Farm laws have potential to bring agri reforms to India: IMF

The International Monetary Fund has hailed the Narendra Modi government’s farm laws by claiming that they have the potential to represent a significant step forward for agricultural reforms.

But it also warned that a social safety net is needed to protect those who might be adversely impacted during the transition to the new system, PTI quoted a spokesperson of the global lender as saying.

Gerry Rice, director of communications at the International Monetary Fund (IMF), said the new measures will reduce the role of the middlemen and enhance efficiency.

“We believe the farm bills do have the potential to represent a significant step forward for agricultural reforms in India,” Rice said at a news conference in Washington on Thursday (January 14).

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“The measures will enable farmers to directly contract with sellers, allow farmers to retain a greater share of the surplus by reducing the role of middlemen, enhance efficiency and support rural growth,” he said.

When questioned about the ongoing farmers’ protests against the bills, he said, “However, it is crucial that the social safety net adequately protects those who might be adversely impacted during the transition to this new system.”

This can be done by ensuring that the job market accommodates those that are impacted by the reforms, he said.

Rice said that the growth benefits of the reforms will depend, critically, on the effectiveness and the timing of their implementation, thus there is a need to pay attention to those issues as well.

Thousands of farmers have been protesting at the borders of Delhi since November, demanding a rollback of the new farm laws. Farmers fear the new laws will do away with the government-fixed Minimum Support Price, and the option of the free market under the new legislation will give big corporates an upper hand over them in deciding the price of their produce.

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As many as eight rounds of talks with the central government with farmers’ leaders have proved inconclusive with both sides refusing to stand down. The ninth round of talks will be held on Friday.

(With inputs from agencies)