New Delhi: The Narendra Modi government would have achieved greater success in implementing the three farm laws if it had followed a consultative process, and assuaged the farmers’ concerns before passing them, agricultural experts said at ThePrint’s Off The Cuff Saturday.
They agreed the laws bring in much needed reforms in the agricultural marketing space, and suggested ways to further improve price discovery for farmers.
In a virtual conversation with ThePrint’s Editor-in-Chief Shekhar Gupta, the three agricultural experts, Siraj Hussain, former Union secretary, Agriculture, Ashok Gulati, Infosys chair professor at thinktank Indian Council for Research on International Economic Relations, and Mekhala Krishnamurthy, associate professor at Ashoka University, weighed in on the contentious farm laws and the subsequent protests.
Farmers from Punjab and Haryana have been camping at Delhi’s borders for over two weeks now in protest against the three laws passed in September.
One of them is the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, which allows farmers to sell their produce outside Agricultural Produce Marketing Committees (APMCs) constituted by different state legislations.
The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act allows contract farming; while the Essential Commodities (Amendment) Act deregulates production, supply, distribution of food items like cereals, pulses, potatoes, onion and edible oilseeds.
‘Ordinances were surprising in the light of the pandemic’
In the wake of the ongoing protests, Gulati said the agitations are rooted in “communication failure by the government”.
“It is very unfortunate that these protests are taking place in the outskirts of Delhi. Why it’s happening, I have said there’s a communication failure. This is because the actual content of the reform is to the benefit of the farmers,” he said.
“This reform bill opens up choices for the farmers. If he wants to keep going to the mandi, he is welcome. But if there are other players offering better price or service, he has an option to go to them as well,” he said.
Gulati added that 90 per cent of India’s agricultural produce is already being sold to the private sector. “These laws are trying to create a formalised system of an informal way of doing things,” he said.
The laws also allow the option of making the supply line more efficient and inclusive, he said. “Aggregation will be done and small farmers who were losing will get a better deal,” he added.
Krishnamurthy, meanwhile, said that while no reform has ever been brought in without any pain, the opposition by the Punjab and Haryana farmers needs to be contextualised.
“A farmer in Bihar or Odisha may not react in a strong way because they have not seen the benefits or the liabilities of a mandi system. This is very different from states like Madhya Pradesh or Maharashtra or Karnataka, which have a mix of a mandi system and private players.”
“This is again different for farmers in Punjab and Haryana, where the mandi is not only the site of exchange, but also for assured price. In Maharashtra or Karnataka, on the other hand, the mandi is a publicly regulated market of private players,” she explained.
She added that these laws represent a “missed opportunity” in their design as much more should have been done to ensure a mechanism by which farmers get a good price settlement.
“This reform in trying to get around the mandi, which no doubt is a complicated political system, has forgotten the first principles of reform, which include good price discovery and mechanism to ensure that farmers get good price settlement. Forward-thinking policies would build better regulatory systems and designs, and a more robust institutional framework. That is why this is a missed opportunity,” she said.
Hussain, on the other hand, said that while these reforms have been under discussion for years, the way they were brought in was problematic.
“Even though the reforms had been under discussion, these ordinances were surprising in the light of the pandemic,” he said.
He added that since different states are at different stages of development, reforms are more successful when they are gradual.
“Punjab is at a very different level of development in terms of agricultural marketing in comparison to Bihar or Jharkhand or Bengal or even the Northeast that we hardly talk about. Reforms have succeeded when they are gradual and consultative. In this case, reforms are too far-reaching, very desirable but perhaps could have come more gradually,” he added.
‘If govt repeals the laws, they will lose credibility’
Despite the government refusing to repeal the three laws as of now, the panelists agreed there is always room for improvement.
“If the government repeals the laws they will lose credibility. Short of that, there is always scope for improvement and assurance to be given. Government is coming forward, but if farmer unions continue to insist on repealing, then it may result in anarchy. Reforms are never easy,” said Gulati.
Krishnamurthy said that along with communication, a need for comprehensive strategy is important.
“Genuine transformation in agriculture when it has happened in India has not happened through reform. Instead, it has happened through large-scale coordination between public and private investment. The Green Revolution, for instance, brought in public investment and new arrangements around farmers,” she said.
“If you bring in reforms, but don’t explain what it means, the fear of what it means comes to the fore. Farmers fear promises will never be fulfilled because they feel this is a withdrawal of a promise. Twenty-two states in India already allow private players, but they still buy from mandis,” she added.
Hussain also said there is a need to take the state governments on board.
“The labour laws were also brought in during the pandemic. But there was no such opposition to it because it passed through scrutiny of the Parliamentary Standing Committee. So there is a need to take the states on board,” he said.
The way forward
The panelists agreed that procurement by the government is not the answer.
“Procurement by the government will never be the answer. Even in the case of wheat and rice, we are procuring 15 million tonnes more rice for PDS (public distribution system) than what is required. It comes at a very high price,” said Hussain.
While decentralised procurement is the way forward, farmers need protection from volatility of markets.
“With our mandis and primary markets, you need to think about risk mitigation. As you deepen markets and expand your reach into markets, farmers need to protect themselves from volatility. So you cannot deepen markets and not give risk mitigation mechanisms. Farmers all over the world have it and this is very important,” said Krishnamurthy.
“Innovation needs a structure and a robust framework where the state is present in multiple ways — not necessarily in ways that distorts markets. Farmers are aware of this. They engage with the state in ways that many citizens don’t for public use,” she said.
Gulati also said that policy cannot be lopsided. “Farmers need investment subsidies. If not investment subsidies, then at least do direct income support so that it is crop-neutral. I would suggest switching from price support to investment support or income support,” said Gulati.
For Hussain, cooperative federalism is the way forward. “Cooperative federalism should not only be a slogan. Even after this issue is settled, there are several reforms on the table-like fertilizer subsidy reform, electricity subsidy reforms and water. As (Gujarat) CM, he (PM Modi) pushed for states’ vision to be appreciated by the Centre. Now as PM, he would do well to listen to the states and build a broader consensus,” he said.