatoes for the agro plant and the plant also closed eventually.
He explained, when there are so many farmers dumping their produce, how can one private plant owner suffice the need. It has to be regulated or controlled by the Govt. to balance the demand and supply to ensure the sustenance of farmer, even if it is not highly profitable but slightly more profitable.
Another time, he reminded me, a farmer’s life is the toughest. Every business operator keeps his goods under lock and key in safe environment, my produce is standing in the field. There is not way to protect it. Farmers are very fickle to weather.
Like we would complain when the weather gets too cold from Christmas to Lohri, he would be smiling, the harsher the winter, better is the thickness of the grain in wheat. After Holi, he would be happy if the summer is hot quickly, he would pray for more harsher sun, my crops will dry properly before harvesting. One heavy sand storm or dust storm, and the farmer is done. It blows away the grain from the plant to the ground.
Rain is something a farmer fears in late March, early April, it can damage the ripen crop before harvesting. Accuweather is the most used App by farmers. India’s MET department is always making weather predictions, which are always off target. They never realize, the farmers which feed on this information for their livelihood. Similar is their pattern for rain, they plant the paddy a fortnight in advance before the rainfall. Yet the rainfall cannot get so intense during those time lapses that the dead crop falls flat on the field.
What is the insurance of realization I have of roughing it out in the mud to produce the food, if my own family cannot reap some benefits from it? The only flexibility he possesses is in terms of choosing his mandi within the district of Amritsar. He cannot choose a Mandi, outside the district of Amritsar to sell his produce. To be more precise, not the district, but the Market Committee, Amritsar has 100s of Mandis (Grain Markets) and 8 Market Committees. But anybody can contact him from anywhere and he can deliver his produce within 100 – 200 kilometres, because his family is not dependent on only agricultural income. Anybody can collect his produce from his farms at the price they agreed too. Now he is asking me, what is new in this new law, which was not prevalent earlier?
Earlier as well, I was free to sell to anybody outside Mandi, with or without the help of middleman or Govt., whether to Corporate or end user. In fact, we also bought small quantity from him. He says, why can’t the Govt. (sub contract to an agency) take the onus of packing and shipping the wheat for us? Arhtiya is also sub contract work, he is taking his fixed commission, so that lakhs of farmers are not exploited.
I am assigned a date during which I take leave from my Govt. job and dump my tractor – trolley filled with wheat from my farm to Mandi. I have three tractors and one trolley. The village panchayat gets together and distributes the days for sharing of trolleys amongst villagers. We start dumping my wheat with 80 trips of trolleys. For efficiency, we make 20 trips to mandi with four trolleys filled each time. My designated arhtiya (dealer), weighs the wheat and packs the wheat for the Govt. Arhtiya ensures, I get the Govt. receipt for the tonnage of wheat, I had dumped in mandi. Whether he packs it in 2 days or 20 days, it is upto him and Mandi Board, they have to coordinate, plan and execute that aspect of food grain.
He delivers the caveat here, why are we talking about wheat and not paddy? Paddy is also regulated by the Mandi Board but the produce never reaches Mandi. Here I inserted my anecdote, I remember playing hide seek with the sacks of wheat at Dana Mandi (Grain Market) in my ancestral home, my grandfather’s tea merchant business was next to the Mandi, during summer holidays. For rice, even I didn’t know as there used to no holidays during kharif crop. Rice travels from farm to rice processing unit; from processing unit to FCI warehouse. Paddy yields 2/3rds of produce from the crop. Rice processing unit makes money from by products of rice, like Rice Bran Oil which is extracted from the rind, Animal Feed is extracted from the by product of Oil and further by product can be used for generation of electricity.
Here I added, we have to be extremely cautious while driving in winters amidst in fog, because of the trolleys which are five times (or hell even ten times) loaded beyond their capacity to transport rice waste to oil extraction companies. Wheat is sieved at the farm with the help of reaper.
