Farm laws repealed, but ground reality still grim

Avinash Kumar/Kushankur Dey | Updated on November 23, 2021

Farmer sector Bleak outlook   -  PTI

For a diverse country like India a more bottom-up, consensus-building approach to crucial reforms is suited

Policymaking and implementation are an act of bargaining, negotiation, and compromise that provides an expanded scope for balancing competing interests of diverse stakeholders and coalition groups. However, hubris, overzealousness and political expediency are formidable barriers to effective policy framing and implementation.

The Centre’s recent decision to repeal the three farm Acts promulgated in June 2020 represents a U-turn in structural reforms of food and agriculture policies and their integration with global value chains.

Notwithstanding its initial firm stand regarding the conceptualisation and enactment of three farm laws, the government has relented and decided to repeal them.

Political commentators link this U-turn to outcomes of recent by-elections, political developments in Punjab, and upcoming elections in the political epicentre, Uttar Pradesh.

Besides this obvious logic of political course correction, several (un)stated factors might have motivated both the introduction and repeal of farm Acts.

However, such policy U-turns yield multiple system-level implicit and explicit costs.

System-level costs

Despite the objectives of offering remunerative prices to farmers and maintaining national food security, the minimum support price regime has proved inadequate. It has resulted in cereals, especially paddy and wheat, dominance in the food production system, insufficient production of oilseeds, millets, and pulses, which has pushed the country to become import-dependent and amplified spiralling of food prices. It has also brought ecological challenges such as the decline of soil health and groundwater encompassing concerns for environmental sustainability.

Despite the overflowing buffer stocks of cereals and humongous public procurement and distribution systems, food and nutritional insecurities still exist. On the other hand, preventing post-harvest losses and ensuring remunerative prices to farmers seem to be pressing challenges. So, does the repeal of farm Acts without any viable plans to address these multiple challenges bring any relief in real terms to the agrarian economy and farm sector? The answer is perhaps no.

However, it provides political parties with several avenues for reaping political dividends at times. While India and farmers grapple with persistent challenges of economic and social upgrading in farm sector, political parties intend to harvest the maximum mileage out of these changes.

Moreover, several green enterprises and micro-entrepreneurs, including agri-tech start-ups banking on the changes promised under farm Acts, may have to rethink their business models and strategy formulations to harness the scope and scale of their ventures. Thus, as the introduction and repeal of farms Acts imposed several system-level costs and questioned the promises of corporate capital or impact investing in agriculture and agribusiness, it becomes pertinent to explore the ways to prevent such U-turns in food and agriculture policymaking.

Way forward

Deliberation and consensus-building become essential before introducing such phenomenal changes. India's democracy provides several avenues such as parliamentary debates and standing committees, all-party meetings etc., for achieving these changes. Agriculture policies influence more than half of India's population directly, and agribusiness impacts life and livelihoods of farmer, corporates, and public. Therefore, such a proactive approach is more critical.

Second, an incremental approach focused on capturing tangible benefits such as inclusive market, openness, value creation support, high-value commodity trade, and integration with global value chains, among others promised by the farm Acts by demonstrating its superior efficacy in promoting farmers’ livelihoods and welfare in some States, especially in States where the minimum support price regime is not working effectively, could have helped in achieving higher acceptance. Such an approach could have served as a natural experiment providing valuable data for generating insights about the effectiveness of farm Acts.

Third, farmer-centric policymaking should adopt a bottom-up approach, providing avenues for farmers to raise their voice which can be translated into coordinated and normative governance in policymaking. The techno-centric top-down approach has limited prospects of acceptance and success in a complex nation like India where three forms of governance co-exist: private governance (corporate agriculture), public governance (cooperative federalism), and social governance (civil society or NGOs-driven).

In sum, the farm Acts imposed several system-level costs and repealing them does not change the ground reality faced by diverse stakeholders in the production, processing, and distribution of agricultural systems. There is a case for piloting and quantifying various policy initiatives to metrics which would help professionals undertake rigorous examination of outcomes for ensuring appropriate policies influencing farm practices, improving resilience of production and distribution, and environmental sustainability.

Kumar is doctoral scholar or Marketing and Dey is Chairman of CFAM in IIM Lucknow. Views are personal

Published on November 23, 2021

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