More stories

  • in

    Hemp: the green crop tied down by red tape in the US

    Hemp: the green crop tied down by red tape in the USStalky plant is not approved as a livestock feed, holding back a sustainable industry that could invigorate agricultureKen Elliott runs a hemp oilseed and fiber processing facility in Fort Benton, Montana. His company, IND Hemp, grinds up the stalky plant so that it can be used for a variety of purposes, such as snacks, grain, insulation and paper. About 20 truckloads of spent biomass lie in heaps on his property.Elliott estimates he could make a couple million dollars if he sold this leftover stuff as livestock feed. Hemp seedcake would make a great substitute for alfalfa – rich in fatty acids, proteins and fiber. His cattle rancher buddies are hit hard by the soaring costs of hay and would love to get their hands on this alternative. One buffalo herder wanted to buy the whole lot.But Elliot can’t sell to them. He can’t even give it away for free. That’s because when the 2018 Farm Bill took hemp off the list of controlled substances, hemp as commercial livestock feed was not approved.‘Filling in the gaps’ for food access: women-run farms rethink California agricultureRead moreThe Food and Drug Administration (FDA) has approved hempseed and its meal and oil for human consumption. A variety of hemp snacks for pets are allowed on the market, because they don’t constitute the main part of the diet. But you can’t give hemp as feed to farm animals that produce eggs, meat and milk for sale, until tests prove it is safe and nutritious to pass along the food chain.In other words, Elliott can serve hemp products to his baby grandchild. Or to a cat. But not to 2,000lbs steer. And that’s bad for the American farmer, he says. “Some of these guys have to sell their cattle and five-generation farms because they can’t afford hay and barley,” Elliott says. “Why wouldn’t you want to help them?”Hemp industry advocates say this ban on livestock feed not only denies livestock farmers necessary relief, but is also denying the $80bn American feed sector an inexpensive product during a time of global grain shortages. And it is hindering a nascent green industry that could invigorate American agriculture while also saving the environment.The type of hemp in question is not the flowery plant that yields CBD. The bamboo-like “industrial” variety processed by Elliott has greater potential to be a commodity. Its woody core, grain (seeds) and fiber have 25,000 uses. They include dietary ingredients, textiles, biofuel, bioplastics, mulch, lubricants, paints and construction materials.Industrial hemp is also a dream sustainable crop. It requires less water than similar plants and sequesters carbon. It can grow in nearly every climate, with up to two harvests a year. Hemp also regenerates the soil, absorbs toxic metals and it resists pests, mold and fire.But this sector is stymied by the federal government’s linkage of hemp to its cousin, marijuana. Both come from the cannabis sativa plant, but industrial hemp has none or negligible quantities of tetrahydrocannabinol, THC, the main psychoactive compound in marijuana.Nonetheless, hemp is highly regulated. Growers must be fingerprinted and background-checked. They must spend thousands of dollars for tests that prove their harvests contain less than 0.3% THC. Anything above that fraction must be destroyed.Further burdens are placed on those seeking approvals for commercial hemp livestock feed. (So far none have been granted on the federal level.) Manufacturers complain that with only a dozen FDA officials processing requests, applicants can wait up to six months for a response or for questions, which when answered require further waits. The process can take years.“The FDA responds to requests with very resistant language that creates a long back and forth,” says Andrew Bish, a harvesting equipment entrepreneur from Nebraska who helms the Hemp Feed Coalition advocacy group. He added that funding the clinical trials to prove safety can cost hundreds of thousands of dollars.Moreover, separate testing must be done for each species that would eat the feed. Data involving dairy cows, for instance, won’t suffice for beef cattle. Different research is required for chicken broilers and egg layers, and trout versus salmon.The FDA approval group is “woefully understaffed with a backlog of work”, Leah Wilkinson told a webinar in August that brought together regulators, hemp companies and university researchers. She is the vice-president of public policy at the American Feed Industry Association.