Farm Laws | Reforms and consensus do not always go hand in hand

Why is this so?

Agriculture has remained a sensitive subject to tinker with because any well-intentioned move is fraught with huge political risks. A network of vested interests in the trade, particularly in states such as Punjab, and their entrenchment in all political parties, found it expedient to do nothing big to address the real issues of the ‘annadatta’ (the food provider, the farmer in this case).

After the woes of the Land Acquisition Bill in his first term in office, the government realised the pitfalls of its efforts after the legislation got stuck in a tedious parliamentary process. Finally, it had to be dumped in favour of letting the states decide how to make it easier for the industrial growth to take place.

It is in this context that Modi focused his government’s attention on the agricultural reforms. The Bharatiya Janata Party’s (BJP’s) 303-plus mandate in the Lok Sabha polls encouraged Modi to look at the unfinished business of reforms of the rural market with the objective of doubling the farmers’ income by 2022.

That such promises were made even in the manifestos of the opposition parties, particularly the Congress, strengthened the case for opening up opportunities for farmers to sell their produce on new platforms, in addition to the traditional mandis. The COVID-19 crisis and the resultant impact on the economy also posed an opportunity for the government to take up these farm reforms speedily. Sadly, the Opposition saw another window to corner Modi by raising the baseless charge that the interests of the farmer was being discarded to help private sector profit.

Farmers in many states seemed enthusiastic to the new farm laws, but their counterparts in Punjab, who’ve thrived because of a system where the government buys their entire produce of wheat and paddy under a minimum support price (MSP), nurtured fears. Some of these fears were genuine. But a majority of them were prompted by the ‘arhtiyas’ (middlemen) who sensed a loss of business and competition if the laws were implemented.

Punjab faces a unique problem because the MSP system has left little room for moving away from paddy and wheat to high-value crops and livestock.

For farmers and traders from Punjab there’s no reason to shift to a new system because each farm household currently gets subsidies that are more than double of what farmers in Andhra Pradesh, Tamil Nadu, Madhya Pradesh and Gujarat get. It does not matter to political parties in Punjab that the Food Corporation of India (FCI) is forced to buy paddy and wheat from Punjab, even if it has led to overflowing godowns and buffer stock in excess of norms. This glut has led to about Rs 180,000 crore being locked, and much of it rotting.

The agitating farmers who are on the streets close to Delhi-NCR are fighting for status quo, and are aided by political groups opposing the BJP. Instead of negotiating for a package to help the farmers to diversify their agriculture, the ‘kisan unions’ have stuck to a maximalist position: either repeal the farm laws or face the siege of Delhi.

Some politico-religious groups see here an opportunity to revival of their religious identity politics. The Congress, the Aam Aadmi Party, and the Akali Dal, eying the 2022 assembly polls in Punjab, are indulging in competitive populism.
The question is: How will the standoff between farmer unions and the government end?

At stake is India's future to a faster growth. Many agree that the farm laws are a major step in liberating India’s farmers from a vicious cycle they are trapped in. These reforms provide the legal and administrative basis to permit contract farming while protecting farmers’ rights. For decades now agriculture in India has been crying out for reforms, and the chronic distress farmers face is a consequence of policy frameworks that keep them trapped in a cycle of low productivity.

But can big-ticket changes be abandoned or postponed because of fears of the future?

There’s no denial that the protests around Delhi may also represent a significant moment in mass mobilisation in India. But good politics involves the ability to negotiate, reconcile the demands of a movement with the possibilities of what can be attained, a recognition of the balance of power, and when to declare victory. This element of politics is missing in the farm movement today.

The government has adopted a conciliatory approach thus far, willing to address the farmers' misgivings over the new laws, and even ready to give written assurances that the MSP would continue if the kisan unions drop the demand for repealing the laws. The government has more than signalled that it is willing to concede changes in the farm laws.

First is an offer to amend one of the new farm laws to levy trade fees — like the officially state-notified mandis do — for a level playing field. Outside businesses would pay the levy like the mandis do for the produce they contract to buy from farmers. This is because mandi operators fear their market would be wiped out if other entrants do not have to pay tax.

Second, instead of a free-for-all, new traders from outside any state, say Punjab, would have to get registered, display their price rates and show transparency so that mandi traders are not undercut by foul means — without endangering the competition. Third, one of the new farm laws allowing for contract farming could be further tweaked to protect further land-owning rights even if its provision already debars any change of ownership. Finally, disputes arising out of the new contract farming law can be dealt directly by civil courts — instead of sub-divisional magistrate within 30 days (as provided in the new law).

No reform has ever happened out of a complete consensus. Former Prime Minister PV Narasimha Rao’s economic liberalisation took place not because of consensus. They happened under an economic crisis. It’s high time, politics and emotions took a back seat, and a reasonable approach is adopted by those groups who claim to speak for the farmers' future.