[nonamechicken]

I share the same fear farmers have in regards to corporations taking over things. I have seen documentaries that talks about how chicken farmers are at the mercy of 3-5 corporate monopolies in USA. So I don't know if the Indian farmers fear about corporations are entirely wrong.

Having said that, I think the new laws are good for India. These are the arguments I have heard in favor of the new laws:

One of the main arguments against the farm bills is that it will remove the minimum support price (MSP) guarantee which the government gives the farmers, and will put them at the mercy of corporations. India introduced the current MSP related system back in 1960 to inspire farmers to grow some crops when India had a huge shortage of food grains, and was importing grains directly from US (referred to as 'ship to mouth'). That is not the case now. India actually has a surplus of those grains.

Also, MSP covers only 23 crops produced in India. For example, onion prices dropped to insanely low prices last 2 years. There is no MSP for them.

Also, the MSP cover is available only in certain states, which puts other states at a disadvantage. To make things complicated, there is a law that guarantees certain grains at low price for the poor. For example, the law guarantees rice at 3 rupees to the poor. Govt has to buy the rice from the farmers because of the MSP system (say at Rs 20), and then in turn sell them to the poor at Rs.3 in a state which doesn't have MSP, thus putting the farmers in the non MSP states at a huge disadvantage.

Another reason is that farmers are producing huge amounts of MSP crops such as wheat because the price is guaranteed, while ignoring other crops that India has to heavily import (such as pulses and oil seeds). The govt has to purchase the MSP grains no matter what, and the godowns have way more in stock than India could distribute (almost double or more last year).

Also, some of these MSP crops like rice require lot of water for cultivation, and considering the shortage of water in most places in India, govt wants to reduce the farming of such crops.

I got most of these info from this video (I believe this channel is neither right wing or left wing): https://www.youtube.com/watch?v=B9hSADKW3Cc

[manishsharan]

>>Also, some of these MSP crops like rice require lot of water for cultivation, and considering the shortage of water in most places in India, govt wants to reduce the farming of such crops.

This is very a important point. Most farmers who are protesting are from the province of Punjab . However, their choice of crops and farming methods is leading to depletion of undergroup water and not sustainable in the long run.

https://www.thehindu.com/news/national/other-states/paddy-tu...

Also, historically speaking -- Punjab farmers never grew rice as paddy cultivation uses a lot of water. Thanks to government subsidies, Punjab is now a prolific producer of rice and this has had a major impact on water table.

[sudosysgen]

If that's the main concern, one may simply change the MSP crops not to be so water intensive. Completely removing the system clearly has other goals in mind.

[nonamechicken]

Looks like fault lies partly with the government. Even though there are multiple crops with MSP, govt has been procuring only wheat & paddy in Punjab.

This is according to an interview with an agricultural economist regarding the issues in Punjab. See timestamped note below at 10:31 where he talks about this. Its in Hindi. Given below are the main points that caught my attention, time stamped in case any one wants to check it out. https://www.youtube.com/watch?v=nZGUBIdT6PM

Edit: Full interview available here as text: https://theprint.in/india/governance/save-punjab-from-desert...

___

If the current system of mono culture (paddy/wheat) continues, the land of 5 rivers (Punjab) will face desertification in 20-30 years, says one of the most prominent agriculture economists in India Sardara Singh Johl.

[5:55] Our current food grain production is 3 times that of the optimum buffer stock norms. Disposing of these stocks is a problem, as due to MSP, our crop is more expensive than international crops. The central government has to dispose of the stocks internationally, sometimes even lower than the public distribution price of Rs. 2-3 per kg. But that too is rejected on the ground of high chemical content in crops. We have moved from a problem of deficit to a problem of surplus.

[7:11] Land holding per farmer has decreased to a very small unit per person. This made agriculture non profitable. Farmers resort to borrowing money at higher interest from money lenders which in turn pulls them down further.

[10:31] What led to paddy/wheat mono-culture?

MSP and free electricity made paddy/wheat the most profitable. Even though there is MSP on other crops such as maize, pulses, and oil-seed, government doesn't procure them as much compared to paddy/wheat. Govt procures only paddy/wheat plus a little cotton.

[12:20] The MSP system has led to a cropping pattern out of sync with the consumption pattern. Other food grain production has crashed, as has fruit and milk production.