“Many of these ingredients are stuck in an antiquated regulatory review process at the FDA, which has resulted in the US trailing its global competitors in bringing these products to the market.”Regulators on both the state and federal levels defend the process, however. They say animals metabolize food differently from humans, so a person snacking on hemp seeds might process the ingredient differently than a goat subsisting on it every day.“I understand the processors’ standpoint,” says Ian Foley, a plant regulatory official with Montana’s department of agriculture. “It’s a difficult burden to sponsor and pay for research. But the product must be beneficial as well as not cause harm. Everyone wants the safest ingredients, and I don’t think we’re there just yet.”While the US government treats hemp as a new product, it was historically a staple crop in America from the 1600s onwards, thriving especially in Kentucky. George Washington grew it. A draft of the Declaration of Independence was on hemp paper. But the 1937 Marihuana Tax Act debilitated the once-thriving industry, and then the 1970 Controlled Substances Act essentially killed it.With decriminalization five years ago, the industry had to jumpstart from scratch.This has cost the US market share in a global market estimated at more $4bn and expected to grow to over $17bn by 2030. Canada, China and Europe (particularly France) are big players. The US produced merely $824m worth of hemp in 2021, the last available figures.Stakeholders say that the animal feed issue is particularly stymying the industry.The only way around stringent federal restrictions is to win consent on the regional level, but the products cannot be transported or sold across state lines. Kentucky has approved feeding hemp-seed meal and oil to chickens and horses. In Montana, it can be given to non-production animals. Tennessee requires informing consumers in writing if hemp adulterants are added to feed.‘When in doubt, plant a nut tree’: the push to seed America with chestnutsRead moreThe Wenger Group of Lancaster, Pennsylvania, managed to get state approval to sell feed for chickens. Wenger, which produces about 2m tons of feed a year, first had to invest $400,000 to do a hemp feed study on the nearby Kreider Farms involving 800 hens and 120,000 eggs.The data found that hemp feed produced healthy yolks and weight, with no THC residue. “It was absolutely compelling and convincing that the ingredient was safe,” says Raj Kasula, the chief nutrition officer for Wenger.But getting the green light to sell was “unduly” time-consuming. “The process was delayed by objections and questions which were not worth the delay,” Kasula says. “Each time they come with a new set of questions. To their credit they are being very thorough but it’s a source of frustration.”Still, experts see hopeful baby steps and believe the first federal approval for egg-laying hens might come within a year.The US Department of Agriculture (USDA) has granted millions of dollars for clinical studies into hemp as animal feed through its National Institute of Food and Agriculture office.Panelists participating in the August webinar included scientists from universities across the country, including Texas, North Dakota, Ohio and Kentucky. They saw great potential for livestock, horses and fish.“I was blown away,” said Massimo Bionaz, an associate professor of dairy nutrigenomics at Oregon State University. “It has good fiber content, the protein is at the level of alfalfa, even better. We found it’s safe to feed this to animals.”Even if it won approvals for feed, the hemp industry must convince farms farmers to grow industrial hemp, says Bish. After the 2018 legalization, most hemp growers planted the CBD type. Many went bust due to an ensuing glut and are reluctant to pivot to industrial hemp even though it has more potential as a cash crop.How America’s most enigmatic fruit is making a comebackRead moreOne reason is the paucity of processing facilities. What with soaring freight costs, the handful of facilities that are scattered across the country lie too far away for most farmers to transport the bulky product. Prospective processors baulk at investing in multimillion-dollar machinery without enough raw supply of hemp.“It’s a chicken and egg story, so there’s no economy of scale,” says Bish.Hemp stakeholders are pinning hopes on Congress, which is due to renew the Farm Bill this year. They are lobbying for exemptions to make it easier to produce hemp fiber and grain, such as lifting the 0.3% THC limit. They also seek more Congressional funding to boost the number of FDA staff processing feed applications.Meanwhile, progress remains glacial. “I would like to see more collaboration between the FDA and the industry to come up with clear guidelines to make the application process more efficient,” says Kasula. “Other countries are moving forward, and we need to reinvent the wheel.”TopicsAgricultureCannabisUS politicsMontanafeaturesReuse this content More

