Viewpoint: Agriculture's structural crisis

13 DEC,2020 | MEDC


 

A section of farmers have been protesting for many days now in Delhi, demanding withdrawal of India’s recently passed farm bills. This should be seen as a reflection of the deep rooted structural crisis that the country’s agricultural sector is currently facing. Granted, the farm bills attempted to weaken the stranglehold of the middlemen and empower the marginalized farmers. However, even though many farmers agree that the APMC mandis are politicized and in urgent need of reforms, they also see them as institutions that are able to protect their basic interests under the current circumstances. The government’s recently passed farm bills are well intentioned, but there is a need to change the modus operandi of the entire system before most farmers genuinely believe that the new scheme of things will work to their advantage, rather than pose a hidden barrier to their sustainable growth prospects. Many Indian farmers continue to view the MSP system as a mechanism that ensures better prices for their state-procured crops, mainly rice and wheat. They believe that not only are they entitled to it, but that it should be further strengthened. Most think that their negotiation powers will decline in the new private markets. Theyneed to be convinced that excessive dependence on the government is not good for their own long-term growth prospects … and, sooner or later, a restructuring of stakeholders in the system is inevitable. Mindlessly expanding government safety nets will do farmers more harm than good as it will eventually eliminate their ability to leave their comfort zones and prove themselves to the world. For most farmers, agriculture is no longer a cost-effective economic activity. The three new farm bills have attempted to ease the situation in favour of the smaller players. The old system is not being replaced, rather newer options are being provided. The transparency on trade-related transactions in the sector imposed by GST has led to protests by vested interests. It is paradoxical how, despite having more tractors than any other country, the productivity of India’s arable land continues to remain one of the world’s lowest. The answer has more to do with political interference in the sector than with any other single factor. On the operational front, the key issue facing Indian agriculture is not that of production, but that of productivity. The agricultural sector continues to remain pivotal to the revival of India’s pandemic-hit economy, and Covid-19 may even prove to be a blessing in disguise if it induces policymakers to initiatesome strategic restructuring therein.Both climate change and Covid (which are interrelated) have impacted agriculture and agro-businesses, and the government cannot afford to remain a passive bystander in the evolving situation. Rather than dole-outs, Indian agriculture needs deep-rooted structural reforms to provide millions of farmers socioeconomic justice, as well as enable them to realize their potential.

*Photo Credit: Google

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