On a day farmers’ organisations held one more round of talks with the government on their demand for repeal of the three farm reform laws, BJP ruling party spokesperson Gopal Krishna Agarwal hailed the laws as part of the reform process that includes the newly-passed Labour Codes. In an interview to BusinessLine, Agarwal cited the instance of rolling back amendments in the laws related to land acquisition as having been detrimental to growth of manufacturing in India, clarifying the government’s reluctance to roll back the laws. Excerpts:
Why is the BJP so adamant in pushing these laws?
Economic reforms entail expending enormous political capital. The reasons are obvious — the benefits of reforms become apparent only after a time lag and are spread over a large population whereas the seemingly adverse impact of such reforms on specific sections and stakeholders are immediately felt. That is the reason why we have not seen any major economic reforms since 1991. Even at that time, reforms were restricted to FDI, financial markets, bilateral and multi-lateral trade. Since then, successive governments have felt the need for reforms in agriculture and labour. But no government has had the courage to implement them.
The BJP believes that the agriculture and labour reforms are the need of the hour. Since we are talking specifically on agriculture sector, the farm laws constitute a set of reforms that have been recommended by the Empowered Committee of State Agriculture Ministers, the Commission headed by MS Swaminathan and a series of discussion papers, deliberations and reports like the 62nd Report of the Parliamentary Standing Committee on Agriculture. It is not as if the Government had a sudden epiphany; these reforms have been in the pipeline for years.
The fact is that the few places where farmers are getting the right price for their produce are Punjab and Haryana where the Government is the procurer, the role of the government has been crucial in Aagricultural growth so far.
There should be no ambiguity about the fact that the BJP is a right-to-centre party. We believe in the market as an efficient mechanism for price recovery and resource distribution. Private industry, investment and business have a critical role in economic growth just as farmers have their own role. Economic policy and growth map have to balance between role of the government in economic activity and the role of private players.
Over the last two decades, every agriculture economist and organisation has discussed private investment into agriculture. But that has not happened owing to hindrances which we have eliminated through these legislations. One important issue was limits on essential commodities placed as far back as 1955 when there was shortages of food commodities. Such policies are outdated in the contemporary context when the country has surplus food grain. Second issue related to contract farming, agro-processing and value addition. We require a robust structure which can be achieved through FPOs and private players/processors investing into food processing industry. For that, they need an agreement on farm produce. That is the purpose of the third reform to attract private investment and enable FPOs to improve in the value addition and get better price for their produce. The third part was that currently India has just about 7,000 local mandis, a majority of which are concentrated in Punjab and Haryana with a well-entrenched mechanism of adhatias. This ecosystem does not exist in other States. Studies show that this number has to go up to 35,000-40,000 which will requires investment for mandi-structure, storage/warehouses/cold storage and supply chain management.
It may not be a popular thing to say right now but the fact is that the farmers’ income will not increase without value addition and food processing. This will need mega investment that has simply not come from the government in the last 70 years. We need private investment, reforms, better prices. Isn’t that what the farmers also want?
But the very farmers you want to help are protesting on the roads.
Some stakeholders can have genuine issues which the government has reasonably addressed. We have suggested amendments with regard to level-playing field between APMCs and private mandis with fee structure, regulation and registration. Judicial remedy has been provided with regard to contract with private players. The government is guaranteeing MSPs as also continuing power subsidy and removing penal provisions for stubble-burning. These reforms will go a long way in boosting agriculture and supplement our efforts to encourage manufacturing. Resistance to reforms has been detrimental to India. I’ll give you the instance of the amendments we had proposed in the land acquisition laws. But the whole thing was politicised. The reality is that if India is to be a global manufacturing hub, land is a major factor. The major hindrance for industry comes from cost and availability of land which is why that engine of the economy is blocked. Blocking the farm laws will have a similar detrimental effect in improving farm incomes. I would urge the farmers to have faith and come to an amicable understanding with the government.
