New Delhi: In 2020, the Narendra Modi government introduced contentious new farm laws. They allowed corporate entities to hoard commodities like rice, wheat and pulses. And also enabled farm commodities to be sold outside the regulated markets, undermining assured floor prices and laid the ground for large-scale corporate contract farming.

It sparked an uprising of farmers. Tens of thousands of them camped out on the outskirts of Delhi braving the waves of heat, cold and coronavirus for a year. The farmers believed the laws helped friendly businessmen. Adani Group, whose fortunes locked step with Narendra Modi’s rise and is often alleged to have close ties to the Union government, was at the centre of severe criticism as the conglomerate was perceived to benefit the most from the laws.

Previously unpublished documents accessed by The Reporters’ Collective now reveal the Adani Group discreetly lobbied with the government in April 2018 for the removal of restrictions on hoarding agricultural commodities. One of the centre’s three contentious farm laws, enacted two years later, did just that. 

As far back as two and a half years before the farm law ordinances were enacted, the Adani Group's representative at a meeting of the task force set up by Niti Aayog aimed at doubling farmers' income by 2022 said: “The Essential Commodities Act is proving to be a deterrence for industries/entrepreneurs.”

This is the first recorded instance of the Adani group's official advocacy for the repeal of the Essential Commodities Act that limits companies from hoarding agricultural produce. Repealing the law, critics argued, allowed corporations in the agri business, such as the Adani group, to hoard agri produce unchecked, at the expense of farmers. 

In the first part of this investigative series, we delved into the hush-hush origins of the task force that consulted mostly with businessmen to find ways to better the lives of farmers. In this concluding part of the series, we uncover the candid discussions behind closed doors where corporations revealed their hand and the government its intentions.

Niti Aayog set up the task force – for getting corporates to double farmers’ incomes – in 2018 under the advice of an NRI software businessman close to the BJP (Read part 1). 

It partially usurped the mandate from the formal inter-ministerial committee on doubling farmers’ income that was in place since 2016, set up two months after the Prime Minister first announced his dream of doubling farmers’ incomes.

While the inter-ministerial committee consulted a diverse set of activists, economists and industry leaders and released 14 volumes analysing problems plaguing India’s agricultural sector and recommended ways to augment farmers’ incomes, the task force consulted handpicked big corporates such as the Adani Group, Patanjali Ayurved, Mahindra Group, and BigBasket. Both the panels, oddly, were led by the same man, Ashok Dalwai. The Collective sent detailed queries to Dalwai who did not respond despite reminders.

The task force was created intentionally to seek out answers that differed from those previously presented by the committee, disclosed a member of the task force under the condition of anonymity.

The member told The Collective, “The Doubling Farmers’ Income committee was coming up with stacks and stacks of reports with sarkari solutions. We wanted to do things differently. We were looking for market-led solutions.”

On April 3, 2018, the task force consulted representatives of private firms. One by one, they gave their garden-variety inputs.

Mahindra & Mahindra, for example, spoke about Ab Tractor Call Karo – its tractor rental service – which it claimed falls into a “Farming as a Service” model. Patanjali Ayurved’s representative said the company provides seeds with high yield to farmers with a buyback assurance. It also proposed to sign agreements with farmers that would establish “direct link between farmer and consumer”. ITC elaborated on how it is “strengthening rural livelihoods” through its Mission Sunehra Kal. None of the companies at the meeting shared data on how their model led to any quantifiable increase in farmers’ incomes.

The Adani Group spoke of setting up a centre of excellence in Gujarat on land owned by Adani Ports and SEZ for information dissemination with farmers. Sixty per cent of the cost for setting this up, it proposed, would come out of the government’s kitty.

Nine of ten corporates that were consulted by the task force asked for policy tweaks for their model. Of these nine, four asked for monetary support from the government.

In the same meeting, Adani Agro cut to the chase and spoke about the obstacles they face in growing their agri-business. 

“The Essential Commodities Act is proving to be a deterrent for industries/entrepreneurs and in turn to the farmers,” the company’s representative Atul Chaturvedi said at the meeting.

The underlying message was what’s good for the company would be good for the farmers. But farmers later protested the move, when the Centre amended the Essential Commodities Act in favour of corporates. 

