New Delhi: The Economic Survey 2020-21 has defended the Narendra Modi government’s controversial new farm laws, calling them a “remedy” rather than a “malady”.
The survey, authored by Chief Economic Adviser Krishnamurthy Subramanian, makes the case that the laws will work to farmers’ advantage, especially small and marginal ones who account for around 85 per cent of the total farmer population in India and “suffer” the most under the APMC mandi regime. However, farmers have been protesting for months, including two on the outskirts of national capital Delhi, to scrap the new laws and retain the APMC monopoly, instead of opening up the market to competition.
The Economic Survey noted: “Existing laws kept the Indian farmer enslaved to the local mandis and their rent-seeking intermediaries, while every other category of producers in India has the freedom to decide.”
It added that current mandi regulations, which have led to the presence of multiple intermediaries between farmers and consumers, have resulted in several inefficiencies and losses for the farmers.
“The reforms in agriculture markets will enable the creation of ‘one India, one market’ for agri products, create innumerable opportunities for farmers to move up the value chain in food processing… create jobs and increase incomes,” the survey underlined.
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Heavy reliance on agriculture for economic recovery
The Economic Survey also anticipated a heavy reliance on the agriculture sector to protect the Indian economy and revive it after the Covid pandemic and lockdown.
It termed the farm sector as “the only silver lining” in the economy, and observed that only agriculture has registered positive growth while other sectors such as service and industry have contracted.
The survey estimated the gross value added (GVA) growth at minus 7.2 per cent in 2020-21, against positive 3.9 per cent in 2019-20.
It said agricultural activities for rabi harvesting and kharif sowing were largely unaffected by the Covid-induced lockdown, witnessing a growth of 3.4 per cent, resulting in an increase in its share in GDP to 19.9 per cent in 2020-21 from 17.8 per cent in 2019-20.
The survey also emphasised that reforms must be carried out to reduce post-harvest losses, which will help realise the Modi government’s stated objective of doubling farmers’ income. It said this can be achieved by keeping the focus on post-production management with adequate storage and remunerative markets for agricultural products.
This, in turn, could be achieved by developing village-level procurement centres, linkages between production and processing, development of rural markets, the option of selling outside the APMC markets with warehouse upgradations, strengthening of railways freight operations, and dedicated freight corridors.
The survey also cited the 2018-19 annual report of the Central Institute of Post-Harvest Engineering & Technology, under the Ministry of Food Processing Industries, to show that the annual value of harvest and post-harvest losses of major agricultural commodities is at Rs 92,651 crore, using production data of 2012-13 at 2014 wholesale prices.
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