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The Narendra Modi-led government at the Centre was unsuccessful at coming to grips with the political economy of agricultural policy-making.
The three Farm Acts — The Farmers Produce Trade and Commerce (Promotion & Facilitation) Act, 2020; The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020; and The Essential Commodities (Amendment) Act, 2020 — failed to meet the political feasibility criterion.
The Modi Government’s project to double farmers’ income’ through reforms was initiated before Covid struck. The crises following the pandemic have, in fact, given more autonomy and impetus to policymakers to usher in schemes like Atmanirbhar Bharat , which might have been difficult in normal times.
Similarly, farmers may have accepted the reforms as part of structural adjustment made inevitable by the lockdowns. But the Centre failed to create a climate of consensus.
According to the Opposition, the party in power could push through the Acts, thanks to it having a majority in Parliament, and that it repealed the reform-oriented farm laws over election concerns in poll-bound States of Punjab and Uttar Pradesh.
In democracies like India, farmers’ vote bank is very influential.
The 2004 elections were won by the UPA on the promise to resolve the “agrarian distress.”
In the current context, collective action of political parties was missing in the policymaking on farm reforms.
However, the biggest question on Minimum Support Price (MSP) remains unresolved even after the repealing of the Acts.
A legally binding MSP would be the next issue the farmers and their unions will press for. Whether MSP policy will increase budget allocations to agriculture remains to be seen.
Effective instruments needed
Policymakers need to explore effective instruments for agriculture marketing reforms. In its first move at reforming agriculture trade, price and subsidy policies through the three farm laws, the government ran into a political economy challenge.
Prime Minister Modi needs to give another ‘ panchamrit ’ formula to secure the future of agriculture.
Firstly, improving the commodity markets and risk management by linking producers to modern supply chains and maintaining international competitiveness.
Secondly, supporting smallholder competitiveness through institutional innovations like farmer producer organisations (FPOs), which have the potential to emerge as financial service providers, and efficient input as well as farm gate-markets.
Thirdly, making agricultural systems more environmentally sustainable by improving water management, and greening the green revolution for inclusive development.
Fourthly, moving beyond the farm by raising rural non-farm employment.
And fifthly, innovating through science and technology. Indian agriculture needs genetic improvement along with zero-budget farming by investing more in research and development, and through effective extension of ICT (information and communications technology) in agriculture.
Ultimately, the political economy will determine the extent and pace of future reforms for welfare of the farmers.
The writer is Managing Director,
MAHA FPC
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