The Supreme Court docket took a sensible stand on the farm commerce laws — implement them after session and with a well-defined framework spelt out. It led to the stand the federal government has taken — of holding the laws in abeyance for 18 months. This can present the time for discussing particulars of agricultural reform, which is important because the laws had been handed in a rush.
To start with, it must be understood that in a continental nation, a one-size-fits-all prescription is not going to work. In Punjab, Haryana and western UP, minimal help worth (MSP)-based agriculture has a logic. It was stunning to learn a well known agricultural economist say that the area must get out of the rice/wheat rotation. Not all areas must diversify. When you’ve got nice alluvial soil, good irrigation and nearly a century-long custom of the appliance of science to agriculture, then there’s nothing that claims don’t develop the highest-yielding paddy and wheat on the planet. That is the flawed recommendation on diversification. It’s like telling Gujarat and Maharashtra to get out of dairy or cotton. In south Punjab, with much less irrigation, and components of Haryana not lined by the Indira Gandhi Canal, some diversification to pulses, cotton and so on. may work however the stable specialisation on this area stays.
The argument that non-public commerce anyway exists is deceptive. Arhtiyas (middlemen) are essential in Indian agricultural markets. They’re part of the availability chain in north-west India. Right here they don’t seem to be just like the middlemen elsewhere. They perform merely as brokers of the procurement companies. This was completed by the Manmohan Singh authorities to scale back overhead prices of procurement.
Numerous the theorisation on personal commerce within the north-west takes place in Krishi Bhawan. The intermediary in north-west India wouldn’t dare to tackle the FCI and the mai baap sarkar. Those that pushed the farm laws on the final day of Parliament are from different areas, the place procurement doesn’t work and the unfold of markets must be inspired in regular instances. MSPs in these components are like ghost cash — one thing which labored at another time or place. However to disregard it in north-west India is simply not kosher.
To say that e-markets, forwards and farmer-managed firms (the final as designed by a committee I chaired initially of this century) are all great is to be with the angels. However to suppose they’re the dominant mode of rural organisations 20 years later is naive.
Agriculture is the one good sector on this hellish yr. So, we have to strengthen it, not feed off on its glory, even exterior north-west India. We now have the biggest unfold of agricultural markets on the planet in line with spatial maps. However they don’t seem to be APMCs. With weak markets (exterior of grains) and with out first-stage processing and different infrastructure, the farmer is aware of he’s on the mercy of the dealer and comes out on the streets when that isn’t understood. When good agricultural land was to be given to Suzuki in central Gujarat, farmer chief Lalji Desai introduced a thousand tractors with ladies and kids on the highway. Sanat Mehta and I joined them and spoke to them in Gandhinagar. However they insisted on direct negotiations. It’s taking place once more. The dealer is the normal exploiter and the animus between the lala and the Jat is the stuff of folklore. No marvel s/he’s out on the highway in Punjab.
Coverage can do so much, however some warning in a nasty non-agricultural yr received’t harm anyone. In a standard yr, one would have recommended that if the market is there, the state ought to use its leverage. However on this yr, the state will combat stagnation after the pandemic and is not going to have the time to intervene with that selective contact.
The MSP was in its glory when Marxist economist Ashok Mitra was chairman of Agricultural Costs Fee within the days of obligatory procurement and zonal restrictions. Every crop had its personal report then. Once I took over, I made a decision, since costs play an allocation function, there’ll solely be two stories, one for kharif and one other one for rabi, aside from one for sugarcane (an annual crop). Within the 1982 rabi report, I stated relative costs and, in that context, MSP had the function of an intervention mechanism when markets failed, exterior the obligatory procurement space. Later, the idea of transport prices and managerial prices grew to become essential and a conceptual report I used to be commissioned to write down was categorized. The final time I argued for a “honest” MSP to states like Rajasthan and Gujarat was as an advisor to the then finance minister, Jaswant Singh, along with Ram Niwas Mirdha, former deputy speaker of the Rajasthan meeting and a champion of dry land agriculture. Sharad Pawar, a kisan at coronary heart, summarised my conceptual report and launched it in a Parliament query, realizing full nicely that obligatory procurement MSPs had been a ghost idea exterior north-west India. Right this moment, when the farmer agitates on MSPs, s/he says don’t be unfair to me.
The Important Commodities Act must be ditched along with the medical waste of the virus. Subsequent yr, after COVID recedes, we are going to use all these pretty laws we have now all the time needed and begin the gradual stroll to the land of perennial sunshine. Good laws are good as a result of progress begins with them. However not all laws are good all over the place.
First let’s wait out the COVID. From Mehsana to Navsari and Nashik to Mumbai, the milk practice must run once more. Then a modified model of the laws with a roadmap may be on the agenda — not all over the place, however most locations exterior the lands of the 5 rivers. The kisan might then be with us and many instances she is a girl, who not solely serves the langar, but additionally does agriculture.
This text first appeared within the print version on February 17, 2021 beneath the title ‘One regulation can’t match all’. The author, an economist, is a former Union minister