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India’s agri-reforms must take farmers into confidence

Filed on January 12, 2021

Indian farmers are no strangers to market conditions that often make the prices of their produce plummet.

India has been mulling over agricultural reforms since 2003. The broad idea had been to homogenise the big Indian market, ensure farmers all over the country have better access to prices for their produce and are able to churn the crops as per the needs of the country rather than remain tied to the economics of the field. The three farm bills introduced by the Narendra Modi government last year, which have since been rushed through both houses of parliament, are indeed a step in that direction. Many industry experts have hailed it as reforms that will liberalise the sector, and yet the country has been seeing mass protests by farmers, especially in the north. What these reforms lack is the trust and confidence of the farming community. The Supreme Court of India has put a stay on the implementation of these bills and suggested forming a committee to list out the grievances, which should have been done by the government in the first place. The agriculture sector is the largest employment generator in India but there is a need to make it more productive and lucrative for the farming community. However, to rush reforms without fully making the farming community aware of the merits of these changes and not having enough discussions at the grass root level have allowed political chicanery an upper hand and hence the prolonged protests.

These bills aim to remove various distortions at the production and marketing levels that have long plagued the Indian agricultural sector. Indian farmers are no strangers to market conditions that often make the prices of their produce plummet. If in one season there is a glut for certain perishables because of lack of storage facilities, other seasons have seen the prices of staple crops skyrocket, causing high food inflation. The government’s intent is to match prices dictated by the markets at the farm gate, which can happen when there is a standardisation of pricing across the country and a set payment settlement mechanism in place. The Indian sector needs food storage facilities, and one of the most efficient ways to build these is to open up the field for the private players, who have the capital and long-term interest in the sector. The deficit of trust with the private sector in agriculture is one of the main reasons behind the anti-farm bill protests. The Modi government should take this opportunity to listen to the grievances of the farmers, address them, and also factor in measures to ensure the private sector plays by the rules and it is not just a handful who have access to the sector.





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