Legitimising centralised control over agriculture may mean farmers’ freedom remains just a promise
By Devi Prasad Juvvadi
The share of agriculture in the gross domestic product (GDP) of India has reached 19.9% for the first time in the last 17 years, making it the sole bright spot in GDP performance during 2020-21, according to the Economic Survey 2020-21. Agriculture is the largest private sector in the country and yet it is the most regulated, restricted and prohibited sector of the economy today.
Agriculture is a State subject, ie, it forms a part of the State list of our Constitution which essentially means that States are supposed to address all the issues related to agriculture. Over the years, agriculture, being a State subject, has been viewed as a roadblock for the implementation of reforms. Viewed from the socio-economic point, it is the most important sector that needs focus and attention at all levels.
Recognising the federal nature of the Indian Republic, the Central government often proposes model acts to encourage the State governments to adopt or adapt, and to nudge the country towards a common goal. But agriculture requires local knowledge and States are entirely competent to enact laws on agriculture. With our varied agro-climatic zones and cropping patterns, every region and State was then assumed to have geography-specific agricultural issues. Over the years, agriculture has emerged as more than a State subject.
However, logically speaking, unless it is officially transferred to the union list or more sensibly to the Concurrent list, agricultural problems should also have State developed solutions. But it has always been the Central government which took the lead in designing reforms for the sector without even consulting States that is resulting in imbalances in development across regions and States. By legitimising centralised control over agriculture, the prospect of farmers’ freedom may remain a promise that may not be realised in a true sense. Liberalisation requires decentralisation and devolution of power, therefore ‘market reforms’ by centralisation of power is inherently a contradiction.
Agriculture by its very nature is a localised activity and requires a decentralised approach. The new farm laws were withdrawn because they were enacted through a novel interpretation of the Constitution, seeking to institute centralised control over agriculture marketing and production. The repealing of farm laws clearly shows the failure of policymaking by the union government that may stall future reforms in the sector.
Failure of Policy
Repealing of recent laws shows the failure of policymaking by the union government and is a setback to the reform process. It is just like that India missed the first and second industrialisation in the 19th and 20th century indicating its policies and regulatory frameworks were not conducive. Industry and agriculture are two important pillars of the Indian economy and together contribute about 45% to the GDP. With a business-as-usual approach, we shall be missing the emerging global opportunities in the agriculture sector.
NITI Aayog Export Preparedness Index 2020 also stated that an export policy measure at the national level will not suffice and the state of preparation to strengthen exports must be understood at the regional level. This requires that each State needs to formulate its own policy measure, and understand its unique strength and valuable resources so that exports get a shot in the arm at the State level.
Foodgrain production in many States has been increasing considerably but farmers are encountered with profitable prices, reducing cost of production, storage, processing, value addition as critical challenges. For example, foodgrain production in Telangana is estimated to reach about 30 million tonnes in 2020-21 which is higher by 4.4 million tonnes than the production during 2019-20 and about three times higher than seven years ago. The continued emerging surplus production warrants government’s focused interventions for a close look at alternative opportunities for off-take of produce, such as promoting domestic consumption value addition through processing and enhancing exports, so as to maximise farm income and protect the livelihoods of farmers. However, there are restrictions, constraints to implementing policies related to these challenges.
Today, many States in India are ruled by various regional parties where agriculture is the primary activity of the majority of people. Though State governments are primarily responsible for the growth and development of the agriculture sector and developing perspective plans for their respective States, the actual development takes place with the implementation of the programmes/schemes funded by the Centre only. In metaphorical terms, the States are expected to follow the Centre for a subject that belongs to them.
Though agriculture has developed into a more national sector or even international due to a globalised economy, there remain issues and solutions that are more State and geography-specific. Hence, Telangana is implementing ingenious schemes in the farm sector such as Rythu Bandhu and Rythu Bima. Other initiatives of States include the KALIA scheme in Odisha and Bhavantar Bhugtan Yojana in Madhya Pradesh. The major stand-out features of State-run schemes are their penetration and acceptability. It is evident from this anecdotal and otherwise evidence, that major beneficiaries of agricultural reforms – farmers – perceive more value from State-run schemes. Many of these schemes also became the guiding lines for schemes announced by the Central government on the national level.
At this juncture, it is pertinent to note that the protests of the Telangana government at the Centre for paddy purchase and other issues should be a torch for regional parties in various States to take a unified stand under the leadership of Chief Minister K Chandrashekhar Rao for taking maximum benefit to the farm sector that would help national development agenda. This may emerge as regional parties ‘gathbandhan’ to be the best form of coalition to counter the Bharatiya Janata Party (BJP) in the forthcoming general elections.
(The author is Director, Centre for Good Governance, Hyderabad. Views are personal)