Viewpoint: India's Farm Reforms

27 SEP,2020 | MEDC


 

The farm reforms recently proposed by the Prime Minister are a step in the right direction. His assurance on MSP reflects the government’s commitment to protect farmer interests. There are incentives for enterprising farmers to explore ecologically sustainable practices for crop diversification, and benefit from the added returns and growth in output. These measures will enable a larger share of private investment into the farm sector, thus leading to a rising competitiveness of the sector across the length and breadth of the country. The Indian farmer has the potential to achieve a lot, and hopefully, some of these measures will give wings to his dreams.In the coming decade the Indian farmer needs to embrace innovation and technology as never before. Advanced mechanization for production processes, predictive analysis for production planning, and biotechnology to improve yield while reducing input cost, are all concepts that he needs to adopt. For too long has the system been rigged in a manner that benefits middlemen, traders and procurement agencies rather than the intended beneficiaries – the farmer. The importance of the agricultural sector in spurring overall economic growth cannot be overestimated, and Covid has clearly shown us how the rural economy matters. Hopefully, Indian farmers will welcome modern concepts like negotiable warehouse receipts and agri-futures to hedge their market risks, as well as strive for export competitiveness and maximize their gains from the deregulation of the sector.The rural ecosystem is also becoming increasingly digitized and farmers will need to participate in it to the same extent as the rest of the local population. It will take some time for private investment and entrepreneurship to establish itself, and that critical period should enable the government to accurately determine whether those market entrants genuinely benefit rural stakeholders or not. A large socioeconomically disadvantaged section of India’s population continues to reside in rural areas and the multidimensional poverty it faces needs to be systematically addressed if we are to move towards a more inclusive and sustainable system. The farm reforms proposed by the government are well intended, and, if adequately implemented, they should go some distance in promoting grassroots’ level welfare.A key issue facing the Indian farmer is the small size of his holding, due to which economies of scale are often not commercially viable. The coming decade will hopefully see the country’s agricultural ecosystem migrate into a digital architecture that helps overcome issues of fragmentation. Artificial intelligence will also be a key technological factor responsible for transforming the sector’s productivity. Policymakers need to display increasing amounts of lateral thinking to ensure that India’s farming community moves smoothly ahead and integrates with the modern economy. At the end of the day, governance has to be outcome-based.

*Photo Credit: Google

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