Farm laws axed: Decoding the reasons behind & what is the way forward

When Prime Minister Narendra Modi declared, via televised address, to withdraw the three farm laws after witnessing year-long opposition, it left the progressive thinkers & reformers disappointed and upset.

A government at its zenith of power, enjoying strong majority and still giving in to protests by ‘certain section’ of farmers drops enough hints of government prioritising election over reforms. This was a victory for democracy but a setback for majority of farmers.

The agri-reforms would have set in motion series of steps that would further open floodgates of growth & prosperity for the nation’s farming community. But, one announcement by Prime Minister shattered all hopes of farmers being freed from the clutches of trader cartels. The farm laws went back in as much a hurry, as it came a year ago.

Unarguably, the government tried hard to convince the farmers by bringing ministers & farmer representatives on the negotiating table and held over 2 dozen rounds of parleys but all that went in vain.

Bigger question is about the future of India’s agrarian economy. Farm laws were a bold step but with its failure, will reforms ever see light of the day in agriculture sector?

With farm laws junked, will agriculture see reforms ever… Future ‘reformer’ must keep below issues in account

1) Unlike developed countries, India’s politics and economics are two sharply divided entities with not much link between them. A politician takes valiant steps for wider prosperity but develops cold feet when it’s election time and the proposed reforms don’t take off. This is what happened with farm laws. Despite 1 year of its passage, they had to be rolled back.

The underlying problem behind this is that the country remains perennially in an election mode. Every year, Assembly elections are scheduled with Lok Sabha elections falling in between. In the Constitution, it was envisaged to have 5-year electoral cycle but state govts kept falling randomly after the 1970s and this unsettled the cycle.

PM Modi has been advocating strongly for clubbing state elections together along with Parliamentary polls but consensus has evaded, for whatsoever reason. If the political class agrees for 5-year gap between 2 governments either at Centre or in states, the reforms could roll out without any electoral consideration. In case, a government falls in between the period, it may choose to remain under President’s rule or parties could cobble together numbers to form another government.

2) Another important step could have been encouraging adoption of farm reforms by BJP-ruled states and let other states follow suit, as & when they see results coming. BJP ruled states could have implemented it and when farmers of Punjab & Haryana would see farmers’ income rising, they would have themselves come around.

Similar scenario happened when VAT in 2005. Some states refused to implement it but the Centre didn’t force it and let it proceed at own pace. Result was all states came on board in just 1-1.5 years. Prime Minister should form similar National Development Council for pushing these reforms.

3) Reforms don’t happen on its own, they need to be sold by coaxing & cajoling those who are intended to benefit from the same. They need to be convinced that they won’t lose out from the new program, especially in a poor nation like India where scepticism overrules confidence in business dealings.

The farm laws were designed to benefit the farmers in the long run, particular the smaller & those with small landholdings. First law would enable farmer to sell his produce in or outside mandi, second law would give him freedom to stock his produce and the third one would allow him to enter into forward contracts. Third one appears tricky but others two could have easily been accepted. The government should have gone extra mile to educate and enlighten the farmers as this would only enhance their income, which was currently being usurped by the middlemen.

4) Indian agriculture occupies a vast percentage of population. There are too many people working in the farm sector and is therefore it is unable to provide livelihood to all those engaged in farming. Govt must explore low-tech manufacturing and other business to absorb this surplus labour. Availability of alternate employment will go a long way in convincing the farmers of the goodwill that these farm laws have.

Moreover, the ‘forced’ introduction of three farm laws had itself set the stage for future dissent by farmers. The reforms were brought in Parliament via ordinances and then converted into bills and passed by majority. The passage signalled that govt exercised brute majority to push through the legislation. Not sending it to a standing committee helped dissenters fan the discontent among farmers and helped formulated opinion that govt was imposing its will on them.

Other aspect that worked against the farm reforms was the clout of middlemen who joined ranks to oppose it tooth & nail. Being well-oiled, organised, well-funded and articulate, they were successful in galvanizing the masses in their favour. The aratiyas cartel of Punjab & Haryana were the ones who would bore the brunt of the reforms and hence, they not just mobilised the masses but allegedly funded the protests also, thus derailing the reforms.

Clearly, government was caught on the backfoot. From next time, any reformer would develop cold feet when thinking of reforms in agri sector. And, the final loser in this battle is and will be India’s farmers as reforms get defeated by politics of freebies & subsidies.