While the Dalwai-led Doubling Farmers’ Income committee had also recommended liberalising stock limits, it added safeguards for farmers. “It is recommended that conditional exemption from stock limits be optioned to private organisations that procure stock at Minimum Support Price rates directly from farmers, along with exemption from variable export limitations,” it said in its final volume that enlists specific policy recommendations.

When the government finally curtailed the Essential Commodities Act through one of the farm laws, it did not include proposed safeguards by the Dalwai-led committee. Instead, the laws prioritised business interests with the August 2020 amendment Bill tabled in Parliament stating, “there was a need to create an environment based on ease of doing business”.

Enacted in 1955, the Essential Commodities Act is a tool for the government to regulate food stocks to check price fluctuations in the market and as an anti-hoarding measure. Traders often hoard large amounts of food grain and sell them during food shortages when prices zoom.

The September 2020 amendments to the Act – one of the three farm laws – removed these powers given to states. The Centre could impose stock limits only under extraordinary circumstances such as famine or when retail prices of food commodities rise by more than 50% compared to the previous year. But food exporters and “value chain participants” (the Act did not define the phrase) were exempt from such limits.

This particular clause was a boon for conglomerates such as the Adani Group, which has been developing and operating grain silos for Food Corporation of India since 2005 besides its business interests in storage, transportation (it owns railway rakes used for transporting foodgrain) and ports from where food grains are exported.

The firms that the task force consulted have seen their toplines grow on the back of agriculture with revenues running into hundreds of crores.

For example, ITC witnessed a notable increase in its agribusiness profit before tax during the last quarter of the financial year 2022-23. The profits rose by 25.9%, reaching Rs 300 crore, when compared to the same period in the preceding financial year. For United Phosphorus Limited, FY23 revenues grew 16% to Rs 53,576 crore over its FY22 numbers.

The farmers, on the other hand, have only experienced small increases in their income. According to government’s 2018-19 data, which is the latest available, the average monthly income of a farmer has reached Rs 10,218 from Rs 8,059 in 2015-16. This is only 48% of the intended goal of doubling incomes by 2022.

Experts told The Collective corporate companies’ entry into agriculture in itself is not a problem but cautioned that any firm’s business model would be “self-serving”. Such business models, they said, will be about maximising profits for which a firm will save on costs by paying farmers less – defeating the purpose of doubling farmers’ income. The models will instead serve as an entry point for businesses to rake in more profits.

“Most processing technology is really large scale so the sector needs big players. But a corporate will try to squeeze its costs by reducing money spent on procuring farm produce. In the end, they will think about their profit margins,” said Sudha Narayanan, associate professor at Indira Gandhi Institute for Development Research. The fact that farmers or agricultural activists were kept out of the discussions, she said, is a red flag.

The brazen efforts to corporatise agriculture, purportedly to help farmers earn more, sharply contrast with the Modi government's handling of farmers’ concerns.

Between 2014 and 2018, the country witnessed around 13,000 farmer protests. Their long-standing demands, such as a legally mandated Minimum Support Price (MSP) to safeguard against market fluctuations and crop insurance against disasters, were completely overlooked in the task force discussions. The government had promised to create a committee to investigate the legal enforcement of MSP after a year-long farmers' protest that gained global attention and resulted in 700 deaths. However, no such committee was formed. But it had previously moved with alacrity to set up a task force for giving corporations an entry into agriculture.

The Collective sent detailed queries to the Adani Group, Niti Aayog, Department of Agriculture and Farmers’ Welfare and the firms the task force consulted. None of them responded despite reminders.

In a column written for The Print by former Agriculture secretary Siraj Hussain, and former rural development secretary Jugal Mohapatra, they observed that this particular amendment was the most “business friendly” one. “The moot question is whether the corporates will give a fair price to farmers when the crop is harvested and prices tend to be the lowest,” they wrote. “There is no easy answer to this,” they said.

While the former secretaries remained uncertain whether corporatising the sector would benefit farmers, they ended the column with a warning: “It is the consumers who may have to worry more if monopolies develop in this business. At present, the government has no way of knowing the quantities of privately held stocks.”

The Aayog’s file on the business-friendly task force ends with a July 6, 2020 letter by Ashok Dalwai celebrating the farm ordinances the government had brought in a month earlier. 

Eight months later, during the farm protests, Niti Aayog’s Ramesh Chand warned that if the laws were to be repealed doubling of farmers’ income would not happen. In December 2021, farm laws were repealed.

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(Click here to read the previous part of the investigation.)