AIKMS : Govt.’s ECA, Contract Farming measures; MNCs control, black marketing, inflation to rise

Press Release – 04.06.2020

Central Govt’s latest 3 ordinances passed yesterday are akin to a triple murder of peasants, farm labour and consumers in one go. They will seriously jeopardize small farmer production, small survival savings of peasants, agricultural wages and food prices.

The “Essential Commodities Act” was established to “ensure the delivery of certain commodities or products, the supply of which if obstructed owing to hoarding or black marketing would affect the normal life of the people”. It has “powers to control” production, stocking, supply, distribution and reasonable and fair prices.

The govt. has removed food grains, pulses, oilseeds, onions and potato from being covered under the ECA. This will allow giant companies to procure, hoard, process, sell at monopoly prices and also export freely. With MSP rates becoming non-profitable, procurement being reduced, FCI having a debt of Rs 2.25 lakh crore and plans for privatization, the govt will neither have any security to supply food, nor will it be left with control over private companies and exports.

In the name of One Nation, One Market, the govt. has also passed the “Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 to allow barrier free trade in agricultural produce. Along with proposed eNAMs this will allow companies free access to buy at the cheapest price, which will lower the general prices for the crop at the time its harvest, when farmers need protection from private hawks.

The third move on contract farming, the Farmers Price Assurance and Farm Services Ordinance, 2020 will along with companies will ensure empowerment of landlords and middlemen and further undermine share croppers, landless and farm workers who will be deprived of even the right to get land on rent and share. This entails pooling of land by a local, forming of Farmer Producer Companies and a role of an Aggregator who will aggregate land and crops to help sales.

In terms of service to Big Landlords and Big Corporations – MNCs and Indian, these measures of Modi Sarkar are truly historic attack on the people of India.

Neo liberal policy has been attacking the MSP, govt. procurement and PDS distribution which it wants to convert to cash transfer (DBT) so that all PDS beneficiaries are forced to buy from the market. The govt itself has been advocating reducing the food subsidy expenditure, which has already been reduced in absolute terms by almost Rs, 17,000 crores since Modi govt. came to power. It was around Rs 1,25,000 crores in 2015 and has dropped to Rs 1,08,000 crores last year.

Recent MSP hike declared by the govt. two days back is a façade as it hardly covers even the current increases in costs. It is based only on paid up costs and it ignores the actual labour costs, depreciation, land rent and debt costs. It lowers costing to show high margin in profit. The increments are only 3 to 5 % over last year, hardly covering even the inflation rate.

While the govt. has been the main procurer for food grains and pulses, it regulated the markets, including exports and imports in case of onions and partially for potatoes. These form basic food ingredients of the poor people, who spend most of what they earn on food, as they have little to spare for any ‘luxury’. This is a very serious attack on the poor.


V. Venkatramaiah                                                                                           Dr. Ashish Mital

President                                                                                                        General Secretary

AIKMS                                                                                                                 AIKMS