Beneficiaries of Farm Bills – A case of 22,000% Return on Investment?

DD Mishra

DD Mishra

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If they are in the farm business, political lobbyists can achieve 22,000% potential ROI on their investment

SO FAR, our conversation around farm bills has centered around the stakeholders who have been negatively impacted, for example, Farmers, Common People, or the economy.

It will be an injustice to that handful of people for whom it brings a fortune unforeseen before. I have dedicated this report to those chosen few who will be able to leverage it fully. You can spend the rest of 5-6 mins to read it carefully, line by line.

Before we deep dive into the beneficiaries, let us understand some facts which complement the context here. They are essential for us to understand the economics, business, and politics behind those beneficiaries.

1. India’s current yearly GDP is nearly 200 Lakh crores. The farm sector is 15% of GDP which makes it 30 Lakh Crore annually. That is the size we are referring to here.

2. The world’s most profitable business, as per my investigation, is lobbying. I have seen a few research around return on investment from lobbying by various agencies, which puts the return on investment to 22,000% by NPR and another by University of Kansas research.

Show me one business in the world which gives such a return on investment. NPR is a reputed non-profit media organization based in Washington.

3. During the 2019 election, BJP spent approximately INR 25,000 -30,000 crore as per the Center for Media Studies report. Based on information submitted by BJP to the election commission, the ADR report indicates BJP spent 1141 crore. This discrepancy suggests nearly 26,000 crores came from unknown sources, which can point towards investments from lobbyists.

Below is the table of expenditure of BJP and Congress during 2019 elections published by CMS Analysis and Estimation.

4. Now let us calculate 22,000% of this INR 26,000 crore, which comes out to be approximately INR 57 lakh crores. That is the kind of return-on-investment lobbyists may be expecting from BJP if the above findings are to be believed.

5. The farm sector is mostly unregulated, and it is very prone to manipulation. 100% price escalation is not unusual. Check the onion prices when it fluctuates by 300% easily by manipulating demand and supply.

Assuming an opportunity to manipulation, easily 30 Lakh crore farm sector can fetch equivalent amount which theoretically can fulfill half the lobbyists ROI in the first year itself and by the second year, it can give the much needed 22,000% return.

6. There is another fact which many of us have missed. The farm bills and protests are very similar to the Blue Revolution – Indigo Revolt of West Bengal in the 18th Century.

With the Nawabs of Bengal under British power, indigo planting became commercially profitable because of the demand for blue dye in Europe. It was introduced in large parts of Bengal. Indigo destroyed agriculture. Businesses who sold Indigo provided loans to farmers, called “Dadon,” at very high interest.

farmOnce a farmer took such loans, he remained in debt for his whole life before passing it to his successors. By an act in 1833, the Indigo businesses were granted a free hand in oppression. Under this severe oppression, the farmers resorted to revolt.

This revolt is called the “Indigo Revolt” in the books of History. The British army massacred farmers, and 10 million (1 crore) farmers died for various reasons. The present and future is an extrapolation of the past. I see History as Geography on wheels. Any similarity may even be coincidental.

Sorry for the long list, as I could not stop myself. All of them are needed to understand the beneficiaries.

By the above facts, it won’t be hard to understand the stakeholders who can benefit. I have tried to capture them based on my understanding of who can benefit from the three farm laws, but I must admit that it can generate good debate.

1. Lobbyist – If they are in the farm business, political lobbyists can achieve 22,000% potential ROI on their investment in the second year or at the most third year. This is because they can manipulate the demand and supply by tweaking the rules in their favor (like farm bills) and control the supply chain. The power to manage demand and supply creates an opportunity so ample that 22,000% return on investment on alleged lobbying will be peanuts compared to the opportunity they can leverage.

neta2. Politicians – Politicians involved in framing rules will get good support to fulfill political ambitions as some part of this money from lobbyists return on investment will come back to them, which will keep them in power. They are equal stakeholders.

3. Corporates – Certain businesses that are a part of the entire value chain can also leverage the benefits. For example, insurers are also beneficiaries of the supply chain involved in the process, transporters of food grains, retailers who are part of the chain. In addition, if the farm sector is destroyed, the farmers will be forced to become laborers. This situation will make cheap labor available to select businesses.

4. Importers/Exporters – Some businesses are involved in importing food grains and control end-to-end supply chains, including ports, ships, storage, transport, and point of sale. If somehow, due to some reasons, they can obliterate the farm sector, they will have a total monopoly on our hunger. I leave it to the imagination how much profit someone can make when they control your hunger. However, they will have abundant storage of food grains to support global needs until this happens, and hence exporters will benefit for some time.

5. Intermediaries – Many farmers will be unable to sustain themselves over a period. Once the poverty builds up, they lose their protection and money; they will explore selling their land. Intermediaries will have a gala time negotiating and buying these lands and selling them at higher prices.

farmerInitially, the small farmers and then eventually the larger ones may become extinct. This exactly happened during “Indigo Revolt”mentioned above.

There can be many other beneficiaries; for example, some officers involved in dispute resolution may see this as an opportunity if the number of disputes increases, the people involved in dispute resolution can also be benefitted. Thus, the ecosystem will yield opportunities for some and destroy the rest.

Do we see a slow-moving linear economic growth is at times less attractive than a fast-moving non-linear downfall of a nation for some as it gives more returns in a quick time?

I leave this here as food for thought. Ignorance is bliss over a short period, but it can bring unending miseries for the next generation.

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DD Mishra

DD Mishra

The writer is a researcher, blogger, social worker, activist, and change agent who strives to create social equilibrium and harmony for sustainable development. The content represents personal views of the author and does not represent the organisation or any group with which he may be associated with.

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