Why Punjab shouldn’t go the Bihar means on agriculture reforms

The Centre claims the latest farm reforms are historic as they’ve the potential to carry a revolutionary enchancment within the financial situation of farmers. Earlier than analysing the potential impression of the three new legal guidelines, notably the Farmers Produce Commerce and Commerce (Promotion and Facilitation) Act, 2020, which impacts regulated markets, you will need to research the post-reform agriculture situation in Bihar, the place the Agricultural Produce Market Committee (APMC) Act was abolished in 2006.

At the moment, it was believed that the introduction of the Bihar Agriculture Produce Market (Repealing) Act would allow large funding to arrange and run agri-markets, resulting in the state turning into an agricultural hub. It was claimed that Bihar can be outfitted with premier market infrastructure for enabling farmers to compete within the world market. However did these claims come true? What occurred to Bihar’s economic system after 14 years of agri-reforms? This testimony would information us to know the way forward for Indian agriculture as a potential impression of recent farm legal guidelines.

Let’s take the case of recent funding and farm infrastructure. In Bihar, the abolition of the APMC Act was unable to herald new funding, consequently advertising effectivity deteriorated. The Bihar State Agricultural Advertising and marketing Board misplaced income because of the dismantling of regulated markets that led to the closure of the prevailing developmental actions within the state. Overlook the organising of a world-class advertising system, the state misplaced even pre-reform advertising infrastructure.


The variety of procurement centres in Bihar has declined by over 82%, from 9,035 in 2015-16 to 1,619 in 2019-20. Nonetheless, throughout this time, the variety of these centres elevated in Punjab (4.73%), Haryana (48.27%), Uttar Pradesh (29.48%) and Madhya Pradesh (19.48%). Equally, there was lack of chilly storage amenities in Bihar as a considerable variety of these storages shut down within the latest previous.

Higher value realisation was essentially the most impassioned difficulty publicised by the federal government whereas finishing up agri-reforms in Bihar. In actuality, the farm harvest costs of all main crops akin to wheat, paddy and maize remained decrease than the minimal assist value (MSP).

Throughout 2016-17, the MSP for wheat, paddy and maize was fastened as 1,625, 1,410 and 1,365 however the farmers might get 1,299, 1,113, and 1,140 a quintal, respectively. Throughout 2019-20, the farmers bought 350-450/qtl decrease than the MSP for all main crops. This exhibits that the worth mechanism beneath unregulated markets remained a dangerous proposition for the farmers.

After the de-regulation of agri-markets, the market density, participation of presidency businesses in procurement, and the size of procurement of grains additionally declined. Although advertising yards nonetheless exist, the our bodies managing them had been abolished and the employees employed there was deployed elsewhere. Unscrupulous merchants illegally transport a sizeable amount of farm produce to different states, which give assured MSP. Below these conditions, producer surplus and shopper surplus declined.


Not like claims of turning into a farm hub, the agricultural sector of Bihar has seen misplaced progress efficiency. The common annual progress in agriculture and allied actions of Bihar from 2001-02 to 2007-08 was 1.98%, which improved shortly after that solely to registered a decline at simply 1.28% from 2012-13 to 2016-17.

Owing to the current situation of the farm sector, the development of land focus seen after the variety of giant farmers elevated within the state could have a damaging impression on the livelihood of smaller farmers.

It was claimed that agri-market reforms would improve competitiveness and enhance the financial situation of the farmers. However this didn’t show to be true. The earnings stage of farm households declined within the post-reform interval in Bihar as the actual month-to-month earnings of those households fell from 1,810 from 2002-03 to 1,686 (6.85%) in 2012-13. Even on the all-India stage, the actual earnings stage of farm households elevated by 39.43% throughout the interval. Bihar remained one of many poorest states of India.


The prevailing worrisome situation of Bihar’s agricultural sector provides a lesson within the aftermath of the market reforms within the nation. Bihar’s reforms have solely enhanced market inefficiency that has led to decrease and unstable costs of agricultural produce. With out regulated markets, agriculture markets are disadvantaged of the required advertising infrastructure and honest costs to farmers and all different stakeholders within the economic system.

In such a situation, it’s obvious that the repealing of the APMC Act beneath the so-called agri-market reforms can be dangerous for the peasantry, state exchequer and agrarian economic system of our nation. sukhpaleco@pau.ed

Punjab Agricultural University, Ludhiana, principal economist Dr Sukhpal Singh
Punjab Agricultural College, Ludhiana, principal economist Dr Sukhpal Singh

The author is principal economist at Punjab Agricultural College, Ludhiana. Views expressed are private.

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