NOT long ago, a little over 40 years back, farmers would invariably get cheated at the time of the harvest. The traders — wholesalers and retailers — would rip them off. Farmers were paid low prices at the time of harvest, and distress sale was a normal phenomenon, rather than an exception. It was only after the Green Revolution began in 1966-67 in India that the government provided farmers with procurement prices and an assured market. Minimum support prices for wheat, rice, cotton and other crops helped farmers earn a remunerative price based on the cost of cultivation. At the same time, mandis were created in the Green Revolution belt of the country to provide an assured market for the farm produce.

It is primarily because of the procurement systems that were built over the years that food production has been on an upswing, and food inflation has remained within manageable limits. India hasn’t faced the kind of inflation in food prices as many developing countries have in the past, and, therefore, there is a sense of complacency that has set in. We therefore fail to appreciate the important role the two planks of food strategy — procurement price and registered mandis — have played in keeping famines away.

In the early 1980s I remember visiting Brazil which was then faced with a horrendous 440 per cent inflation. I stood in a line to buy bread in the morning, and there were some 20 people ahead of me. By the time my turn came, bread price had risen three times. In India, it is primarily because of a robust procurement system that food has not only remained within reach of a large section of the population but has also been carried to distant places to be delivered to the poor through the public distribution system.

I am afraid the comfort the nation has enjoyed on the food front will not last long. The Planning Commission as well as the Ministry of Agriculture are keen to dismantle the procurement structures, and are looking for an early opportunity to hand over the mandis to private companies.

I can understand the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industry (CII) demanding it. But when the Deputy Chairman of the Planning Commission Dr Montek Singh Ahluwalia starts speaking the language of an industry lobbyist there is reason to feel alarmed. Montek had recently called for removing horticultural products — vegetables and fruits — from the ambit of the Agricultural Produce Marketing Committee (APMC) Act.

In an interview, Ahluwalia says that the APMC laws must be amended to free farmers from the markets controlled by a few people and provide them access to consumer markets directly. He wants all horticulture products such as onions, apples and vegetables to be exempted from APMC laws, and adds: “Licences for participating wholesale buyers — who are required to pay a transaction or mandi tax — are concentrated in a few hands. In the present scenario, these markets are not a free buyer-seller platform. Farmer should be allowed to sell to whosoever he wants to.”

This may sound as if Ahluwalia is trying to help the farmers, but in reality his suggestion will come at heavy price for the farmers. There is no denying that over time some problems have cropped up in the way the mandis operate. What is not known is that the APMC laws have the provisions to effectively regulate these mandis. But rarely has the government stepped in, and in fact it is because of the political cover to the powerful middlemen coterie that the entire mess has generated.

But to take away horticultural produce from the purview of the mandis, and that too after the 2005 amendment in the APMC Act had allowed the private buyers to bypass the mandis and purchase wheat and rice directly from the farmers, is primarily aimed at killing the procurement system. In other words, Mr Ahluwalia is very cleverly suggesting destruction of the very foundations of food self-sufficiency built so assiduously over the past four decades.

The 8-point plan that the government had spelled out some days back to control inflation too says the same. I don’t know how many people could grasp the real meaning of what is cleverly hidden in the garb of steps needed to control inflation. In my understanding, food inflation is being used to justify the dismantling of the very foundations of food security. It is actually passing on the control of food into the hands of a few big players, who can then manipulate the prices at will. The nation needs to understand the dangerous game being played.

It is completely wrong to blame the APMC laws for food inflation. If this is true, then why did the domestic food prices in India remain low in 2008 when the world food prices had hit the roof, resulting in food riots in 37 countries? Even now, global food prices are on an upswing especially that of sugar and oilseed crops. Why are the global prices rising when internationally APMC Act does not exist in any of the major food exporting country?

Let us not forget, in 2006-07, after the APMC Act was amended, companies like Rallis, Hindustan Lever, ITC, Australian Wheat Board and Cargill had purchased wheat directly from farmers. This happened at a time when there was no shortfall in domestic production. But because the companies purchased directly from farmers, the government godowns remained empty. To meet the requirement for PDS, India had imported roughly eight million tonnes of wheat.

Imported wheat came at a price that was much higher than the domestic prices. Subsequently, Ministry of Agriculture warned the private companies to stay away from making direct purchases from farmers. After 2007, private trade refrained from buying wheat and rice directly from farmers. If the direct purchase was so good, why did the Ministry of Agriculture issue an order forbidding it?

Buyers in the mandis have to pay on an average 10 per cent as the mandi transaction tax. This may be a little higher for some vegetables and fruits. The tax collection helps in the maintenance of the mandis. For instance, 70 per cent of the total expenditure of the Punjab government on its mandis comes from the tax collections. Taking out wheat, rice, vegetables and fruits from the APMC Act means that the mandis will collapse.

Procurement prices and the network of mandis have helped farmers realise a fair and better price for their produce. This system needs to be improved and strengthened, not dismantled.

The writer is a NewDelhi-bsed food policy analyst.