In the lead-up to the repeal of the three farm laws, there was a heated debate on the potential cost of Minimum Support Price (MSP) to taxpayers. Various experts and agricultural economists provided estimates ranging from “trillions of rupees” over the next decade to figures like “Rs 17 lakh crore,” “Rs 3.8 lakh crore,” and “Rs 36 thousand crore.” The significant disparity in these estimates is striking. Furthermore, there is a discrepancy between National Sample Survey Office (NSSO) data and administrative data regarding the number of farmers benefiting from MSP. Additionally, there is no consensus on the formulas used to calculate MSP. As a concerned taxpayer, the passage of farm laws without consensus on these crucial figures raises concerns. It underscores the importance of sending such laws to a select committee for thorough debate in the House. The current debate is a positive development.
Despite the controversies, there is general consensus on certain aspects related to the farm laws. The need for agricultural reform is widely acknowledged. The centrality of MSP in every committee and commission on agricultural reform, including the Swaminathan Commission, is recognized. India’s status as an agri-surplus nation and the need to align domestic prices of agricultural commodities with international markets are also agreed upon.
The reduction of costs can occur through either creating efficiencies by addressing leakages or implementing cost-cutting measures, which may include reducing farmers’ margins. While the former is a long-term strategy, the latter is a short-term, potentially drastic measure. The lack of a legislative guarantee for MSP in the now-repealed farm laws might have hinted at a preference for the latter. In the recent agreement with farmers, the government has committed to forming a committee on MSP, aiming to devise a formula that reduces the costs of domestic agricultural produce while ensuring a fair price for farmers.
Another critical concern is the protection of landholdings. Farmers’ apprehensions in this regard are not unfounded. Under the previous laws, orders of payment by an SDM/Collector could be recovered as “arrears of land revenue.” Although agricultural lands were shielded, non-agricultural assets seemed vulnerable. The government should reconsider the dispute resolution mechanism and contemplate farmer-friendly jurisdiction, especially for cases involving inter-state trade.
Given the economic challenges in the non-agricultural sector, there is a push to expedite reforms in the name of “free markets.” However, before urging farmers to adapt to corporatization without ensuring a level playing field, it is essential to assess the availability of non-agricultural jobs. Hastily implemented reforms that do not benefit all stakeholders could have long-term adverse effects on the agricultural sector and the overall economy. Large-scale loss of landholdings might lead to their concentration in a few hands, echoing the historical Zamindari system. Excessive corporatization without creating necessary efficiencies could result in heavy import dependence, undermining the gains of the Green Revolution.