Commodities

Way forward for agri reforms

G Chandrashekhar November 22 | Updated on November 23, 2021

The government faces the onerous challenge of acceding to the demand of converting the MSP into a sovereign guarantee

A bold peasantry the country’s pride, Once destroyed can never be supplied”.

Oliver Goldsmith’s immortal lines in The Deserted Village reflect the social conditions in 18th century England. The poetry’s core thought is as relevant today as it was 250 years ago.

Even if well-intentioned, when laws are made without recognising and genuinely appreciating the social, economic and emotional dimensions of agriculture and peasants associated with it, problems are inevitable. This is what India has been witnessing over the last year. There are also Constitutional issues relating to the laws.

And now, converting a socio-political compulsion into a virtuous retreat, the Prime Minister has announced that the three agri-market laws will be taken back. Although welcome, the decision has come at an enormous cost to the nation in terms of the financial and psychological wounds inflicted on the peasantry.

Without a doubt, there are many positive and reformist aspects of the three agri-market laws as enunciated by this writer in several articles in BusinessLine in the last 18 months. At the same time, Constitutional, legal and administrative weaknesses were also highlighted. Sadly, the Centre took no heed.

The vehement opposition to the laws reflects the Centre’s marketing failure as pointed out by this author a year ago (see BL Opinion October 11, 2020). There was no meaningful stakeholder consultation prior to the passage of the laws.

Be that as it may, where do we go from here? Firstly, the laws have to be repealed through a parliamentary process. But that’s not going to be enough. A far more onerous challenge will be to accede to the demand of converting the Minimum Support Price (MSP) into a sovereign guarantee. Farmers also want the procurement system to continue.

Guaranteeing MSP (currently specified for 23 crops) and ensuring that every single grower obtains at least the specified minimum price will throw up enormous financial and logistics challenges for the government. Given the inadequacies of the procurement infrastructure, the government is likely to be bogged down by the enormity of the challenge.

An expert committee is going to examine all the issues. It is critical that the expert committee diligently undertakes stakeholder consultation to understand the ground-level issues threadbare. It may take time. But there can be no two opinions about the need for genuine reforms in the agri-marketing space.

The basic idea of the three agri-market laws like one-nation one-market, a legal framework for contract farming and dilution of the Essential Commodities Act is good and beneficial. But the basic philosophy has to be marketed among stakeholders convincingly through a process of engagement.

Some of the provisions in each of the three laws deserve to be tweaked. Legal and administrative aspects deserve attention, for instance, dispute resolution in contract farming and creating a regulator for private markets.

On current reckoning, it appears unlikely that anything substantial will happen till election results in some key States are known.

(The author is a policy commentator and agribusiness specialist. Views are personal)

Published on November 22, 2021

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