In the Edition, December 09, 2020
By Pradeep S. Mehta
The 2020 Farm Acts, if implemented with a slew of flanking measures and minimum rules and regulations, can bring about the 1991 moment for the Indian agriculture, writes PRADEEP S MEHTA
Our farmers sell potatoes at five rupees a kilo. We, the consumers, buy them at 40 rupees a kilo. However, the recently adopted reform measures will help our farmers get better prices, while consumers will have enhanced affordability.
Taken together, the Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, the Farmers Empowerment and Protection Agreement on Price Assurance and Firm Services Act and the Essential Commodities (Amendment) Act, will offer more choice to our farmers to convert their ‘marketable’ to ‘marketed’ surplus.
There will be more competition in agriculture marketing as over time exploitative local monopolies will get dismantled. Either formally through mandis or informally through moneylending. Our agriculture suffers from market capture on the part of agents. That has created millions of vested interests, who control the local political economy. This is evident from the political opposition to the reforms.
However, the proof of the pudding will lie in its eating. There should not be too many rules and regulations for the implementation of these acts. Minimum Government, Maximum Governance should be the mantra behind their implementation.
Eventually, these reforms will make the minimum support price (MSP) regime redundant. Why a farmer should access the MSP when s/he can get a better price in a free market, provided there is a supporting insurance regime for her/his produce. Therefore, rules and regulations for implementing these acts should be just enough to address possible sources of market failures.
Will millions of our small farmers be able to better market their produce? While the electronically-enabled national agriculture marketing (e-NAM) is gaining popularity among them, they should be encouraged to organise. That is possible if and only if there is a widespread movement for establishing functional farmer-producer organisations in every nook and corner of our country. The government is facilitating its momentum.
Secondly, agriculture related hard and soft infrastructure requires a huge improvement. It will depend on the implementation of the Agriculture Infrastructure Fund worth Rs 100,000 crores. Farmers of those states having better implementation capacity and willingness will benefit more.
Thirdly, these reforms should be accompanied by another law on land-leasing for the betterment of our tenant-farmers. That will attract more investment to modernise our agriculture.
To conclude, betterment of agriculture marketing is the essence of these reforms. Effective implementation along with a slew of flanking measures is needed for arriving at a 1991 moment for the Indian agriculture. Let there be a positive political agenda for that.
PRADEEP S. MEHTA is Secretary General, CUTS International (www.cuts-international.org), a global public policy think- and action-tank on trade, regulations and governance, Email: psm@cuts.org ; Twitter: @psm_cuts
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