How can the government revive agricultural reforms?
The article has been authored by Akanksha Gupta, senior associate, Centre for Public Policy Research.
No one is a stranger to the swift method in which agricultural reforms of 2020 were brought out by the government. These farm laws were aimed at the growth of the livelihood of 9-10 crore households that depend significantly on agriculture. It was also geared towards opening up the agricultural sector and making it lucrative for all engaged in the sector through external investment and direct income support. However, the passing of the laws in a blink of an eye sent the country into a tailspin for over a year with growing farmers’ discontentment and never-ending protests amidst the global pandemic. The protests led to the formation of the Supreme Court Committee (SCC) in January 2021 and also the eventual repeal of the laws by the end of 2021.
The findings brought out in the SCC report at the end of 2021, indicated that the majority of the Farmer Organisations (FOs) that participated in the discussions supported the farm laws in its entirety, while a few supported it with minor suggestions and a meagre four did not support it at all. Albeit, if looked at critically, the report could act as a kickoff pad for the Modi government to revisit the farm laws and bring out a plan of action that would aid in the successful implementation of the agricultural reforms. After critical evaluation of the entire chapter on farmers' protest and the SCC report, a few crucial learnings have come to light. If the Modi government chooses to act on reviving the laws, it needs to be cognisant of its strategic communication, predominantly since the policies in discussion impacts crores of Indian farmer families and have the ability to be a widely politicised point of contention.
There are three crucial steps the government can consider while undertaking to reform the agriculture sector. Firstly, the communication gap between farmers and what the government intended through these Acts needs to be addressed. Secondly, the scope of the laws which left the majority of the farmers feeling vulnerable and was widely leveraged by the Opposition, needs to be broadened. Thirdly, work on reducing the disconnect between the Centre and the states.
The first course correction would be holding stakeholder discussions with farmers, farmer representatives, government officials and even corporate functionaries collectively. Since the laws witnessed a large level of angst among the farmers from Punjab, Haryana and western Uttar Pradesh, predominantly due to lack of awareness and poor communication regarding the details of the laws, it is imperative that the government rectifies this by discussing and deliberating on these reforms, specifically involving representatives from the three states.
One classic and most recent example of an opportunity lost was the announcement and formation of the MSP Committee in July 2022 wherein provisions were made for a total of 26 members, including only three members from the Sayukt Kisan Morcha (SKM) to discuss matters on MSP and related things. The government seems to have overlooked the importance of having representatives from the three protesting states and instead invited farmer representatives from Odisha, Sikkim, Karnataka and Andhra Pradesh. This action led to the not so surprising reaction from SKM which not only boycotted the MSP committee but also widely discussed their plans for further protests in the coming months. They believed the MSP Committee showed the government's disregard for the farmers reflective in the committee members they chose, coupled with the delayed announcement of the Terms of Reference of the Committee.
Stakeholder discussions should also include the discussions around the creation and strengthening of Producer Organisations (POs), on the lines of India’s dairy sector. The dairy sector of India makes for a successful example of how milk producers formed small clusters through cooperatives and brought about a dairy revolution. At present, farmers view organisational mechanisms in a very traditional way. Building institutional mechanisms within their community will go a long way in addressing their inhibitions regarding market liberalisation. Representatives from existing POs could partake in these discussions, to give protesting farmers more knowledge on how the POs’ work successfully with corporates. Similarly, even corporate stakeholders could be brought on board to share their experiences of working with the dairy producers' community.
The government must methodically plan stakeholder discussions especially in the states of Punjab, Haryana and UP, and bring farmers, corporates and everyone involved in the same room to discuss a way forward with farmers growth and agricultural sustainability at the core of the discussion. It is also pivotal that the FOs are represented in all such discussions and committees when given the opportunity, unlike in the case of the SCC and MSP Committee wherein both witnessed zero participation from opposing FOs. The success of these discussions is only possible with every stakeholder's participation.
With the stakeholder discussions come the government's understanding of why the laws induced such potent opposition from the farmers. There is a need for the government to broaden the scope of the bills to formulate a truly holistic policy and try to address all possible gaps that could come up in the policy cycle of these reforms. As per the SCC report, the government must incorporate provisions regarding the protection of the interests of small and marginal farmers; mention contractors/investors as suppliers of seeds, pesticide, machinery/technology, and other inputs; enable time bound court related decisions; and formulate a strong legal ecosystem for farmers.
If the government is truly motivated to liberalise the Indian agricultural sector and increase the farmers' income, the reforms should also incorporate mechanisms to build capability and capacity to equip the farmers to utilise the laws for their growth and welfare. For example, the government should consider creating an Alternative Dispute Resolution (ADR) after holding discussions with experts, introducing contracts in vernacular language and revising the provision of the ‘option to select board members by the parties’ in ADR to ensure the protection of farmers rights.
Furthermore, local governments could also be encouraged to open mediation cells to settle dispute between the farmers and the other parties. Simultaneously, the local self-governments should also make farmers in the states aware of these cells' existence and their importance. Actions like these could go a long way in gaining farmers trust in the government’s intention. These provisions should also find their way during the stakeholder discussions as this would strengthen the communication around these reforms within the farming community pan-India.
Creating holistic reforms keeping all states and farmers in mind will ensure the implication of these central laws by the state governments, and it could bring cohesiveness and collaboration. It will work in everyone’s benefit if the government can create a symbiotic relationship with the states to reform and liberalise India’s agricultural sector.
The excessive subsidies have neither grown the farmers' income nor strengthened agriculture productivity. The decreasing land size, poor agricultural infrastructure, weak value chains and reducing water tables, increasing heatflation due to climate change are all are going to make matters worse for the farmers and India’s agriculture in the coming years. Hence, building the capacity and capability of farmers is the need of the hour and by liberalising the sector many of these issues can be addressed.
Before it becomes another forgotten matter, the government should capitalise on the momentum and undertake steps to revive the farm laws, in its new and improved form. Until then, the wheel will keep on spinning using the same old formula, with little or no respite for all engaged or wanting to get engaged in agriculture and allied services.
The article has been authored by Akanksha Gupta, senior associate, Centre for Public Policy Research.