  • in

    After a Difficult Year, US Farmers Are Pessimistic

    Debt is of great concern to many American citizens, despite the Biden administration’s selective efforts at debt forgiveness. While high and trending upward, debt has at least remained relatively stable over the past year.

    Market concentration, on the other hand, is a more pernicious issue. More than half the value of US farm production came from farms with at least $1 million in sales in 2015, compared to only 31% in 1991.

    The consequences of consolidation become apparent in the sales of various agricultural products. For example, in 2000, the biggest four companies sold 51% of soybean seeds in the United States. By 2015, their share rose to 76%.

    What Yemenis Can Learn From the Indian Farmers’ Protests

    READ MORE

    “The agricultural industry is different than other industries because Capper-Volstead allows them to combine in ways that other individuals would go to jail for,” says  Allee A. Ramadhan, a former Justice Department antitrust attorney who led an investigation into the dairy industry. The 1922 Capper-Volstead Act was a law originally designed to protect producers by allowing them to secure their interests through cooperatives. Unfortunately, it has resulted in the perfect conditions for heavy consolidation by the largest companies.

    Consolidation doesn’t just impact prices, but it also contributes to US agriculture’s declining competitiveness. That is why agriculture was included in President Joe Biden’s executive order on competition last July, in which he declared that the “American promise of a broad and sustained prosperity depends on an open and competitive economy.”

    Fertilizers and Destabilizing Forces

    In addition to the structural concerns for US agriculture, there have been further destabilizing factors since 2020 due to the COVID-19 pandemic. Not only did the health crisis remove domestic outlets for agricultural products due to repeated lockdowns, but it also severely disrupted production. This was particularly in terms of available human resources, whether before at the farms or down the processing chain with the temporary closure of many slaughterhouses.

    Embed from Getty Images

    Aside from the impact of COVID-19, extreme weather has pummeled certain states, reduced production and caused billions of dollars in damage. The prices of many inputs are snowballing into other areas. Prices for urea have skyrocketed. DAP, the common phosphate fertilizer, has reached its highest price tag since the 2008 financial crash that led to the food pricing crisis.

    “As fertilizer prices continue to rise, farmers will either cut application rates, cut fertilizer entirely in hopes for lower future pricing, or cut other farm products to account for the bigger expected spend,” says Alexis Maxwell, an analyst at Green Markets.

    Some farmers are essentially holding out before buying for the next growing season, in the hopes that costs come down. But that is a risky strategy.

    Contributing to the destabilizing forces, recent countervailing duties against foreign fertilizer producers selling to the US market have cut supply. Chris Edgington, the president of the National Cotton Growers Association, said in late 2021 that the Mosaic Company petitioned for the tariffs and has since seen its share of the phosphate market grow from 74% to 80%, a near-monopoly. “There’s been a dramatic increase of fertilizer costs to the producer and that’s not looking to end,” he added. In general, the price increases for different fertilizers are not yet at the levels seen in 2008, but they could soon be even higher if they keep climbing.

    Uncertainty Due to the Ukraine War

    The war in Ukraine has added fuel to the fire regarding the uncertainties in the agricultural sector. The conflict has pitted against each other Russia and Ukraine, whose wheat exports account for more than 25% of the world’s supply. Now, these exports are at risk, as witnessed by the emerging food crisis in several North African and Middle Eastern countries.

    For instance, Tunisia imports nearly half of its wheat from Ukraine to make bread. In the country where the Arab Spring began in December 2010, Tunisians are worried there could be shortages of supplies and a repeat of bread riots like in the 1980s. Alarmingly, the Russian invasion of Ukraine has caused prices to rise to their highest level in 14 years. Yemen, Lebanon and Egypt are also beginning to be stricken by flour shortages.

    Unique Insights from 2,500+ Contributors in 90+ Countries

    The conflict has also led to the introduction of severe sanctions against Russia and Belarus, two of the world’s largest producers and exporters of fertilizers of all kinds, along with natural gas, an essential ingredient in ammonia production and a key component of complex fertilizers. Although the United States produces most of its own natural gas, fluctuations in world prices have a significant effect on the fertilizer industry. This only exacerbates the difficulties farmers currently face in obtaining inputs.

