Farm laws: Bridging the trust gap

December 15, 2020 5:00 AM

Any dilution in the farm laws will constrain Indian agriculture in harnessing the emerging global opportunities

The Confederation of All India Traders (CAIT) said in the last 20 days, trade and other activities of about Rs 5,000 crore have been affected in Delhi and its surrounding states.The Confederation of All India Traders (CAIT) said in the last 20 days, trade and other activities of about Rs 5,000 crore have been affected in Delhi and its surrounding states.

By P K Joshi & Arabinda K Padhee

It is regrettable that the farmers’ agitation has not yet been resolved, despite the Centre’s positive response on considering genuine demands. It is also unfortunate that farmers are changing the goalposts before every negotiation. Initially, it was claimed that the laws were framed without consulting farmers and farmer organisations; this is an unfair claim. The issue of deregulating agricultural markets has been under discussion and been debated for the last two decades.

Three high-level committees, the Hooda Committee, the Swaminathan Committee, and the Shanta Kumar Committee, recommended market reforms after a wide range of consultations with a large number of stakeholders, including farmers and farmer associations. Farmers have expressed apprehension that the new laws will discontinue the minimum support price (MSP) regime, and they needed assurance from the government for its continuance.

Gradually, the demand was changed to ‘give MSP a legal status.’ Prices are always determined by the nature of the commodity, demand, supply and global prices, and therefore, it is impossible to have legally-guaranteed prices. There are few other ‘concerns’: that the corporate sector will exploit smallholders and acquire their lands, that the dispute settlement mechanism is cumbersome, etc. From the government’s side, point-wise responses were prepared for discussion, but unfortunately, they were rejected by the farmer associations.

Finally, the farmer associations are demanding the complete withdrawal of new farm laws. It is bizarre to try and justify such rejection when farmers are being given more options on markets. If anyone is adversely affected, it is the traders/middlemen, especially from Punjab and Haryana.

Various non-farm organisations and a few intellectuals who are supporting the farmers’ demands must realise that the demands are unworthy of such support. It appears that the former are completely unaware about the prevailing marketing arrangements and the likely transformation expected from these reform measures. During the past few years, lot of efforts have gone into enhancing farmers’ income, ensuring remunerative prices and compensating the production risk, through various schemes.

During the Covid-19 pandemic, special packages have been announced for the farm sector to develop infrastructure, promote diversification, and strengthen MSMEs in the agro-processing sector. The export of agricultural commodities has also been given emphasis. To attract agri-business, provisions have been made through institutional arrangements for harnessing economies-of-scale through FPOs, contract farming, cluster farming, ‘one district, one product’, SHGs, etc. All these measures are to create an enabling agri-business environment for inclusive, efficient and sustainable agriculture.

The new farm laws provide alternative marketing opportunities to the farmers, especially smallholders. At present, agricultural marketing in the country is inefficient, fragmented and unorganised. The new arrangement should encourage healthy competition between the new markets and the existing APMC ones and help improve marketing efficiencies. Contract farming is already being practised in several states for many commodities.

The results are very encouraging. It helps farmers access improved technologies, adopt good management practices, even as prices and procurement are assured. These reform measures are expected to tap the potential of agro-processing and export of agricultural commodities. These will increase farmers’ incomes and generate new forms of employment opportunities, especially in logistics, packaging, transport, processing, etc. However, the success of these reforms will rely on strengthening of forward linkages and on the creation of an enabling business environment, especially for e-retailing, organised retailing, agro-processing and exports. In the entire arrangement, as we argued, the cooperation of states would be a key element (bit.ly/3gLTQ3n).

Why have the talks not succeeded so far? There are three reasons: One, the traders and large farmers from Punjab are leading this agitation. It is traders, who feel that they would be adversely affected by these three farm laws. The second reason is that the involvement of several farmers’ associations makes it difficult to take a unified decision.

Therefore, the only demand put forth is the scrapping of the three newly-enacted laws that very well suit all the associations. The third reason is that farmers, especially the smallholders, are a victim of misinformation in the absence of effective communication from the government. It seems that some activists and political elements (who presumably would like to keep the disquiet alive for a long time) have hijacked the agitation by colouring the farm laws with a distorted narrative.

To overcome the crisis, the government must adopt an effective communication strategy to build trust in a campaign mode. The three farm laws and resulting benefits should be given wide publicity through print and electronic media. The government could have done much more to effectively communicate the benefits of these laws to the farmers through the media.

Social media posts may not target the farming community so well. The benefits should have been discussed thoroughly in leading national and state-level newspapers on a regular basis. It can still be done, to educate farmers about these laws and their benefits. The government should also ask public representatives, from sarpanch to the MP/MLA, to educate the farmers in their respective constituencies. They should meet farmers and farmer organisations in their areas so that the latter are well informed about these laws.

As the farm laws have pan-India effect, farmer representatives from other parts of India, besides Punjab and Haryana, should also be involved in building the consensus. If the agitating farmers continue to be adamant, the Centre should leave it to the states for implementing the laws, with contextual modifications to the provisions of the current Act that states would be committed to bear extra expenditures, if any, from their own exchequers. The states that implement the legislations in their true spirit may be incentivised as recommended by the Fifteenth Finance Commission.

Few of the demands, on arbitration mechanism between farmers and buyers in contract farming, the jurisdiction of civil court authorities, etc, could be negotiated to bring amendments to the legislation. Any rollback of the farm laws will be disastrous for the farm sector and farmers. The new farm laws will help India emerge as a leader in agriculture and agro-processing. They are also expected to build a new crop of agri-tech start-ups and innovation hubs in the farm sector. Any dilution in the farm laws will constrain Indian agriculture to harness emerging global opportunities.

 

Joshi is ex director, South Asia office of IFPRI and Padhee is country director, ICRISAT based at New Delhi
Views are personal

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