[12:55] The biggest problem in Punjab is the fall in water level, and its pollution because of the use of fertilizers. Punjab has the highest use of fertilizer per unit of land in the country, and the water table is decreasing 25-30 cm every year. With the Bhakra Dam, a lot of water was diverted to Delhi & Haryana. Punjab's allocation fulfills just 20% of its agricultural needs, so ground water accounts for the rest. With increasing urbanization, rainwater is not absorbed into the ground as everything is concrete now. Water that is absorbed from farmlands is high in pesticides & fertilizers, polluting the ground water. Nowadays, drinking water in Punjab can only be found at 350-500 feet with a deep tube-well. In 2 or 3 decades, groundwater for drinking might not be available. Punjab will become a desert if this continues.

[22:20] Solution to Punjab's crisis.

Economic diversification of crops is necessary. I've given 2 reports, in 1986 and 2002, proposing to maintain the water balance of Punjab. In 2002, 16 of my fellow committee members proposed to bring at least 10-15 lakh (1-1.5 million) hectares of land out from under paddy cultivation. Compensate farmers for growing other crops. How do we compensate? At that time, India imported Rs. 14000 crore worth of oil-seeds and pulses. We proposed utilizing Rs 1600 crore for compensating farmers for growing pulses and oil-seeds on 10 lakh hectares of land. Unfortunately, the plan didn't fully materialize.

[27:20] Now, the govt can give Rs 10000 per hectare to farmers to encourage the diversification of crops. MSP & procurement should be provided to other crops such as maize, cotton, oil-seed and pulses. Move the cultivation of wheat and paddy out to 50 lakh hectares of land in the Gangetic plains of Uttar Pradesh, Bihar and West Bengal.

[28:00] Future of subsidies

No farm sector in the world can survive without subsidy. USA, Japan and European countries provide billions of dollars to their farmers. They get subsidy even with farms as big as 1000-1500 acres. But Punjab's free electricity subsidy is wrong; its misused. Farmers will not do this if they are made to pay for it, and will lead to judicious use of water. Subsidize the small farmers in other ways (in a way recommended by WTO).

[Then they talk about contract farming part of the new farm bill. I skipped that.]

[markdown]

You keep using MSP, but haven't said what it is.

[nonamechicken]

Sorry, I just copy pasted from another post of mine where we were talking about MSP.

MSP means minimum support price. Its a guarantee from the government to the farmers that the government will buy the crop at a certain minimum price no matter the market situation is. For example, MSP for 1 kg rice may be rupees 20. If the farmers can get a higher price in the market, they can sell it at that price. But if the market price fell for some reason (over production for example), government will buy it from the farmers for rupees 20. This guarantees that the farmers will not be at a lose.

MSP made sense when India had issues with rice and wheat (the video I linked talks about its origins in India at 5:00). Since MSP is guaranteed for some crops (such as rice and wheat) and not for others (such as pulses which India has to import), farmers would naturally make more of the MSP grains.

Also, do note that the farm bills doesn't remove MSP as far as I understand. One scenario farmers argue is this: Farmers get MSP when they sell in government run markets. Now, with the new system, farmers will get more money since they would be selling directly to the companies without any middlemen. If I understood correctly, the new system removes middle men (whom I have heard makes huge profit while paying very less to the farmers). Once the farmers starts selling directly since direct sale gets them more money, no one would go to the government markets any more. So, after a couple of years, government will close those markets since they are not in use. Now, corporations will start offering lower prices to farmers, and farmers will have no place to go. This is one argument I have heard of what could go wrong. But seeing all these protests, I have been thinking why can't farmers dictate the price if they have this much bargaining power.

[markdown]

Thank you. Great explanation.

> why can't farmers dictate the price if they have this much bargaining power.

They have political bargaining power, but don't have much bargaining power in the market. This is because most crops are perishable goods. Even with crops like rice (which can be stored by the farmers for an extended period), farmers can't afford to hold on to the goods for long... they need cash to survive.

[nonamechicken]

That's a very good point. Thank you.

[rdedev]

Minimum Support Price. The government buys certain crops at a minimum rate from the farmers to protect them from sudden market fluctuations

https://en.m.wikipedia.org/wiki/Minimum_support_price_(India...

[rsj_hn]

Interesting. Is there a maximum price as well to support those who buy food? Usually when you are talking about agriculture, the big risk is in a sudden supply collapse leading to price spikes, not a sudden supply explosion leading to price drops.

[boruto]

There are laws against hording. Currently government is the biggest seller of grain charging 3 cents per a kilo.

[selimthegrim]

Minimum Support Price

[braindead_in]

It is a communist price control tool to keep the peasants poor and under the thumb of the state.