New Delhi: The repeal of the three contentious farm laws, announced Friday by Prime Minister Narendra Modi, has raised uncertainty about reforms that these legislations were meant to bring to the country’s farm sector. Introduced last year, all three laws were in theory meant to deregulate and unshackle the true potential of the Indian agricultural sector in various aspects, including produce marketing, contract farming and food processing.
The prime minister has announced the formation of a committee to address future agrarian issues. This would comprise representatives of the central government, state governments, farmers, agricultural scientists, and agricultural economists.
Some experts said this presents an opportunity to push these reforms in a federal manner by building greater consensus and acceptability. Others, however, viewed the repeal of the laws as a political gamble that could jeopardise future growth.
“The committee will be asked to consider the larger picture of reforms and hold thorough consultations with the states. A larger consultation process might delineate what the states and the Centre will do respectively,” said former Union agriculture secretary T. Nanda Kumar, an agro-economist, told ThePrint.
“A sensible way would be to have more federalism built into this, as each state has different problems and different political considerations. For example, agricultural produce market committees (APMCs) are very important in Punjab, but other states prefer a much more hybrid model (where some produce can be sold outside APMCs). Other reforms such as direct benefit transfer might happen in consultation with states,” he added.
Kumar said “the next three-six months will be a churning period, and only then will things become clearer”.
“The committee can become a consultative forum among the state and central governments like the GST Council — something many others and I have been arguing for. If things are done with some ingenuity, a lot of problems can be solved through consultations,” he added. “Recommendations could then be given to the government, which wouldn’t need to worry about fine-tuning details. This committee will be a good idea to start with as it will have a larger mandate.”
India’s agrarian crisis is a diverse one, with variation in nature across states and regions — all the more reason for a more thorough consultative process, say experts.
Siraj Hussain, former Union agriculture secretary and currently visiting senior fellow at the Indian Council for Research on International Economic Relations (ICRIER), said, “Agriculture is very complicated and not uniform across the states. The 2018-19 data of farmer incomes proves that the situation of farming households in Odisha and Jharkhand is very bad — they are earning just about R . 5,000 a month.
“Agricultural policies must be tuned to the local situation, which is why the Constitution made agriculture a state subject.”
The road ahead, he said, “should be to enable state governments to formulate policies that are ecologically sensitive to their requirements”.
“In the original Green Revolution states, now facing water stress, the Centre should provide sufficient funds for diversification from paddy,” added Hussain.
Some experts see the repeal as a political gamble, noting that the future of agricultural reforms has become subject to the fate of upcoming state elections
Ashok Gulati, agricultural economist, chair professor for agriculture at ICRIER, and former chairman of the Commission for Agricultural Costs and Prices, described the repeal of the farm laws as a “tactical move by the Modi government, as it has been declared on a chosen day and ahead of crucial elections in Uttar Pradesh and Punjab”.
“Agriculture will not stop and will keep chugging the way it has been doing for the last 10-15 years at a 3.5 per cent growth rate. All the potential gains that could have come with private investment in the next three-five years will be lost,” he said.
Kumar added that giving up on reforms altogether would be a bad idea.
“For reforms such as agri-marketing, model laws already exist, so this can be passed through states. The market reforms, however, will be slowed down, but to give up on this totally would be a bad idea,” he said.
(Edited Rohan Manoj)