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Farmers, migrants, daily-wage labourers face uncertainty due to the lockdown triggered by the covid-19 outbreak.
Farmers, migrants, daily-wage labourers face uncertainty due to the lockdown triggered by the covid-19 outbreak.

Opinion | PM Modi’s idea of taking markets to Indian farmers

The Union government is deploying its social capital to bankroll a reset in agriculture

On Friday, the Union government promulgated a clutch of ordinances setting in motion an idea for the radical makeover of Indian agriculture. Upending the prevailing dynamics of the farm produce business, the proposed changes in law seek to take the market to the Indian farmer; in the process lending more heft to the idea of ‘One Nation, One Market’.

A powerful idea that will essentially dismantle decades-old barriers to harvest, store and market farm produce. The impact could be dramatic, especially if one keeps in mind that over three out of four cultivators are classified as ‘small farmers’; by definition they start with a handicap when marketing their produce in an ossified institutional set-up. Further, once again, particularly relevant for small farmers, one proposed law looks to de-risk farmers from the vagaries of price volatility by placing the onus on the buyer of the produce—which, going forward, is now open to big corporates.

The ordinances introduced by the Bharatiya Janata Party-led National Democratic Alliance once ratified by Parliament (and more importantly, once implemented in spirit and form) will not only accord fiscally beneficial choices to the farmer, but also chip away at hitherto politically impregnable structures, which have successfully retarded social and economic change in rural India.

To be sure, this is not the first time a Union government has tried to undertake a makeover. Past efforts have focused on dismantling the Agriculture Produce Market Committee, which so far has been central to the sale of farm produce. Since agriculture is a state subject under the Constitution of India, the reluctance of states to fall in line meant the previous moves went nowhere. What probably is different this time is the fact that there is an enabling environment.

For one, aspirations of the people, unleashed over the last decade and more, will ensure that cynical political skulduggery, which in the past nixed radical reforms, may come at an electoral cost. Further, the continued spotlight on rural distress, which has devastated India for the last 10 years, has given a political voice to the otherwise neglected Indian farmer. At the same time, it has become clear to the economic pundits that the agrarian sector, despite its small share in gross domestic product, or GDP, is key to the consumer economy. Prolonged rural distress forced a contraction in demand, which is reflecting in the fortunes of consumer goods companies. Without a radical makeover, especially with respect to boosting farm incomes, agriculture cannot reclaim its status in the Indian economy.

At the same time, the devastation caused by covid-19 is encouraging bold and out-of-box solutions, particularly since it is abundantly clear that the status-quo mentality, denying upgrades to the health infrastructure, is exactly what has left India so vulnerable to this pandemic, which originated in Wuhan, China. The invoking of the National Disaster Management Act (NDMA)—which is tantamount to a national emergency—has only further strengthened the hands of the government in its ability to execute such ideas without the usual amount of push back.

It is clear then that the government is deploying its social capital to bankroll a reset in agriculture. To a large extent, its success will depend on how states play ball.

Anil Padmanabhan is managing editor of Mint and writes every week on the intersection of politics and economics.

Comments are welcome at anil.p@livemint.com

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