He questions me, how will I make these 20 trips to where and how or who will come to my farm to collect my produce of 50 tonnes. He said his is large number as compared to other sampler in the State. Leave apart me, even the Sarpanch cannot negotiate for whole village with maximum capacity of 2000 tonnes. An arhtiya himself deals with at least 5000 tonnes of wheat. A small corporate would want to deal with at least ten times wheat of arhtiya to make any business of wheat.
He states facts, Mine is 25 acres of farm. There is one crore acres of farm land in Punjab itself. More than a million farmers. How will the Govt. ensure parity of the system across the State?
The designated dealer may keep some wheat for his own sale, outside the Govt. channel for which he issues me separate slip or hands over cash. I can ask for cash upfront from my dealer against the Mandi receipt, which he never does. I wait for my payment from the Govt. (FCI) This receipt can be discounted by Bank as well. I do know, my designated dealer does theft of 1% of my wheat during the process of weighing.
Mandi Board delivers the wheat to FCI. In lieu of which FCI, issues the Mandi Board the warehouse receipt. During the harvesting season, the work in Mandi goes on for 24 hours. The labour is even packing wheat at night. FCI is taking the cash for payment from the Bank. The Govt. is free to sell the wheat at premium to whosoever they wish to. The Govt. does not carry all its business on its own, it always hands over the work to contractor. Like FCI is one agency, why can’t Govt. appoint one big corporate (or perhaps number of contractors) of its choice to handle this business of procuring, packing, storage and selling wheat, domestic or export.
FCI is efficient or inefficient is beyond the purview of farmer. If the Govt. is committed for reforms in farming sector, perhaps they can start with bringing efficiency and overhauling the working of FCI. FCI officers make smooth money from commission for rice processing units to help them procure a little beyond the designated capacity of their unit or fudging the data of the productivity of crop. Similarly they have their own tricks to make commissions from wheat.
He further adds, every farmer knows about the leakages in the system. How can Govt. (Centre or State) say, they are not aware of the leakages in the system? If the Govt. cannot rectify the system, which lies in their total control; who else can. How come Govt. expects crores of farmers to operate in free market? Who will ensure the freedom of free market? What is the system to ensure that the farmer will not be manhandled by the system or the corporate? To the level of 2%, we are exploited by Arhtiya/Mandi Board/FCI, the farmer has adjusted to that process.
Arhtiya exploited the farmer for decades. After 25 years, Govt. realized it cannot manage all the farmers and all the needs and all the risks of the farmers. Hence they have formalized the arhtiya, who is the Banker of the farmer, who always give money to the farmer, without fail, without security, without collateral.
Today as well, arhtiya takes advantage of those farmers, who don’t save, who run to him for every emergency or use the money for show-off. Arhtiyas stands for more than half of population of Punjab (for all farm families). Now with the corporate system, who will support the farmer in emergency for wedding, for hospital bills. He said, villagers also learnt the tricks of the exploitive arhtiya, if he comes for recovery from farmer in village, he ends up badly beaten up by the villagers. Police have no option and to not take cognizance against the whole village.
Mandi (the market) can exist at the source only. He cites the example of steel prices in Punjab, originate from Mandi Gobindgarh. The industry can be concentrated at one location. Yet the same rates are prevailing across the Northern India for retail prices. The product remains the same, its steel.
Farming cannot be concentrated at one place. There cannot be one market for wheat. When the farm land is spread across the State. He asks me, name one industry, which is spread across the State. Industry is always concentrated at the source or as per the convenience. Farming cannot be concentrated. Govt. had to set up markets at the source. Paddy is delivered to the closest rice processing unit, logistically, it will be unviable for farmer and rice processing unit to travel long distances.
Unviability of delivering the crop across the districts is known to every farmer. How come Govt. doesn’t understand the fact? All through this discussion, the hardened super tanned layer is always visible on the face of my tenant, which is the case with every farmer, due to the time, they spend on the fields under harsh sun.
