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Wednesday, January 26, 2022

Tackling agricultural reforms after farm laws repeal

🔴 Payal Chawla writes: Perfunctory reforms could have long-term deleterious effects for not only the agricultural sector, but the economy as a whole

Written by Payal Chawla |
Updated: December 18, 2021 9:32:48 am
The arrival of tur in Maharashtra’s wholesale market is yet to start although at Latur’s wholesale market some arrivals have been reported. (File)

In the run-up to the repeal of the three farm laws, the potential cost of MSP to the taxpayers became a matter of debate. Experts and agricultural economists quoted numbers that ranged from “trillions of rupees” in the coming decade, to “Rs 17 lakh crore” and “Rs 3.8 lakh crore”, to “Rs 36 thousand crore”. The enormity of the variance in estimates is astounding. There is also a dissonance between the NSSO data and the administrative data on the number of farmers who enjoy MSP. Further, there is no consensus on the formulae for the calculation of MSP. As a tax-paying citizen, it is troubling that the farm laws were passed without a consensus on these numbers. This only fortifies that the laws ought to have been sent to a select committee and debated in the House. That there is now a debate is a good sign.

In the writing on farm laws, there is consensus at least, on certain aspects. That agricultural reform is needed is beyond debate. That MSP has formed the mainstay of every committee and commission on agriculture reform, including the Swaminathan Commission. That India is an agri-surplus country. That domestic prices of agri-commodities are often higher than in the international market and therefore, there is a need to bring them down.

Cost reduction can happen either by creating efficiencies by plugging leakages or, by cost-cutting — including reducing farmers’ margins. The former is a long-term measure, and the latter, a short-term, drastic one. While I may be speculating, it is perhaps possible that the refusal to grant a legislative guarantee for MSP under the now-repealed farm laws may have been an indication of the latter. In the recently-reached understanding with the farmers, the government has agreed to constitute a committee on MSP. Hopefully, a formula can be arrived at by which costs of domestic agricultural produce can be reduced while ensuring a “remunerative price” for the farmers.

There is also a need to protect landholdings. Farmers’ fears in this regard are not exaggerated. Under the erstwhile laws, orders of payment made by an SDM/Collector could be recovered as “arrears of land revenue”. While agricultural lands were protected from such recovery, non-agricultural (immovable and movable) assets appeared to be fair game. Further, circumstances such as sustenance and payment of debts could force a farmer to sell their agricultural landholdings.

The government should also reconsider the dispute resolution mechanism provided in the erstwhile laws. In an MSP driven regime, the government is likely to be a party in any potential dispute. There will be a direct conflict of interest since the SDM/Collector is an arm of the government. Land records are within the jurisdiction of the patwari and tehsildar, who report to the SDM/Collector.

It would be advisable to think in terms of fast-track courts, and remove the provision of recovery through arrears of land revenue. It would also be advisable to have only one dispute resolution mechanism for all farm laws. In the event of a dispute covering more than one legislation, the issue of jurisdiction may first require resolution. There is also a need to think about making jurisdictions farmer-friendly, particularly in cases involving inter-state trade.

Given that the non-agricultural sector is hurting, there is an impulse to hasten reform in the name of “free markets”. While there is a Private Member’s Bill for the removal of “Socialist” from our Preamble, we still have a fair distance to traverse before we shed our welfare schemes. Before we ask our farmers to brave corporatisation without levelling the playing field, and callously requiring them to change their line of work if they don’t measure up, it might be worthwhile to consider: Are there enough jobs in the non-agricultural sector?

Perfunctory reforms and those that don’t work for all constituents — corporates as well as farmers — could have long-term deleterious effects for not only the agricultural sector, but the economy as a whole. Large-scale loss of landholdings could lead to their consolidation in the hands of a few. This could have the impact of turning the clock back, reminiscent of the Zamindari system. Worse, over-corporatisation without the creation of the requisite efficiencies could lead us to become heavily import-dependent, killing the benefits of the Green Revolution.

This column first appeared in the print edition on December 18, 2021 under the title ‘Repeal and reform’. The writer is a practising advocate and the founder of JUSCONTRACTUS. She recognises the assistance of Raghav, a law student at the Faculty of Law, University of Delhi

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