‘Protesting farmers aren’t demanding change, they want status quo’
3 min read . Updated: 08 Feb 2021, 07:51 PM IST
PremiumEconomist Surjit Bhalla says farmers protesting against the new laws benefit poorer farmers for whom MSP has been exploitative
Over the past week, celebrities, both Indian and international, have been talking about the farmer protests on social media. Whether they support the government or the farmers, whether they’re tweeting from a toolkit or reading, working out the nuances for themselves and then posting their own opinions, it’s a stormy debate that isn’t going to blow over anytime soon. Economist Dr. Surjit Bhalla, who is currently executive director for India, Bangladesh, Bhutan and Sri Lanka at the International Monetary Fund (IMF), weighs in, saying the Centre’s three new farm laws, which the farmers have been resisting for more than five months, are crucial reforms in a sector that’s been tied down for decades. He has served on Prime Minister Narendra Modi’s Economic Advisory Council, and was an advisor to the 15th Finance Commission. Edited excerpts from an interview:
You’ve said the Modi government’s farm reforms are necessary and should not be feared. If you were to speak to the farmers, what would you say to assuage their concerns?
A: The farm laws allow more freedom to each individual farmer to do as he or she finds best. If they find the APMC (agricultural produce market committee) the best, they can continue to [use it]. There is nothing in the law that says that they should not go to an APMC. This is the first time I have seen a protest without any kind of logical basis. Protest means, ‘I am being hurt, it is unfair hurt, and I demand a change’. What is the change that they want other than to go back to the status quo, which is something that hurts other farmers?
The farmers say they fear loss of ownership of their land holdings. They see the role of mandis diminishing over time, which could leave them at the mercy of corporate buyers. So they want the minimum support prices (MSP) guaranteed by law.
A: What is the new provision in the laws that allows farmers’ land to be taken away? Those farmers who fear exploitation by corporate farmers can choose not to sell to corporates. Instead of bringing tractors to Delhi and causing disruptions, what the farmer can do is organise the other farmers not to sell to the corporates. It’s their right. Nothing in the law says they have to sell to the corporate. Nothing in the law says they cannot democratically talk to the other farmers and decide not to sell to the corporate because they may be exploited. As regards the MSPs, so far there has not been a legal guarantee for the MSP. It has never existed in India or anywhere else in the world. I won’t even go into how exploitative the MSP is for the poor farmers. These objections are beyond reason.
Do you think income support is better than MSPs, which can be distortionary, given the economics of these two different policy tools?
A: Income support is a major reform the Modi government has brought about. Farmers already have income support of Rs. 6,000 a month through direct benefit transfers (DBT). I think DBT is a very efficient way to solve income distribution problems. I’ll tell you why the protesting farmers will not like that: Any sensible income support argument has to be based on what income you have. The protesting farmers are in the top two percent of all income earners in India. These are rich farmers. Do you think they should be getting income support? Income support will not be accepted by these farmers because they [are too rich to qualify] for the income support. My final point is that the state where most of the protestors are from, Punjab, the farmers find the MSP system very profitable. The Punjab government did a report—I think in June 2020—on the state’s response to covid-19, and some of the most eminent economists in India worked on it, among them Montek Singh Ahluwalia and Ashok Gulati, and they recommended exactly the same laws. The report has a foreword by the chief minister [Amarinder Singh]. I throw the question back at you: Why are the farmers protesting?
Would you say then that the political leadership needs to do more to bridge the trust deficit of the protesting farmers? Or is it a case of disinformation?
A: Do you think the political leadership hasn’t reached out to them? I am amazed by the unreasonableness of the protesting farmers and their supporters, and among them, the many prominent economists. Many seasoned economists are crying foul on industrial protectionism, where the facts don’t support [the opposition] that much. But where the facts prove that protection to agriculture benefits only the rich farmers, they have cried foul the other way [by backing continued protection].