He gave another instance, of an IAS officer dating back to last decade, who had spent a lot of time building the plan and convincing the Govt. to move the farmers of Punjab from wheat – rice cropping pattern, to corn in place of water guzzling rice crop. Corn is the staple food in America. Here the master plan included, ten strategic placed corn processing plant for processing corn crop to packaged food. All the plants would be run by the private company. Govt. would only ensure fair price to farmer and fair distribution of crop amongst the processors. Corn’s market price is four times of wheat/rice. It would result in better realization for farmer. Currently corn is sold at five times (Rs. 100) the MSP (Rs. 20) in retail market and the farmer is realizing 50% (Rs. 9) of the MSP in open market.
Needless to say, his proposal did not move an inch, as it would mean Govt. would lose the grip on farmer and farmer would operate independent of Govt. in a decade. Rice Millers (some owned by politicians or political patronage) were wary of the proposal. Arhtiyas were wary of the proposal. Arhtiya (middleman) will always stay relevant in Indian agriculture. Only his form or role/responsibilities may increase/decrease, along with the capital he invests in the process.
He further explains the farmers market vis-à-vis industrial products. He takes the case of RIL, the most successful and productive refinery in the world. He says, RIL’s refinery complex is built on 10,000 acres. He doesn’t know, he say let’s assume it is built on 1,00,00 lakh acres. RIL’s refinery turnover is Rs. 3 – 4 Lakh Crores. No doubt, it is industry so complex set of machinery is installed on the land with investment of lakhs of crores. Machinery which is fixed in nature. No matter what, that machinery cannot be uprooted. His acre of land with investment is delivering Rs. 3 – 4 Crs output.
Which is that unique factor about farmer’s land, if he can extract 1/10th of output (in terms of value) from one acre as compared to industrial unit. He said take any crop. Invest any amount of money on that land. My output cannot exceed beyond Rs. 3 lakhs/acre, no matter what I do or Govt. does it for me. Crores of crores of farmers are undertaking the same activity, which cannot be concentrated. It will always be spread. You simply cannot create One Market for even agricultural crop.
ITC, Britannia were earlier also collaborating with farmers as they want to offer consistency in their packaged food products to consumers. So hence they were working with farmers in educating them with their input and offtaking output. The new laws offer corporates more flexibility with farmers. But how many companies will collaborate with how many farmers, when there are more than 14 Crs farmers in India producing 60 Crs Tonnes (agriculture plus horticulture) of output.
He poses me question, if corporates will help the farming sector, why are tobacco farmers, not able to manage a good lifestyle? Tobacco is a sin product, Govt. collects the maximum profits from this product. A concentrated industry, a product with few lakhs tonnes of output. Why couldn’t Govt. test its “One Market” theory on tobacco. It is not an essential commodity. Tobacco is prohibited in Sikhism, so I have never tried to understand the crop even.
Finally he comes to Loan Waiver scheme, before for every State’s election, loan waiver is an election issue, for every farmer’s vote. It is waived to some extent. Farmers waiver is a fraction of the loan waiver’s given to Corporates. Lakhs of farmers take benefit of loan waivers. All these waivers are taken by the farmers, who are already part of the open system of free market. Or outside the MSP system.
Govt. (neither Congress nor BJP) brought any policy to bring the sustenance of farmer under any system. Only MSP was the way, under which farmer is assured of security for his produce. Our PM announced cash dole of Rs. 75,000 Crs to 12.5 Crs farmers of Rs. 6,000/- each under Pradhan Mantri Kissan Samman Siddhi, he said, what does it mean, it only means, Govt. is buying the farmers vote for Rs. 6,000. He said, it is gentle reminder, BJP introduced it, Congress will follow it up. Cheap way to wash your hands to find the tenable solution to the farmers. He questions, what is Samman in giving free cash hand outs to farmers.
Three laws are a humble attempt of the Govt. to gobble up the votes of farmers for farm loan waiver. It will be regular fair of every 5 years in every State. The only benefit which will accrue from these farm laws, that farmers will now be borrowing more from Bank than Arhtiya, to allow them to avail farm waiver to his maximum capacity. My income will go down, there cannot be One Market for agriculture/horticulture. The house is open for all political parties, whosoever offers the higher bidding of farm loan waivers and markets it well, will emerge as winner. Farm output will go down. The cycle of economy which begins from the crops harvested by the farmer from the earth has been hit on the head with his own hull.
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