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Home / Opinion / Modi’s backtracking on farm laws has given the tiger a taste of blood

With the repeal of India’s three farm laws, the Narendra Modi government has given the proverbial tiger a taste of blood. Naturally, the tiger now wants to gorge. And once you have opened the cage door and let the beast out, it is extremely tough to get it back in. The repercussions could be grave across the economy.

The government has agreed to set up a committee to discuss how to ensure minimum support prices (MSPs) for all farmers. The Samyukta Kisan Morcha (SKM), the organization that led the agitations against the laws, is insisting that farmer representatives on the committee must come only from SKM—other organizations like the Shetkari Sanghatana have strongly supported the three laws.

The families of the 700-odd farmers who are supposed to have died during the agitation will be paid 5 lakh and a government job given to one member of each family. All cases against the agitators will be unconditionally withdrawn. Stubble-burning has been decriminalized. Even the Central Electricity Amendment Bill, an important reform bill, will not be tabled in Parliament without consulting the SKM.

In the 30 years since India’s economic reforms began, the one sector that remained nearly untouched was agriculture. The current system was heavily skewed in favour of rich farmers and middlemen, and the ecologically disastrous and economically perverse cultivation of rice, wheat and sugarcane. Colossal amounts of grain rot in our godowns every year, and the sufferers are poor farmers, farm labour, taxpayers and almost all the rest of us.

Think of this. Forty years ago, experts were bemoaning that 35-40% of our fruits and vegetables perish on their way from the farm to market. That figure still is the same.

The three farm laws tried to correct some of these structural anomalies while making the sector attractive for new investment. In fact, the laws were not even a new idea. In the past 20 years, several government committees—both central and state—have recommended similar changes. The Congress’s 2019 Lok Sabha election manifesto too promised to “repeal the Agricultural Produce Market Committees (APMC) Act and make trade in agricultural produce—including exports and inter-state trade—free from all restrictions".

Bringing all crops under the MSP system will cost the government trillions of rupees extra. And of course there will be demands for price hikes every year. The additional expense will have to be passed on through taxes. Food prices will rise, the necessary shift away from rice, wheat and sugarcane could stop, and there will be little incentive for private investment. Exports will wither, since the MSP may be higher than global prices in most cases. In effect, an entire sector of the economy will be fully de-risked and protected with other people’s money. No future government will have the gumption to go back on this.

But even greater dangers loom now. Some of Modi’s ardent supporters have called the climbdown another “masterstroke" of his and some others a “one step back, two steps forward" strategy. Most have pointed to the coming elections in Uttar Pradesh (UP) and Punjab and believe that the repeals improve his Bharatiya Janata Party’s chances in UP and have clinched an alliance in Punjab with Captain Amarinder Singh. Others see this as an act of wise humility that raises his stature. But a few questions linger.

One, UP. Let’s face it, Modi accepted defeat. When a war is won, how likely is it that the victorious farmers of western UP will vote for the losers? Especially when it was the losers who began the war by bringing in the three laws?

Two, all numbers indicate that at most 6% of India’s farmers—plus middlemen—could have been hurt by the laws. They almost wholly reside in two-and-a-half states—Punjab, Haryana and western UP. Why did chief ministers like Mamata Banerjee and Pinarayi Vijayan, implacable foes of the Modi government, stay aloof from the farm protests (though both congratulated the agitators after the repeals)? Perhaps because the laws would have benefited a majority of their farmer voters? In fact, states like Maharashtra have been deregulating APMCs.

The agitators defied all pandemic regulations, seriously disrupted the lives and livelihoods of millions of people in the National Capital Region for many months, and some even tried to raise a flag with a religious symbol at the Red Fort on Republic Day. And in the end, a government with a comfortable parliamentary majority backed down. Most people, regardless of political sympathies, may see Modi’s roll-back as a worrying sign that he will give in to any stubborn sub-regional group if it gets heavy media coverage. This is the blood the tiger has tasted.

Three, is it any wonder then that SKM leader Rakesh Tikait says he will protest the privatization of public sector banks? There are crucial disinvestment and privatization proposals on the table, beginning with the Life Insurance Corporation of India. Why wouldn’t vested interests now be emboldened enough to begin “Delhi chalo" and “Occupy Mumbai" movements and try to bring lives and economic activity in our major cities to a halt? National Conference leader Farooq Abdullah has already said that Kashmir needs a farmer-type agitation to restore Article 370. This is what we should fear. And sincerely hope that Modi’s backtracking—whatever the reasons for it—doesn’t open a Pandora’s Box.

Sandipan Deb is a former editor of ‘Financial Express’, and founder-editor of ‘Open’ and ‘Swarajya’ magazines

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