In the run-up to the repeal of the three farm laws, the debate has centred around the potential cost of MSP on the taxpayer. The numbers have ranged from “trillions of rupees” in the coming decade, to “Rs. 17 Lakh crores” to “Rs. 3.8 Lakh Crores” to “Rs. 1.4 Lakh Crores” to “Rs. 36 Thousand Crores”. These are figures quoted by experts and agricultural economists. The enormity of the delta is astounding. There is also a dissonance between the NSSO data and administrative data on the number of farmers that enjoy MSP. Further, there is no consensus on the combination of formulae for the calculation of MSP.
As a tax-paying citizen, it is troubling that a law of this magnitude was passed without a consensus on these numbers. This only fortifies that the laws ought to have been sent to a Select Committee and debated on the floor of the House. Be that as it may, now that there is a public debate (albeit belated) augurs well.
In the plethora of written material on farm laws, there is consensus on certain aspects. Interestingly, the same aspects are equally confounding. India is an agri-surplus country, particularly in wheat, rice and sugar. Despite the surplus, the prices of these products are said to be higher than international prices. It is also the same products on which MSP is generally granted. And yet, if MSP has formed the mainstay of every committee and commission on agriculture reform, including the Swaminathan Commission, the same is indicative of a missing piece in the puzzle. And simply obliterating MSP may not be the answer.
It is equally true the sector is heavily weather dependent and grossly lacking in infrastructure. The 1991 reforms alluded the agri-sector and farmer entirely. There can, therefore, be no doubt that agri-reforms are peremptory and domestic prices must be in conformity with international prices.
Cost reduction can happen by either creating efficiencies by plugging leakages in the system (all of which are well documented in various government-commissioned reports), or, by cost-cutting – including reducing farmer margin. The former is a long-term measure, and the latter, a short-term, drastic one. While I may be speculating, it is perhaps possible that the refusal to grant a legislative guarantee of MSP, under the now-repealed farm laws, may have been an indication of the latter.
In the recently reached understanding with the farmers, the government has agreed to constitute a committee on MSP. It is hoped that a formula can be arrived at, by which costs of domestic agricultural produce can be reduced, while ensuring “remunerative price” for the farmers.
In addition, there is also a need to protect the land holdings of the farmers. Fears of the farmers in this regard are not exaggerated. Under the erstwhile laws, orders of payment made by an SDM/Collector could be recovered as arrears of land revenue. While agricultural lands were protected from such recovery as arrears of land revenue, non-agricultural (immovable and movable) assets appeared to be fair game. Further, circumstances such as sustenance and payment of debts could force a farmer to sell their agricultural land holdings as well.
The government should also reconsider the dispute resolution mechanism provided in the erstwhile laws. In an MSP driven regime, the government is likely to be a party in any potential dispute. There will be a direct conflict of interest since the SDM/Collector is an arm of the government. In this context also consider, that land records are within the jurisdiction of the patwari and tehsildar, who report to the SDM/Collector.
It would be advisable to think in terms of fast-track courts, and remove the provision of recovery through arrears of land revenue. It would also be advisable to have only one dispute resolution mechanism for all farm law legislations. In the event of a dispute covering more than one legislation, the issue of jurisdiction may first require resolution. There is also a need to think about making jurisdiction farmer-friendly, particularly in cases involving inter-state trade.
Given that the non-agricultural sector is hurting, there is an impulse to hasten reform in the name of ‘free markets’. While there is a private member bill for the removal of the word ‘Socialist’ from our Preamble, we still have a fair distance to traverse before we shed our welfare schemes.
Before we ask our farmers to brave corporatization, without levelling the field of their bargaining power, and callously require of them a change of their line of work if they don’t measure up, it might be worthwhile to consider – are there enough jobs in the non-agricultural sector to absorb all those that fall by the way-side?
Perfunctory reforms and those that don’t work for all constituents, i.e., corporates as well as farmers, could have long-term deleterious effects for not only the agricultural sector, but the economy as a whole. Large scale loss of land holdings could lead to consolidation in the hands of a few, where the farmer could essentially turn into a farming-contract-labourer. This could have the impact of turning the clock back reminiscent of the zamindari system. Worse still, over-corporatization without the creation of requisite and recommended efficiencies could lead us to become heavily import-dependant, killing the benefits of the green revolution.
The author is a practising Advocate and the founder of JUSCONTRACTUS. The author recognises the assistance of Raghav, a law student at the Faculty of Law, University of Delhi.
The original version of this Article appeared in the Indian Express.
