Food for thought – The Hindu BusinessLine

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The Centre could have approached the crucial issue of agricultural reform in a better manner

The political drama arising out of the passage of three ordinances on agriculture — Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, Essential Commodities (Amendment) Ordinance and Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services — was entirely avoidable. The BJP’s longstanding ally, Shiromani Akali Dal, has quit the Union government (but not withdrawn support); this has, in turn, turned the spotlight on the Haryana government, supported by the Jannayak Janata Party. The brouhaha over the Bills reflects poorly on the Centre’s political outreach and its inability to communicate to the farming community in two advanced agrarian States that the reforms envisaged in the two Bills will benefit them. The apprehensions are largely restricted to the first law that allows ‘trade zones’ to come up outside the APMC area. It allows farmers an option to sell their produce directly to these new zones, without going through the middlemen and paying levies such as mandi fees. While the hold of the middlemen will be reduced, farmers are apprehensive that the move suggests an eventual exit from the minimum support price. Agriculture Minister Narendra Tomar has, however, said that the MSP is here to stay, even as the law does not explicitly say so. The Centre needs to reach out to the political leadership across parties and in key procurement States and ensure that an important reform does not become a dead letter.

The other two laws pertain to the removal of stockholding limits as well as curbs on inter-State and intra-State trade, and creating a framework for contract farming, respectively. The creation of FPOs on a large scale will help in creating a farmer-friendly environment for contract farming where small players can benefit. The two laws will enable private players to invest in warehousing, grading and other marketing infrastructure.

The Centre may have erred in choosing the ordinance route, instead of working on consensus creation. Such reforms have been on the anvil for years, and would have met with acceptance. Another aspect highlighted by several MPs pertains to whether Parliament should be enacting a law on the sale and purchase of farm goods. Whether the matter in question falls under the State List (agriculture per se) or the Concurrent List (trade and commerce) is open to legal interpretation. Clearly, the issue is not going to die down soon. The Centre should reach out to those opposing the Bills, including farmers, explain to them the need for reform, and get them on board.

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