IMF backs farm laws but with safety net
WASHINGTON: The recently-enacted farm laws have the potential to increase farmers’ income, but there is a need to provide a social safety net to the vulnerable cultivators, IMF’S Chief Economist Gita Gopinath has said.
Indian agriculture is in need of reforms, she said.
There are multiple areas where the reforms are needed, including infrastructure, the Chief Economist of the Washington-based global financial institution said on Tuesday.
The three agri laws, enacted in September last year, have been projected by the Indian government as major reforms in the agriculture sector that will remove middlemen and allow farmers to sell their produce anywhere in the country.
Gopinath, in response to a question on the new farm laws, said: “These particular farm laws were in the area of marketing. It was widening the market for farmers. Being able to sell to multiple outlets besides the Mandis without having to pay a tax. And this had the potential to raise, in our view, farmers’ incomes”.
“That said, every time a reform is put in place, there are transition costs. One has to make sure and pay close attention that it’s not harming vulnerable farmers, to make sure that the social safety net is provided. Clearly there is a discussion right now and we’ll see what comes out if it,” she said.
Thousands of farmers in India, mostly from Punjab, Haryana and western Uttar Pradesh, have been camping at Delhi border since November last year, demanding a repeal of the farm laws and a legal guarantee on Minimum Support Price (MSP).
So far, 11 rounds of talks have taken place between the government and farm leaders with both sides hardening their positions.
In the last round of talks, the government offered to suspend the laws for 1-1.5 years and form a committee to find solutions, in return for protesting farmers returning from Delhi borders.