On June 1st, the Union government announced the “world’s largest grain storage scheme in the cooperative sector”, which is to be implemented through an empowered Inter-Ministerial Committee with an outlay of Rupees One lakh crores. This will be a project piloted by the Ministry of Cooperation headed by Amit Shah, along with the Ministry of Agriculture and Farmers’ Welfare, Ministry of Food Processing Industries and Ministry of Consumer Affairs, Food and Public Distribution. This plan is to be brought into shape by a National Coordination Committee through the already existing and ‘viable’ Primary Agricultural Credit Societies (PACS). About Rs. 1 lakh crore will be taken away from the ‘available outlays provided’ under eight identified schemes in many ministries for this purpose, without any separate funds being allotted.

PACS has not been assigned the job of grain storage now, but they will function in multiple roles to serve as fair price shops, buy and rent agricultural implements to farmers, food processing of farmers’ produce, and even to set up mechanisms for quality control of farm produce. In a separate communique of the government, it has been said that selected PACS will also be allowed to set up the much hyped ‘Jan Aushadhi Kendra’ to sell generic medicines.

Agricultural credit societies are functional at village-level through an old cooperative system with the contribution of member farmers and producers themselves, along with the short term credit made available by a network of various Gramin Banks under a certain policy framework regulated by NABARD and other institutions. So far, these PACS are supposed to cater to farmers’ immediate needs during crop seasons. Their primary mode of functioning is cooperation, which practically cannot create enough funds for investments and diversification of their role in, more and purely, commercial activities. Such funds then will have to come from some outside source which could be through government subsidy or loans from banks or private investment. As per the plan, each PACS will have a modular facility for the above mentioned jobs of storage, processing and marketing with an estimated construction cost at Rs. 2.25 crores, out of which, the government will provide a subsidy of Rs. 51 lakh and the rest will be margin money or loan. The storage space will be rented out to the FCI or private agencies. With such an arrangement, it has not been made clear as to how an envisaged annual earning of Rs. 45 lakhs to the concerned PACS will be feasible.

Till 2000, the share of rural credit cooperatives in disbursing rural credit used to be 54% and they had contributed more than 50% in providing short-term credit for farmers’ input costs. But, for obvious policy reasons, the actual ‘co-operative’ movement got weakened during severe agrarian crisis under neoliberal regime and the credit cooperatives’ share in rural credit dropped at 12.26% by 2019. A relatively robust rural credit mechanism and a policy framework that included agriculture subsidies and various schemes has now been withdrawn to comply with WTO dictates. The new scheme of things being presented mainly relies on the same dictum of market that was voiced by the BJP and other proponents of the three farm laws which the Modi government was forced to withdraw under pressure of the historic farmers’ movement.

Now the PACS is no longer a platform for improving the rural credit system. Instead, they have been transformed into multi-service centres which are to be connected electronically at the national-level into a single platform for marketing agricultural produce and services in an open market. The government has already started a project to bring all PACS on a common platform with a Common Accounting System for their business by computerising them. The Farmers (Empowerment And Protection) Agreement On Price Assurance And Farm Services Bill, 2020, meant to bring in contract farming, was passed by the Modi Government in 2020 and repealed later in 2021 under pressure of the farmers’ movement. This was to realise the corporate India’s dream of ‘opening up the market for the Indian farmer’.

While addressing PACS representatives in August 2020, Narendra Modi had said, “Why can’t a farmer sell his crop like a soap-maker can sell his soaps wherever he wants? Why is there no concept of ‘one nation, one market’ for the farmer?”. That Contract Farming Act had the provision of introducing third parties, other than farmers and the government, in the name of ‘farm service provider’ or ‘qualified assayer’ or ‘aggregator’. The ‘Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020,’ Act passed, and repealed later, was to replace APMCs and system of minimum support prices for the crops by introducing ‘farmer producer organisation’ and ‘co-operative society’ as a platform to deal with the traders in an open market. These same provisions, widely opposed by the farmers of the country, are brought in again in the name of making PACS multi-modal and as multiple service provider agencies, but without any assurances of procurement of crops at MSP or any governmental finance to make this scheme viable in favour of common farmers.

As far as storage of food grain is concerned, the existing capacity of Food Corporation of India (FCI) is sufficient in fulfilling the requirements for National Food Security Act, Public Distribution System and also has a buffer stock to keep the prices stable during lean season or aggressive open market situations. This is in spite of the fact that the Modi government had, in 2015, recommended privatisation of the FCI along with reduction in coverage of PDS. A number of Adani Agri-business companies were set up whose grain silos will take the place of FCI godowns. The FCI was deliberately deprived of funds needed for its modernisation and even maintenance works. Moreover, this very crucial public sector undertaking and an important component in ensuring food security for the nation was forced into a heavy debt trap which it cannot recover from on its own. This is how the Modi government has cleared the path for its crony corporates, and the Inter-Ministerial Committee headed by Amit Shah can make the way further using PACS as the next platform for corporatisation of agriculture.

According to the recommendations of the National Farmers’ Commission, farmers are struggling for proper remunerative prices, for legal guarantee of MSP, for decreasing the input costs, legislation for sharecroppers to be recognised as farmers, etc. But despite the retreat on three pro-corporate farm laws, the Modi regime continues to implement the same through backdoors. The Electricity (Amendment) Bill of 2020 was repealed, but now the Electricity (Amendment) Bill, 2022 was placed before the Lok Sabha and has been referred to the Parliamentary Standing Committee.

India had enjoyed relative seed sovereignty with public sector firms dominating the seed sector. The subsidised fertilisers were in affordable limits, and the agriculture extension services lent a big hand to farmers in need. The PACS in the new avatar is said to be providing the same services under a so-called open market ecosystem which was earlier there as state’s support system. This will further endanger the already crisis-ridden agriculture, leaving peasantry at the mercy of companies whose only motive is to make more profits.