December 7, 2020

Quick takes, analyses and macro-level views on all contemporary economic, financial and political events.

India has in the Food Corporation’s stocks more than 3.5 times the grain needed to ensure food security. India’s food subsidy configuration conflates producer subsidy and consumption subsidy, hampering its negotiations at the World Trade Organisation.

The Centre and the states spend far too much on subsidy and not enough on investment to augment farm infrastructure. Things need to change, and farmers unions cannot refuse to accept this. The changes brought to the structure of farmer-market interface by the three farm laws opposed by the farmers make eminent sense.

The government must stand by the laws and communicate to the people the scale of waste underwriting the status quo on the farm front. That does not change the fact that the standoff over the farm laws is unfortunate because it is entirely avoidable.

After all, there is no fundamental conflict of goals between farmers — that category does not include the intermediaries who don the farmer’s turban and ride his tractor — and the government: both want farmers’ incomes to go up and for the farm-market interface to become more efficient.

There is a difference in perception over how this can be done, and that needs to be ironed out and action taken to address problems commonly recognised as such by all stakeholders. This calls for negotiations, not organised blackmail by laying siege to the national capital.

Negotiations between two parties cease to be negotiations when one party holds a gun to the other party’s head. There is little anti-people in not submitting to coercive action by a fairly prosperous section of India’s population. However, in a democracy, binaries do not work. Political skill lies in finding the middle path.

The government has announced large outlays to improve the farm-market interface. Farmgate infrastructure receives an outlay of `1 lakh crore. This and the incentives for farmer producer organisations have not been accorded a prominent role in the farm laws debate. Highlight this part to allay concerns of ordinary farmers about the farm laws’ intent.


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