5 reasons why farm laws must be repealed: Economists write to govt

They said while changes are needed in agricultural marketing system, the laws don’t serve that purpose

Farmers gather in large numbers to protest at Singhu border near Delhi | File Photo: PTI

With farmers’ protest remaining the boiling issue in the country for weeks now, as many as 10 economists from different universities have written to Union Agriculture Minister Narendra Singh Tomar, citing five reasons why the reforms are harmful for small farmers.

Demanding that the contentious laws be repealed, the economists said that while they believe changes are needed in the agricultural marketing system, the reforms brought by the Centre don’t serve that purpose; that they’re based on “wrong assumptions”, The Indian Express quoted the letter as saying.

The economists cited the following five reasons stating why the laws must be repealed:

  1. The central laws undermine the role of state governments, which are far more accessible and accountable to the farmers. Regulation at state level is more appropriate than a blanket legislative change by the Centre, according to the economists.
  2. The economists believe the new laws will result in two markets under two sets of rules. While APMC market yards are regulated, the laws will create a new unregulated market that will follow a different regime of market rules. Issues like market manipulation will remain in the unregulated market space too but there’ll be no mechanism to address those.
  3. The laws will lead to fragmented markets and local monopolies. As per the Bihar (which removed APMC Act in 2006) experience, these laws will result in farmers ending up with lesser choice of buyers and lesser bargaining power, thus earring lower prices.
  4. Farmers’ interests will not be protected since there will be unequal players in contract farming (small farmers and companies).
  5. The laws will trigger concerns about domination by big agribusinesses, where markets and value chains will be consolidated in the hands of a few big companies, making it difficult for the small farmers, traders and local agribusinesses.

The economists opined in their letter that farmers rather need a system that gives them better bargaining power and involves them in the value chain, resulting in enhancing their incomes.