The farm laws: Lessons in policymaking

The new legislations are steps in right direction, even as protesters have made valid points

Veena Narain | February 2, 2021


#Agriculture   #farm laws   #protests   #parliament   #supreme court  


Parliament last year passed three laws relating to agriculture. They offer three basic freedoms to farmers; first, the freedom to sell the produce anywhere they like; second, the freedom to store inventory which was earlier constrained by the Essential Commodities Act and third, the freedom to make forward contracts. These reforms seek to break the monopoly of the agricultural produce marketing committees (APMCs). They seek to remove the spirit of irrational controls. They also seek to raise farmers’ incomes through higher productivity by using scientific methods and growing high value crops (though farmers do require financial support for that).

Farmers should have enough finances to use methods to increase productivity by growing high value crops. Further, in principle, farmers should be free to lease land to agricultural professionals with capital and technology. They can work as workers on the same land or can organize themselves in the form of co-operatives.

Questions are raised about contract farming but it has brought good results in many states.  It will help the farmers without the capital invested. The dairy industry has also flourished because of the freedom given to cattle breeders to do their business. Why can’t small and marginal farmers be given similar freedom?

A powerful narrative in support of the laws is that private corporations such as Nestle and Hatsun have been buying milk from small producers along with government co-operatives for years thus increasing the demand for milk. However, a counter narrative is that some regulatory laws are needed to provide a mechanism to check market manipulation in APMC markets; as non-price means of exploitation such as weighing, grading, etc may come to exist.

The biggest fear of the farmers’ protesting against the bills is perhaps that the MSP (minimum support price) will go away. However, it could be argued that this fear is perhaps unfounded as the government still needs procurement for ration shops. Though the policy for MSP, critics argue, is not justified as it leads to over production of wheat and rice and under production of pulses and other crops.

The farmers’ fears are mainly as follows: first, with the planned deregulation of MSP, government purchases will be replaced by corporate buyers; second, the Amendment of Essential Commodities Act may encourage big players influencing markets by their stocking policies; and third, farmers receive subsidies the world over, the US and China, which offer them buffer and protection. On these grounds, they have demanded that the government should with draw these laws and create new ones that incorporate the perspective of the farmers.  They also want a legalisation of the minimum support price.

They also point out that if agriculture is a state subject, then what empowers the centre to make laws on it? In defense of the laws, the government says that it wants to liberate farmers from the shackles of the mandi (the wholesale market) so that they can sell their produce anywhere at their own price. Farmers are unconvinced about this neo-liberal narrative and claim that the laws were enacted for promoting trade. Hence they are protesting. They have completely rejected the centre’s proposal to amend the laws. They want a repeal of the laws and want to intensify the stir.  

The government is willing to discuss farm laws clause by clause; farmers’ unions have, however, rejected the proposal and continue to protest and organise rallies in different parts of the country. Not only has the agitation gained momentum among farmers, but also caught the imagination of the opposition and social and religious groups. The Aam Aadmi Party (AAP), under the leadership of Arvind Kejriwal, has expressed support for the agitation. The Delhi chief minister tore up the new agricultural laws! The Delhi Sikh Gurudwara committee, too, is supporting the farmers: it has set up night shelters and facilities for their food; a roti making machine installed can make up to 30,000 chapattis through the day! The supreme court has taken up the task to form a panel to resolve the center – farmers’ deadlock. The court has urged the government to consider putting the new farm laws on hold.

Aggravating the economic impacts of the lock downs introduced following the Covid-19 pandemic, the protests have started to have adverse effects on the economies of the states of Haryana, Himachal Pradesh and Jammu and Kashmir, and the city of Jaipur. The lanes of NH 48, passing through Delhi, have been blocked and the traffic has been badly hit, disturbing supply chains and posing hurdles for producers and consumers alike. Economic activities came to a halt translating into a daily loss of Rs.30,000-35,000 crore. Estimates suggest that farmers’ protests may increase logistics costs by 8-10%. Some farmers have also died at the protest sites. On the Republic Day, the protests turned violent, presenting a rude shock to the citizens and police alike.

The fate of the agricultural laws and the farmers affected by them will be shaped by which of the narratives surrounding the laws prevails. However, the protests have brought out two major issues. First, in making drastic departures from existing policy choices, it is necessary to first garner policy support. In this case, the government could have made some efforts to mobilise support from farmers before making a drastic departure from existing policies. The fact that the government has offered to suspend new farm laws for 18 months suggests the policy process to be a highly interactive one, in which policy outcomes are unpredictable. Governments can no longer afford to make sweeping reforms in a linear, top-down fashion. Second, the protests have made the female farmer visible, with large numbers of women joining the protests. The stereotype of the male farmer, holding a sickle and plough, has been shattered.  Feminists have for long criticised the inability to account for women’s unpaid contribution at home and on the farms. Women provide silent, arduous and unpaid labor on the fields. Even as a representative of the judiciary had expressed dismay at the presence of women and elderly braving extreme cold weather in the protests, women proved that were as skillful at the tractor as they were fetching water, fodder and fuelwood for their homes.

Veena Narain is former Reader, Economics, Delhi University.
 

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