    Thus, while US farmers could look forward to a windfall of increased demand for their grain in the coming year, in the immediate future, they are simply faced with a further increase in production costs. Due to these added costs of inputs and the supply chain issues, US agriculture — especially the wheat industry — may be lacking the fertilizers needed to maximize yields, resulting in a decline in production and impeding its capability to respond to global demand.

    In a way, in the immediate and near future, the nightmare of 2021 is only worsening. For Arkansas farmer Matt Miles, “There’s no guarantee of anything being a sure thing anymore. That’s the scary part.”

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

  • in

    The right’s new bogeyman: that Biden will take America’s hamburgers away | Art Cullen

    First President Obama was coming for your guns. Didn’t happen. Then President Trump said the socialists were going to take away our energy. The lights are on after 100 days, although it got dicey in Texas for awhile (and no, wind turbines didn’t cause the ice storm).But whoa, Nellie! We hear a Hamburglar will steal your right to beef before you can say “pass the ketchup”.Since I don’t even own a BB gun, I was not alarmed by Obama. Since I barely have enough energy to get out of bed I ignored Trump’s warning. But I can get worked up if you have your eyes on my ribeye.Turns out Fox News had to eat crow and retract a story claiming that Joe Biden will foreclose your divine right to slay a fatted calf. It was a Big Lie like all the rest – that your property rights will be denied for the sake of the endangered Topeka shiner minnow; that the election was fraudulent, except in Iowa where Trump won in a rout; that Obamacare would divorce you from your doctor.This lie started in the Daily Mail, which of course would know exactly what the US secretary of agriculture is thinking. The Daily Mail insisted that meat consumption would need to be cut 90% to meet President Biden’s climate goals, citing part of a University of Michigan study.Meanwhile, here is what the secretary, Tom Vilsack, is really thinking about: cow burps and pig poop. He wants more cattle on grass as part of a system with reduced emissions resilient to extreme weather. He is proposing money for methane digesters on hoghouses to power farms and sell dry compost – and getting a ton of flak from the left for it.After Biden’s first 100 socialist days, Tyson is running full tilt cranking out pork and turkey from Storm Lake with non-union labor. Hoghouses are going up everywhere, spreading up the Missouri into South Dakota. Chicken hind quarters were only 69¢ a pound at the grocery store last week.There are a fair number of NRA members deeply suspicious of Obama and Hillary Clinton who also want cleaner rivers and lakes, more grass buffers for habitat and limits on livestock confinements. They know the difference between BS and apple butter.The ‘take away your meat’ scare belies the fear felt by Big Meat when its own system crashedAnd they sense the real threat to their way of life – including Saturday night sirloin – is an ossified oligopoly food system that teetered on the brink of collapse last spring when its workers were overcome by Covid. Meat prices shot up 50% when the Waterloo and Sioux Falls pork plants shut down for a week. There was no way they could let the squeal go out of Storm Lake. For the first time in my life, meat counters were empty. The system failed. We have wrung the diversity out of the food supply chain. Just a few producers and packers stand, and when one of them falls we are all the hungrier.The “take away your meat” scare belies the fear felt by Big Meat when its own, unsustainable system crashed up against its limits.Livestock can be sheltered humanely for efficient food production and better protection from disease. We can finish a lot more cattle on grass for the benefit of the planet. We can enhance food security with more diversity in production and open, competitive markets. Almost everyone in the midwest understands those basic facts.So when the meat scare is propagated it makes the messenger look stupid. It’s not going to sell, just like the idea that wind turbines kill geese. We know better.Eventually, the stupidity becomes obvious to the semi-zealous. The rush on bullets turned out to be a ruse from the ammo makers. It took a lot of shine off the gun lobby as the dues-paying members figured out they were getting played so prices could take a nice run. The organization’s membership dues are drying up accordingly.The more lies they tell, the worse they get.Eventually, people figure it out. Even the “QAnon shaman” who crashed the Capitol wearing a horn helmet realized he got duped when they didn’t serve organic in jail.Vilsack reassured the public that USDA loves it some more red meat. Biden gave a shout-out to cover crops in his address to Congress – foretelling a huge step in environmental progress broadly supported by agribusiness. In Iowa, Republicans and Democrats are working to strengthen small meat processors.Despite several fish kills from floods of manure in north-west Iowa rivers this spring, nothing will be done to prevent the next one. A meager fine will be assessed. People do care about that. They do care about antibiotic resistance and viral pandemics inherent in our system. They want reasonable solutions based on science and reality. When there is enough BS, they begin to think it stinks. That can have consequences.
    Art Cullen is editor of the Storm Lake Times in north-west Iowa, where he won the Pulitzer prize for editorial writing. He is a Guardian US columnist and author of the book Storm Lake: Change, Resilience, and Hope in America’s Heartland More

