Indian agribusiness has truly been beset by obsolete laws which seemed well and good when markets were shut and there was requirement for state intercession to guarantee that farmers and shoppers were secured. This prompted the prospering of mediators called adathiyas. The adathiyas purchased the crops from farmers and made a commonly helpful environment with them by giving facilities such as coordination, credit availability and buyback option, consequently making it a framework which functioned admirably. All exchanges henceforth occurred in the customary method of offering.
The mandi framework has functioned well for all these years where farmers carried their produce and offered to the brokers who in return would keep the produce moving all throughout the nation. The mandi collects its charge from the buyer and the framework works effectively. However, the farmers didn't get the best value which clarifies the wide disparity between the mandi and retail prices. Someone who wants to purchase the produce needed to go through the mandi framework or look for the state’s consent to purchase straight from the farmers.
The new set of laws wants to revolutionize the way of marketing. It will allow the meeting between the buyer and seller to happen outside the mandi. There won’t be any taxes and therefore the mandi fee is out of the equation. The transaction between both the parties can happen at a mutual price point. Hence if the farmer thinks that the price in the mandi is better, he can go for it and there is no need to go outside. There should not be any complaint against a system which provides freedom to both parties.
But everybody does not agree with the change. For example, mandi will lose its predominance if transactions happen outside the mandi. The argument behind this opposing is the need for money to run the current facility. Farmers selling outside mandi will cause the system to collapse. Also if the mandi system becomes obsolete, private firms can create monopoly and offer lower prices to farmers. The best possible solution being the coexistence of both the systems. To counter farmer's concern, Govt. has assured that the MSP system will not be removed.
The next law is regarding contract farming. The law allows contracts to happen between the farmers and private firms. Which are optional on the farmers part and is not binding in nature. Commercialization in India requires more involvement on the private sector's part. This can only happen if contract farming is universally accepted. The private entity will offer guarantee on prices for buying produce from farmers along with other offerings such as credit etc. making it a perfect system. If the farmer's find the contract viable and enter the same, in that case the contracts will be drafted and signed making it legally binding.
Some argue that the farmers will suffer if they opt this system. The corporate will provide good value at first and gradually decline as the mandi system becomes obsolete. This is not a valid point as the same did not happen in the other areas where corporations are involved. On the contrary, it is the other way around, where farmers are absconding credit.
Thus, both these changes are welcome, and the protests are incredibly speculative as the legislature has just opened the entryways for options and not made anything obligatory.
Essential Commodities Act puts limitations on the holding of agri items as stock at both wholesale and retail levels. The thought is useful for a shortfall nation, however for India this sounds very old-fashioned. The issue is that there is a distinction between stocking an item and storing the equivalent. As most yields are developed once per year and made accessible for a year it must be held by the middle people. Hence, the issue gets dubious and there has been a propensity for them to be punished. By getting rid of this law, the market turns out to be all the more deliberate and traders can direct their business without being fearful of becoming the subject of lawful activity.
While all the changes sound positive for the cultivating network, one must be calculated in expectations as while the entryways have been opened, it would not be the situation of all farmers utilizing this course. The current mandi framework is prevalent and moving to new frameworks is consistently a test. Be that as it may, with corporate India having a choice, one can anticipate that more activities should be taken which will bit by bit help in commercialization of horticulture.
