Farm Reforms: India’s farm sector reforms are a pathbreaking step forward
Talk about MSP ending after the new laws is the biggest lie ever. I want to assure every farmer across India that MSP is here to stay
~ Prime Minister Narendra Modi
This can be the 2nd green revolution which would make the nation progress towards the ambition of our visionary prime minister wherein rolling back farm reforms would privilege a small but vociferous group over the silent majority. The three farm laws offer three basic freedoms to the farmer. One, he can now sell anywhere to anyone, freeing him from having to sell to a monopoly cartel at the APMC mandi. Second is the freedom to store inventory which was constrained so far by stocking limits in the Essential Commodities Act. This gives incentive for cold storages to come up, to whom farmers can now sell directly. Third, it gives farmers the freedom to make forward contracts, transferring their risk to businessmen, leading hopefully to freedom to lease unviable lands for a job and a share in profits.
The Agricultural Produce Marketing Committee (APMC) is an obsolete institution from an age of scarcity, meant to protect the farmer but becoming his oppressor, a monopoly cartel fixing low prices for the farmers’ produce, forcing distress sales. The reforms have broken this monopoly and since June, out-of-mandi farmer sales have grown sharply while mandi transactions have plunged 40%. This reform needs to be followed up with a stable policy on exports, unlike the present ‘start-stop’ policy, under which onion exports were recently banned. This is why farmers hanker after MSP.
The main demand of Punjab’s farmers and activists supporting them is to make the minimum support price a legal right. This is a bad idea because it makes Punjab’s farmers produce what people don’t want and discourages them from growing what people do want. It results in overproducing wheat and rice and underproducing protein-rich daal.
Every year, the nation groans under a mountain of excess grain, some of which is eaten by rats. Because of MSP, the Punjab farmer grows water-guzzling rice, harms his soil, lowers his water table, and kills thousands of people through air pollution from burning stubble while taking the sympathy of the state while being solely accountable and responsible for the deteriorating air condition.
By giving farmers freedom from irrational controls, the reforms seek to raise farmers’ incomes through higher productivity. Indian farm yields are only half or a third of our competitors. China, with half the arable land of India, produces double the crop. The problem is that 80% of Indian farmers own less than two hectares. These can become more productive by the use of scientific methods and by growing high-value crops. But it requires an infusion of capital and technology.
The farmer, however, doesn’t have the money to pay for it. Nor does the government. Hence, the next reform should give farmers the freedom to lease their lands to agri-professionals with capital and technology, and become in turn shareholders and workers on the same land, setting the stage for the second green revolution.
The downside to this scenario is a fear of big business taking over agriculture. The answer is for farmers to organize themselves in the form of cooperatives, or farmer-producer organizations like Amul that the PM has spoken about. It’s not easy to make a success of a cooperative, but there are enough examples to emulate.
The opposition is citing abolishing of APMCs in Bihar, to justify their preposterous demand of rolling back these reforms but, so-called intellectuals are ignoring the facts while brewing their biased opinions, for example, In Bihar, the APMC Act was abolished in 2006. Between 2011 and 2018–19, India’s growth rate was 7.5 percent whereas in Bihar it was 13.3 percent. In comparison, before the reforms were implemented, from 1993–94 to 2000–05, India’s average growth was 6.8 percent and Bihar was trailing at 5.3 percent.
After Janata Dal United’s Nitish Kumar came to power and the APMC Act was abolished, between 2005–06 and 2014–15, Bihar’s agricultural growth was 4.7 percent while India’s agriculture grew by 3.6 percent.
In the last five years, India’s agricultural growth has been 2 percent while that of Bihar has been 7 percent. Bihar is an example that agriculture does well when reforms are carried
The other fear of farmers — of MSP going away soon — is unfounded. Government has to point out that it needs to procure rice and wheat to supply lakhs of ration shops under the Food Security Act. Covid-19 has dramatically underlined the importance of the food security system in a time of crisis. No government can handle the political challenge of doing away with food security. It’s too big a risk. So, farmers can relax. But it doesn’t mean that MSP should become a legal right. In the ideal world, it would be far better one day to replace the entire system of agriculture subsidies — water, power, fertilizers, and MSP — with a minimum basic income to the farmer. But that’s not going to happen anytime soon.
These protests are there to malign the social welfare of the government, under the vibrant leadership of PM Narendra Modi consisting of irregularities on their demand since the inception of the protest instigated by the political parties who couldn't defeat the works of Narendra Modi in electoral politics. This protest is costing the loss of crores and only associations accountable are the ones who’ve mislead the farmers and laborers. The economies of Punjab, Haryana, Himachal Pradesh, and Jammu and Kashmir are bearing losses to the tune of Rs 3,500 crore every day. The symbol of communist parties is hammer and sickle because they’re against modernization and have started to criticize modernization in the name of westernization and they want society not to progress with technology. The size of the combined economies of Punjab, Haryana, Himachal Pradesh, and Jammu and Kashmir is about Rs 18 lakh crore. With the ongoing farmers’ agitation and blockade of roads, toll plazas, and railways, the economic activities have come to a halt. This is because their opposition is not against the government but is against, the people of India who’ve rejected their divisive politics and have to choose a government for the people, by the people, and of the people. The Confederation of Indian Industry (CII) had said the farmer agitation has led to supply chain disruptions, which will impact the economy in the coming days and may impinge upon the ongoing recovery from the economic contraction due to Covid-19.
Conclusively, These reforms will not only transform but will transcend the agro impediments prevailing in the system. These reforms will benefit India and lead towards the 2nd green revolution under the visionary leadership.