RESCUING AGRICULTURE: FARM REFORMS CAN’T BE ROLLED BACK. BUT CENTRE NEEDS TO MITIGATE ANXIETIES

November 30, 2020, TOI

Farmers, mainly from northwest India, continued to blockade Delhi for the fifth day in a row. There is a significant trust deficit between the Centre and farmers’ representatives. It is time for wiser counsel to prevail before something snaps. The government shouldn’t back down from the farm legislations it passed in the last Parliament session. The legislation was hardly radical and promises to boost agriculture. Most states have headed in that direction over the last few years through legislative changes. Therefore, there can be no going back.

The discontent has coalesced into one primary demand, some sort of guarantee over the minimum support price (MSP) mechanism. The government has promised that MSP will continue. But it can do more. The MSP demand is really a symptom of deep rooted challenges Indian farmers face.

The biggest challenge confronting Indian agriculture is an increase in risks, both from extreme climatic conditions as well as sharp price fluctuations. MSP is a catchword for stability in income. Of the 22 crops where MSP is mandated, it works in merely two, paddy and wheat. Typically, about 36% of the production is procured under MSP. But it is geographically concentrated. Less than 12% of paddy growers benefit from MSP, and its concentration in Punjab has led to severe collateral damage. However, the instability in farming has meant that poorer states through local procurement agencies have joined the MSP bandwagon, creating newer distortions. To illustrate, in Madhya Pradesh MSP beneficiaries in wheat increased by 66% to 15.9 lakh in a single year. The Centre needs to curtail this trend for reforms to play out.

The Centre should hold talks with farmers and come out with some concrete proposals to mitigate their anxieties. It is possible for the Centre to smoothen the transition away from the paddy and wheat dominance by using its existing tools. The ongoing direct income support through PM-Kisan can be tweaked to hasten the shift to less resource intensive cereals such as millets. The existing Price Deficiency Payment Service needs to be improved to lessen the price risk of the transition. At the same time law and order must prevail, and farm agitators should not be allowed to blockade entry routes to Delhi. This is especially imperative at a time when the whole region has been gripped by a devastating pandemic.

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