  • in

    Black farmers speak out against the 'festering wound' of racism in agriculture

    For the first time in US history, members of the House agriculture committee heard from Black farmers on the impact of systemic discrimination by the department of agriculture (USDA).Thursday’s hearing came on the heels of $5bn being allocated to socially disadvantaged farmers of color earlier this month as part of the coronavirus relief and economic stimulus package. The funding – $4bn for debt forgiveness, $1bn for other forms of support – is meant to account for generations of mistreatment of farmers of color by the USDA.“This festering wound on the soul of agriculture must be healed,” said congressman David Scott of Georgia, who was born on a farm in South Carolina owned by his grandparents and now serves as the first ever Black person to chair the committee. Black farmers offered familiar testimonies of racism in the industry and from the USDA. Sedrick Rowe, an organic peanut farmer in Georgia, spoke of crop buyers telling him they are done buying peanuts for the day when he shows up. PJ Haynie of the National Black Growers Council told of Black farmers getting by on non-irrigated land while their white neighbors used USDA assistance to irrigate theirs.Once making up about 14% of US farmers, Black farmers make up less than 2% today. Many were forced out by racist lending practices by the agriculture department that led to vast losses of land, income, profits and generation wealth. That wealth cannot be regained. Black farmers will never get the land they lost back. But the USDA seems to be trying to foster a renewed trust in the department.In addition to Scott’s landmark appointment in December, the USDA, perhaps as an acknowledgment of Tom Vilsack’s second term as agriculture secretary being met with disappointment by many Black farmers and leaders, named Dewayne Goldmon, former executive director of the National Black Growers Council, as the USDA’s first-ever senior adviser for racial equity. And, if confirmed, Jewel Bronaugh will be the first Black woman to serve as deputy secretary for the department.Still, Black farmers remain skeptical. “That’s all very much good intention. But the foundation of the USDA is crooked,” said Michael Carter, a Virginia farmer, of the seemingly reactive diversity efforts. “You can’t put a new roof on and expect the foundation to be straight again.”Scott asked Vilsack on Thursday how much of his time will be devoted to getting the $5bn in stimulus funds in the hands of Black farmers. Vilsack responded that he has no doubt his staff understands this is at the top of his list in terms of priorities.“This is a meeting I’ve been advocating for for 30 years,” said John Boyd Jr . “On behalf of every Black share cropper and Black farmer we thank you for finally hearing our cries.”But as president and founder of the National Black Farmers Association, Boyd said his phones were ringing off the hook with farmers asking when they will get the relief. By the end of the four and a half hour hearing, that rollout was still not clear. Boyd, who has advocated on behalf of Black farmers and brought issues of inequality to the forefront for decades, urged swift movement to implement this debt relief.“This should’ve been doing in the first place,” he said over the phone. Reminded of his own advocacy towards Thursday’s hearing, he remained resolute. “You don’t think about it. You got so many hurdles, so many fights,” More

