Tuesday, January 25, 2022

“Farm laws: The transition of locally managed agricultural economy to a modernized national industry,” Salvatore Babones, Foreign Policy Columnist

“As the world’s largest indigenous non-western democracy, India is rapidly recognizing its huge economic potential,” said Salvatore Babones, Associate Professor of the University of Sydney and the Columnist of Foreign Policy Magazine, while commenting on the economic reforms being taken by the nation.

India is a country that openly accepts High Technology and Liberal Reforms, while also respecting intellectual property. It is this openness of the nation that allows companies to move beyond the “buyer-seller mentality” and into forging better economic relations.

Deliberating upon this liberal approach to the Indian Economic system, Professor Salvatore discusses the ‘Economics of India’s recent farm laws”. He emphasised the overall goal of the reforms, which is to transform Indian agriculture from a locally managed rural economy into a modern national industry.

The Farm Laws Focus upon More Cash Cropping With Greater Responsiveness to Market Demands

Prof Salvatore talks about how three farm laws, namely, The Essential Commodities (Amendment) Act, The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services; and The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, primarily intend to:

Expand Markets, Allow electronic trading (E-commerce), prohibit levying of any unnecessary fees by the State government, and create a framework for contract farming – a form of financing competitive farming.
The laws create new risks, as farmers are transformed into entrepreneurs who can bring much-needed investment in agriculture.

He further iterates that the Farm laws in their entirety are aimed at enabling small farmers to specialize in niche crops, paving way for specialized agriculture and the creation of a national market of agricultural produce.
Farmers only have one or two choices of who to work with, which leads to a lack of competitive market approach. By bringing national markets on the tip of farmer’s fingers, these laws become a successful pro-farmer reform.
The Farm laws on one hand break local monopolies and on the other restrict any form of abuse faced by the small farmers in those local purchasing setups.

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act liberalises whom a farmer can sell their farm produce, which breaks up local monopolies and creating a potential national market for the purchase of farm produce.

The International Discourse on Indian Farm Laws is Hugely Mislead

The problem with narratives being presented by the international community on farm laws is limited to surface scrabbling and not research-based studies, says Prof Salvatore.

The poor farmers, who lack access to financing and future market managing tools, are misinformed by the rich farmers who are already privy to newer agricultural development. New laws are designed to address these problems.

The common knee jerk reaction to every protest is that “it must always be right,” Prof Salvatore believes that “these Indian farmers should be leading the reforms as they are one of the most mechanised and knowledgeable of the lots, who understand global and domestic markets trends when it comes to agriculture and pricing of agricultural produce.”

When asked about the different approach that can be taken in regards to Farm protest, Babones said, ”Before people start criticizing government policy they should make sure to educate themselves first. A lot of critics have their reactions stemming from prejudices, their own presuppositions and no hard technical questions to form a balanced opinion.”

India being a true democracy in a developing world stands at a juncture where it faces backlash for not being a non-western democracy. The Farm Laws which hold the strength of liberalising the Indian Agricultural sector by bringing investment and national market to small farmers are indeed accepted, though in disproportionate numbers.

“The farmers need to lead India into the 21st century market-driven growth with a careful assessment and understanding of the farm laws, while the Government also needs to leverage the knowledge of farmers and upskill them in order to drive forward the further improvements in the agriculture sector”, Prof Salvatore added.

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