Bihar records growth in farm yield post-APMC Act but farmers unhappy

With angry farmers laying siege to the national Capital in their ongoing protest against the three new farm laws, Bihar Chief Minister Nitish Kumar’s 14-year-old decision to scrap the Agricultural Produce Marketing Committee (APMC) Act and how it has played out provide a peek into the agrarian angst.

Nitish came to power in 2005 and repealed the APMC Act in 2006. So what does that mean and what was the new system in place? It means shutting down the mandi (wholesale markets for agricultural produce) system. After the abolition of APMC Act in the state, the Bihar government had introduced Primary Agricultural Credit Societies (PACS) as a designated agency for the procurement of paddy. There are roughly 8,500 PACS across the state.

To cut the story short, how has the state fared since then and how farmers feel about it? The agricultural productivity in the state has shown growth, data tells. But the response from farmers on the ground is not overwhelming.

In 2006, Bihar was the first state in the country to abolish the APMC Act which facilitated private companies to directly purchase from farmers. Under the APMC Act, the local municipal bodies used to charge 1 per cent of the selling price, both from the farmer and the purchaser.

The reforms have not been very beneficial for them, claim farmers as they have to sell their produce to private companies at throwaway prices.

Growth in agricultural yield

However, the agricultural productivity has increased. Between 2011-12 and 2018-19, India’s growth rate was 7.5 per cent while it was 13.3 per cent in Bihar.

According to Bihar government’s department of agriculture, wheat production in 2005-06 was 1,379 kg per hectare which rose to 2,797 kg per hectare in 2012-13. In 2018-19, the wheat production was 2,998 kg per hectare.

In 2005-06, rice production in Bihar was 1,075 kg per hectare which rose to 2,523 kg per hectare in 2012-13. In 2018-19, the rice production per hectare was 1,948 kg per hectare.

Rice production in 2014-15 was 2,525 kg per hectare, 2,104 kg per hectare in 2015-16, 2,467 kg per hectare in 2016-17, and 2,447 kg per hectare in 2017-18.

Maize also witnessed a growth in its production. In 2005-06, it was 2,098 kg per hectare which increased to 3,975 kg per hectare in 2012-13. The maize production in 2018-19 was 4,771 kg per hectare.

Bihar is among the leading producers of maize in India, the fourth largest producer of vegetables and the eighth largest producer of fruits in the country. Around 70 to 80 per cent of the population is involved in agriculture in Bihar.

Problems galore for farmers

Farmers don’t quite seem happy. There are a majority of farmers who claimed that after the abolition of APMC Act, middlemen and local traders were making huge profits by buying the farmers produce even below the Minimum Support Price (MSP).

“The idea of the Bihar government was to procure farmers produce through PACS at the rate fixed by them to benefit the farmers. The idea was to eliminate middlemen from the system. However, in the last 14 years, no PACS member has come to me to purchase the produce. Small farmers who produce 2-4 quintal grain do not go to PACS and prefer to sell to middlemen,” says Mani Kumar, a small farmer from Muzaffarpur.

Another farmer from Muzaffarpur, Bal Mukund Sharma, says the farmers face a lot of problems in selling their produce to the government as they are several criteria like the payment system which generally gets delayed.

“Minimum support price for paddy fixed by the Bihar government is 1,868 per quintal but farmers are selling their produce to middlemen at 1,100 per quintal. The problem in selling our produce to the government is that we do not get paid on time and there is a huge delay,” says Bal Mukund.

When PACS is not able to purchase the produce of the farmers, local traders come into play and make huge profits. Farmers are compelled to sell their produce to local traders to avoid losses.

“When the government fails to procure foodgrains from farmers on time, then farmers are compelled to sell their produce in open market to local traders,” says Manoj Chowdhary, a local trader in Begusarai.

‘No change in farmers’ condition’

Economist DM Diwakar, associated with AN Sinha Institute of Social Studies, claims if what the Narendra Modi government has done now was implemented by Nitish Kumar in 2006, why has the condition of farmers in Bihar not improved in the last 14 years?

“Rather than scrapping the APMC Act, it should have been strengthened. More than 90 per cent of farmers in Bihar are small and marginal and if they will not get the support of the government, they will be in distress. They do not even get back their investment and this is the result of abolishing APMC,” says Diwakar.

Diwakar informs that at present paddy is sold for 900-1,000 a quintal in Bihar against the MSP of 1,868 fixed by the Centre.

Nitish Kumar recently reacted to the ongoing farmer agitation in the national Capital and said farmers would not face any kind of problem in selling their crops after the three farm bills were implemented by the Centre.

“We had introduced the present system which is being brought by the Centre in our state in 2006. I think the farmers will benefit from the new farm laws,” said Nitish.

It seems Nitish’s decision doesn’t appear to have helped farmers.

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