  • in

    Biden's pick for agriculture secretary raises serious red flags | George Goehl

    It’s unlikely that Joe Biden expected that, of all his cabinet nominees, his choice for US agriculture secretary would cause the most blowback. Yet that is exactly what happened.The former secretary Tom Vilsack, fresh off the revolving door, is a kind of all-in-one package of what frustrates so many about the Democratic party. His previous tenure leading the department was littered with failures, ranging from distorting data about Black farmers and discrimination to bowing to corporate conglomerates.Vilsack’s nomination has been roundly rejected by some of the exact people who helped Biden defeat Trump: organizations representing Black people, progressive rural organizations, family farmers and environmentalists. If the Biden team was looking for ways to unite the multi-racial working class, they have done so – in full-throated opposition to this pick.We remember when Vilsack toured agricultural communities, hearing devastating testimony of big ag’s criminal treatment of contract farmers. He went through the motions of expressing concern, but nothing came of it: the Department of Justice and the Department of Agriculture (USDA) kowtowed to agribusiness lobbyists and corporate interests, squandering a golden opportunity to rein in meat processing monopolies.We remember when Vilsack’s USDA foreclosed on Black farmers who had outstanding complaints about racial discrimination and whitewashed its own record on civil rights. That’s in addition to the ousting of Shirley Sherrod, a Black and female USDA official, when the far-right media published a doctored hit piece, forcing her resignation.We remember when Vilsack left his job at the USDA a week early to become a lobbyist as the chief executive of the US Dairy Export Council. He was paid a million-dollar salary to push the same failed policies of his USDA tenure, carrying out the wishes of dairy monopolies. Despite being nominated to lead the USDA again, he’s still collecting paychecks as a lobbyist.The president-elect should have righted these wrongs by charting a bold, new course for rural communities and farmers in America. Instead, Vilsack’s nomination signaled more of the same from Democratic leadership.“Democrats need to do something big for rural people to start supporting them again,” Francis Thicke, a family farmer in Fairfield, Iowa, told us recently. “The status quo won’t work, and that’s one reason why Vilsack is the wrong choice.”Following Trump’s win in 2017, the organization I direct, People’s Action, embarked on a massive listening project. We traveled across rural America – from family farms in Iowa, to the Driftless region of Wisconsin, up the Thumb of Michigan, to the hills of Appalachia – and had 10,000 conversations with rural Americans. When we asked the people we met the biggest barrier to their community getting what it needed, the top answer (81%) was a government captured by corporate power. The Vilsack pick does nothing to assuage these concerns.As Michael Stovall, founder of Independent Black Farmers, told Politico: “Vilsack is not good for the agriculture industry, period. When it comes to civil rights, the rights of people, he’s not for that.”Mike Callicrate, a rancher from Colorado Springs, was equally direct. “Vilsack assisted big agribusiness monopolies in preying upon and gutting rural America,” he told us, “greatly reducing opportunities for young people to return and remain on our farms and ranches. His policy led to catastrophic rural decline, followed by suicide rates not seen since the 1980s farm crisis.”Biden had a chance to finally right some wrongs. Sadly, he missed the mark on this one by a country mile.• George Goehl is the director of People’s Action More

  • in

    India’s New Agricultural Policy After Decades of Farmer Suffering

    In India, June 5 was a turning point in the history of the country’s agriculture. The government passed three ordinances to unshackle farmers from the restrictive marketing regime that has managed the marketing of agriculture produce for decades. This sweeping stroke promises to bring the entire world of farming technology, post-harvest management and marketing channels at the doorstep of the farmer. The challenge now is to put these promises into action. The national vision of the farm sector is to double the income of farmers by 2022. This move is revolutionary since income is intrinsically linked to how the markets of the harvested produce function.

    First, the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance provides much-awaited freedom of choice to farmers and traders. Now, farmers can sell and purchase produce through trading platforms other than the notorious markets operated by the Agriculture Produce Marketing Committee (APMC). An article published on Fair Observer in 2019 rightly observed how forcing farmers to sell their produce to APMC markets led to the problem of monopsony. As the only buyer of produce, APMC markets faced no competition and offered farmers very low prices. This ordinance promises to increase farmer incomes significantly.

    360° Context: The State of the Indian Republic

    READ MORE

    Second, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance further empowers farmers by creating a framework for direct engagement with processors, agri-business firms and large retailers.

    Finally, the Essential Commodities (Amendment) Ordinance releases farm produce from the restrictions imposed by the Essential Commodities Act by severely curtailing regulations on farm produce. Such restrictions will now be permissible only under extremely emergent circumstances.

