Farm reforms: Centre must take States on board

G Chandrashekhar | Updated on October 11, 2020 Published on October 11, 2020

A national consensus will not only pre-empt a legal challenge but also help in smooth implementation of the envisaged reforms

The three major agricultural market reforms Bills — legal framework for contract farming, allowing private markets in addition to APMC mandis and amendment to Essential Commodities Act — have now become law. To be sure, this piece is not on the manner in which these laws were enacted, but on what should be done to make the reforms work. It would be perverse if the government were to gloat over the passage of the Bills or stay smug that they are now law.

New Delhi must heed the voices of the protesters and hear their grievances, real or imagined. It is likely not all protests are born out of genuine concern for the farming community; there may also be some self-serving entrenched interests that are afraid to disturb the status quo.

But, principally, the Central government must start a genuine dialogue with the stakeholders. Obviously, it may not qualify to be called ‘stakeholder consultation’ as we understand it in the normal course — something that precedes an intended action. This time round, consultation is necessary to take on board all the apprehensions of different stakeholders, disabuse their minds of wrong notions about the reforms, and seek their support in implementing them.

The State governments have a major role to play for agri-market reforms to succeed. The Centre has willy-nilly stepped on the States’ toes. States feel slighted that their rights have been encroached upon. New Delhi must realise that opposition to the reform laws reflects to an extent some of the shortcomings of the laws, but more importantly, failure of the Centre to take the States into confidence. Simply put, it is a marketing failure.

Call for a meeting

So it is critical the Prime Minister himself seizes the initiative to call a meeting of all the States and hear them out first. The outraged States must be placated by taking on board their concerns and making appropriate amendments to the law. A national consensus is necessary without which the implementation of reforms will be tardy.

Such a consensus will also pre-empt any possible legal challenge to the reforms. It is necessary for New Delhi to place on record that at least in the short-run, there is no intention to dismantle the minimum support price regime or stop procurement through government agencies. Healthy competition between APMC mandis and private markets will be beneficial for growers as they will have greater marketing freedom. A strong regulatory oversight for the private markets will improve the confidence levels of market participants.

At the same time, the State governments must work to strengthen various APMC marketing yards. It is necessary to de-politicise the mandi committees, infuse more transparency in their functioning, build operational efficiency and make them user-friendly or farmer-friendly.

APMC markets have their own strengths in terms of infrastructure which the State government can leverage to attract more agri trade. Indeed, APMC mandis have the capacity to compete with private markets and give the latter a good run for their money. To bring uniformity in all markets, cess levied on APMC transactions can be waived.

On contract farming, massive education is necessary among groups of growers and farmer producer organisations. Commodity boards, export promotion councils and trade associations can undertake awareness and training programmes for growers. They should be made aware of various techniques covering the manner and timing of fixing contractual prices for agri crops.

In its present form, the dispute resolution mechanism is weak. The concerns relating to dispute resolution are not frivolous. The district administration is hardly the body equipped to enforce contract performance or resolve contractual disputes. Parties to the contract under the new law must be directed to register the contract with the district administration. However, a robust and transparent mechanism for expeditious resolution of disputes would generate more confidence among contracting parties.

Given the importance of agriculture and related activities for our economy and our quest for Atmanirbhar Bharat (self-reliant India), it is necessary for agriculture to succeed. Unfortunately, the positive reform measures have been twisted into negative messaging in some quarters.

The damage must be undone. When we say the reforms are farmer-centric, we must hear out the farmers and address their concerns.

One is reminded of Oliver Goldsmith telling lines in the poem The Deserted Village: “A bold peasantry, the country’s pride, when once destroyed, can never be supplied.” We must do everything to support our fellow agriculturists so that they pursue their calling with dignity.

The writer is a policy commentator and agribusiness specialist. Views are personal

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Published on October 11, 2020
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