A new deal for agriculture

The repeal of the three farm laws must lead to a new conversation on reforms

With Prime Minister Narendra Modi announcing that the government will pilot the repeal of the three farm laws, it is time for the political class to look ahead. Irrespective of one’s views on the farm laws, there is a consensus among stakeholders that Indian agriculture needs a reset. The debate is on the terms of the reset and the process of enabling it. The experience of the past year should not bury the idea of reforms, but instead lead to a new conversation, which takes into account all viewpoints, and is democratic in spirit. Only that can lead to a sustainable change.

Indian agriculture, especially in the Green Revolution states where the farm protests were the strongest, needs to be saved from itself. Depleting water tables, deteriorating chemical balance of the soil, and polluting methods of disposing of byproducts are challenges that the farmers themselves recognise. Indeed, if Punjab continues to cultivate paddy to sell it at the minimum support price and electricity charges are waived because of skewed political incentives, India’s future is bleak. But the reason farmers seem so reluctant to give up on these harmful practices is the assessment that the costs of investing in a better future are prohibitively high. It is here that the farmer needs a policy nudge, along with political persuasion.

The laws focused largely on the transactional realm — output markets, contract farming and storage and movement between harvest and sale — of farming. This was important, but has clear limits. A wider reset of agricultural policy must be guided by three principles. One, ensuring the economic viability of small farmers is key. This is linked to price volatility in the larger market, and not always within the State’s control, but unless this large pool of farmers is assured of returns, there will be no incentives to change farming practices. Two, there needs to be a push for a change in the international terms of trade in agriculture. Again, the State’s power to do so on the global stage is limited, but domestic reforms can’t happen in an internationally inequitable landscape. And three, there needs to be a serious focus on cooperatives — rather than just private businesses — as the way to push reforms; this will give farmers greater ownership, and also help in allaying the trust deficit that exists at the moment. It is time to think of other creative ways to address unsustainable agricultural practices that are entrenched in India, but while respecting popular aspirations.