    The trigger for these sweeping changes may have been the disruption in the production and supply chains due to the COVID-19 pandemic. The health crisis and the resulting nationwide lockdown necessitated drastic steps to provide immediate relief to the agriculture sector. However, we must not forget that agricultural marketing reforms have been in public discourse for nearly two decades. In practice, they always appeared to take two steps backward for every step taken forward. Petty politics, instead of agricultural needs, dominated these decisions. Hence the officials of the Ministry of Agriculture deserve recognition. They have used a crisis as an opportunity to free farmers from the oppressive yoke of red tape, rigged markets and little choice.

    Poor Infrastructure, Corruption and Lack of Accessibility

    Before discussing the details of the three ordinances, let us briefly review the existing structure and context of the marketing of agriculture produce. The overarching legislations governing agricultural markets are the APMC acts of the respective Indian states. These were enacted with the laudable objectives of ensuring fair prices to farmers and safeguarding them from the exploitation of middlemen. They aimed to enable farmers to sell their produce easily.

    Embed from Getty Images

    These acts created the institution of the APMC, which operates agricultural markets commonly called APMC mandis, the Indian word for a market. Ironically, the APMCs have achieved the precise opposite of what their architects envisaged. In their enthusiasm to ensure stability, most state governments discouraged the rise of private mandis and even criminalized setting up competing markets. This created monstrous monopolies of APMC mandis controlled by influential cartels. Instead of offering fair prices to farmers, these mandis artificially manipulated prices. The management of APMC mandis remained opaque and exploited farmers while claiming to serve them. In particular, small and marginal farmers were at the mercy of wealthy traders at these markets.

    Unsurprisingly, the January 2019 report of the parliamentary standing committee on agriculture noted that the APMC acts had not achieved their purpose. With cartels at APMC mandis dictating the terms of trade, farmers face unreasonable deductions from the sale returns of their produce in the form of market fees, commission charges and other levies that rightfully should be paid by traders. On occasions, these farmers are charged the same fees multiple times. Corruption is rampant. Aside from a handful of exceptions, mandis tend to have poor infrastructure. Basic facilities for post-harvest management of agricultural produce such as grading, sorting and packaging are lacking. Supporting services, such as banks, post offices and resting places, have also failed to develop. If some facilities exist in some mandis, they are of extremely poor quality.

    Additionally, the number of such markets is grossly inadequate. The National Commission on Farmers has recommended that an agriculture market should serve a geographical area of not more than 80 square kilometers, whereas the existing national average is 496 square kilometers. Both the quantity and quality of APMC mandis are lacking. It’s tragic that an institution established to protect farmers from exploitation has become the source of it. It is for this reason that the parliamentary report recommended that creating alternative marketing platforms should be a priority. It observed that the APMC acts had led to restrictive markets and obstructed the emergence of competitive markets. Regrettably, the Indian farmer did not have the right to choose his customer thanks to the APMC acts.

    The APMC mandis tend to be noisy, messy, chaotic and unhygienic. So, it is no surprise that a large number of farmers, especially the small and marginal ones, do not sell to APMC mandis, but they do to intermediaries and unlicensed traders. Though there are no official figures available, various studies place the share of these informal intermediaries or middlemen at 30-55%. The figure is lower in the case of food grains but very high for horticulture produce.

    There exist, in many places, several layers between the farmers and the mandis. Thus, the safety net that these mandis aim to provide farmers is already diluted. The much-maligned middleman has become an integral part of the agriculture marketing system. One of the most significant aspects of the three ordinances promulgated on June 5 is to recognize and integrate these middlemen into a liberalized regulatory framework. Now, they can enter into bona fide trade relations with farmers.

    A New, Better Approach

    In 2003, the Ministry of Agriculture attempted reform after prolonged discussions. It came out with a model legislation for states to emulate: the APMC Marketing (Development and Regulation) Act, 2003. Curiously, the focus here also remained on regulation; the preamble mentions “improved regulation in marketing” before it talks of the “development of an efficient marketing system.” In contrast, the recent ordinances offer a pleasant contrast. The term “regulation” itself has been done away with. The first ordinance declares its objective to be “promotion and facilitation” and the second one “empowerment and protection.” These ordinances present a paradigm shift in Indian agricultural policy.

