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Explained Ideas: How the Modi govt can concede to farmers without losing the argument

The BJP governs many states where it can demonstrate the power of liberating markets, writes Bharat Ramaswami.

By: Explained Desk | New Delhi | Updated: December 10, 2020 8:54:40 am
Farmers protest, Govt farmer talks, Talks with Centre, Govt proposal to farmers, Farmers protest in Delhi, Indian ExpressA man watches the farmers' protest, at Singhu border in Haryana on December 9, 2020. (Express Photo: Praveen Khanna)

The resolute, determined, dignified, and peaceful protests by farmers at the borders of Delhi have captured headlines around the world.

“The uncomfortable truth, however, is that while the new laws are not perfect, they represent a necessary direction for agricultural policy,” writes Bharat Ramaswami, professor of economics at Ashoka University.

“Without developing new markets for the more dynamic lines of activity, agriculture, farmers and the economy will be stuck with a slow-moving cereal economy. This requires enabling policies and investments,” he states in his opinion piece in The Indian Express.

To be sure, government policy has moved that way since the early 2000s aided by a remarkable consensus shared across political parties, state governments and the Centre. Different central governments drafted model Acts in 2003, 2007 and 2017, each of which successively enlarged the scope of private markets and reduced the monopoly of the regulated mandi. In 2013, similar recommendations were made by a committee of 10 state agriculture ministers constituted by the ministry of agriculture. These included state ministers from Haryana and Punjab.

(Express Illustration: C R Sasikumar)

But with the farmers rejecting offers from the government to amend the contentious laws, the situation has reached a perilous impasse.

How can the BJP government concede without losing the argument?

Ramaswami states that the first element is for the central government to withdraw these laws — especially the one that allows private markets.

In return, farmers should drop their demand for minimum support price (MSP) to be a legal guarantee. After all, with the Acts gone, we are back to square one.

Is this then the end of all reforms?

“No, it does not have to be,” states Ramaswami. “A constituency for reforms has to be built elsewhere — with growers who will benefit from the opening up of new markets. These will primarily be producers of crops other than wheat and paddy. They gain when they access large markets — both domestic and foreign. This needs investment in markets and supply chains, whether from producer collectives or corporates”.

It is the entry of the latter that is controversial. However, concentration can be thwarted as long as policy is sensitive to it. The world over, it is the concentration in retail that allows corporates to extend backwards.

“The BJP governs many states where it can demonstrate the power of liberating markets and literally allow a thousand flowers to bloom. That gives it the chance to disprove the narrative that these reforms are a corporate plot and provide concrete proof of the gains. Without doubt, economic success will melt opposition in Punjab as well,” he writes.📣 Follow Express Explained on Telegram

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