Farouk Gumel - Why is the Indian farmer protest important for Africa’s agricultural policy?

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Farouk Gumel - Recently, the media has been
reporting about massive farmer protests in India
against the implementation of certain
agricultural reforms in Nigeria. The protest
started on 9th August 2020 and most of the
protesting farmers are from Indias two largest
agricultural producing states (Punjab and
Haryana). It is reported that these States are
the largest beneficiaries of the Indian
Governments Green Revolution reforms.
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The first important point to note is the farmers
protesting outside New Delhi are among the
wealthier farmers in the country who are the
major beneficiaries of Government interventions
including the Minimum Support Price (MSP), the
Indian governments grain procurement program
which provides offtake assurance through
government-regulated physical markets. So the
views of these large players may not be a fair
representation of the millions of smallholder
farmers in India.
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• The first law, The Farmers Produce Trade and
  Commerce (FPTC) Act, offers farmers a greater
  choice in selling their produce. Under the act,
  farmers now have the option to sell outside the
  government-regulated physical markets,
  Agricultural Produce Marketing Committees
  (APMCs), to private channels, integrators, or
  cooperatives. They can now do this through a
  physical market or on an electronic platform,
  directly on their farm, or anywhere else, not
  just at designated APMCs. Essentially, the law
  provides more options to small farmers without
  compromising the avenues already available.

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2. The second law, the Farmers (Empowerment and
Protection) Agreement of Price Assurance and Farm
Services (AFPS) Act, is a simplified and improved
version of the Contract Farming Act that has
already been adopted by 20 Indian states.
Contract farming acts as a form of price
assurance as whatever price was agreed in a
contract must be honoured after harvest. The new
law is intended to insulate farmers against the
market and price risks so that they can cultivate
high-value crops without worrying about market
fluctuations that could lower prices in the
harvest season.
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3. The third law, the Essential Commodities
(Amendment) Act, is a modification of the
Essential Commodities Act that lays down
transparent criteria for the price triggers
behind government decisions to regulate the
supply of essential commodities under
extraordinary circumstances.
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From the above, it looks like the reforms are
meant to make life easier. The Indian government
argues that the deregulations will increase
efficiency, allow farmers greater freedom and let
farmers negotiate better prices for their crops.
Under the old arrangements, there were middlemen
in the system who would buy grain from farmers,
keep a healthy margin for themselves, and then
sell it at inflated prices to retail markets and
consumers. Some have claimed that these
middlemen, who will lose out from the changes,
are actually behind the protests, rather than
farmers who stand to benefit.
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But the protesting farmers say these reforms will
devastate their earnings as it will end the MSP
program, a safety net that assures farmers that
they will be paid a certain price without regard
to market conditions. So a balance needs to be
struck.
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The Indian government is in talks with all
stakeholders on this matter.
Farouk Gumel, an Executive Director at TGI Group,
a pan African conglomerate has been monitoring
these negotiations closely. Farouk Gumel, whose
company owns and manages food production
facilities, explains TGIs factories are
constantly exposed to price and volumetric
volatilities in their raw material supply chain.
In the last 3 years of the existence of TGIs
rice mill, Farouk Gumel says they have seen huge
swings in paddy prices and availability which is
raising concerns when it comes to planning for
future investments. Such swings, according to
Farouk Gumel, can only be eliminated with
strong, reliable and consistent raw material
supply with predictable pricing.
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• Farouk Gumel concludes that the Indian case study
  should be monitored closely by African nations.
• He states Many African countries have or are in
  the process of introducing MSP programs. Many
  African food companies use outgrowers, under
  contract farming arrangements, to meet their
  input supplies.
• Many countries and marketing boards are looking
  to set up pricing models for essential
  commodities. Farouk Gumel remains confident that
  a balance will be struck between the Government
  and Market-driven agricultural forces or which
  African leaders can replicate to meet their food
  security needs.

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