    The key objectives and their provisions in the trade and commerce ordinance are as follows:

    creation of an ecosystem of freedom of choice to farmers and traders for sale and purchase of farmers’ produce
    formation of competitive alternative trading channels
    promotion of transparent and barrier-free intra-state trade and inter-state trade
    facilitation of trade of produce outside the physical premises of notified markets
    creation of viable electronic trading platforms

    As per the new ordinances, farmers are to be paid on the day of the transaction or within a maximum of three working days. They do away with the onerous licensing system that required farmers to obtain several licenses to trade in different mandis within the same state. Gone is the market fee in the “trading area,” which is defined as any area of transaction outside the present day-notified mandi.

    Now, APMC mandis will now face serious competition and might be spurred into reforming themselves. Further, to the great relief of farmers, the dispute resolution mechanism has been kept simple and local, with preference being accorded to resolution through conciliation. The ordinance also envisages a price information and market intelligence system, thus equipping farmers for determining the price of their produce.

    The key features of the price assurance and farm services ordinance are as follows:

    creation of a national framework on farming agreements
    protection and empowerment of farmers in their engagement with the likes of large agribusiness firms, wholesalers and large retailers
    promotion of remunerative price agreements and a fair and transparent framework

    The ordinance also recognizes the possibility of an adverse impact on the rights of sharecroppers in the changed business environment. Hence, it has a specific provision for protecting their rights. The risk of markets and prices is likely to be transferred from the farmers to the contracting entities. Finally, the essential commodities ordinance clearly states, “the regulatory system needs to be liberalized … for the purpose of increasing the competitiveness in the agriculture sector and enhancing the income of farmers.” Accordingly, regulation of farm produce such as cereals, pulses, oilseeds, edible oils, onions and potatoes is only possible in extraordinary circumstances such as war, famine, a natural calamity of grave nature or an extraordinary price rise.

    Ensuring Lasting Change

    The reforms in agriculture marketing by way of these three ordinances are holistic. A primary problem with earlier legislation was that farmers could only sell their produce to specified traders in particular locations. As a result, farmers have been inevitably pushed to alternative buyers outside the legal framework, including middlemen and direct buyers. Small and marginal farmers suffer from an inherent disadvantage in such an environment. They lack access to market information. Even when they have some information, they lack the capital and technology that high-value crops require. The liberalization of agricultural markets will increase revenue avenues for farmers and improve their monetary returns.

    The proof of the pudding is in eating. The success of the ordinances will be determined by their implementation, which must be carried out in letter and spirit. While the ordinances remove aberrations and deficiencies in the regulatory structure, achieving their goals requires a strengthening of institutional capacity and infrastructure. Investment in agriculture, post-harvest infrastructure and marketing framework are all grossly inadequate. While these reforms should spur investment, it would be premature to expect that to happen automatically. Further efforts and interventions are called for. The big challenge ahead is to implement these reforms in the incredibly diverse markets across the country and to build strong alternatives as envisaged by the new legislation.

    A seemingly unrelated point is important regarding these ordinances. A recent article criticized the bureaucracy for drafting documents in language that was “officialese or bureaucratese.” This pejorative term is used for language full of jargon that is wordy and vague. Such criticism cannot be leveled against these ordinances. They serve as exemplars for other official documents. They are simple, straightforward and eminently understandable. The philosophy, intention and objectives of the ordinances are effectively spelled out in the preambles, which are among the best-drafted government documents in recent times. The trick now lies in achieving what they say.

    *[The author is a former secretary of the Ministry of Fisheries, Animal Husbandry and Dairying for the Indian government.]

    The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

  • in

    Democrats are reaching farmers with an exciting message: green agriculture | Art Cullen

    Every leading Democratic candidate supports a form of conservation that can reduce greenhouse gases and create jobs in rural America Something you might have missed amid all the horserace and app-failure coverage of the Iowa caucuses: a deep discussion took place over the past year about the climate crisis and agriculture that could change the […] More