Analysis on Impact of Agriculture Reform Bills on Farmers

Two Agriculture reform bills passed in Rajya Sabha too amidst the ruckus and opposition by farmers. Here’s an analysis of the impact of agriculture reform bills on farmers. 

Estimation of the Quantity of Crops Arriving in the Markets Necessary to see the Impact of  Agriculture Reform Bills 

The government will need to monitor the drop in the quantity of crops in Mandis assesses the impact of bills. However, it will be hard to determine the welfare impact on farmers if there is no estimation of trade taking place outside the markets. Secondly, farmers may hold the government accountable for a dip in prices as Kharif crop output would reach an all-time high this year due to favourable weather conditions. Also, it will be interesting to note how government procurement will change.

The central bank will also need to closely monitor the retail food inflation as the reforms would increase the possibility of hoarding by private players. Moreover, private investors may not immediately invest in value chains and end up using the services of intermediaries, which will not benefit farmers in any way.  

Farmers and Agricultural Markets to Remain Intact-PM 

While farmers conducted fierce protests against the controversial agriculture bills, PM Modi assured farmers that MSP and traditional markets would remain intact. Allaying the fears of farmers, he said that reforms were the need of the hour as they will untie farmers’ hands and save them from exploitation. That said, government procurement will continue as before. 

The two bills- Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services; Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill will become laws once President Kovinds signs it off.

What these Bills Will do?

The first bill will facilitate barrier-free intra- and inter-state trade of farm produce. Earlier, farmers could only sell to mediators at specific wholesale markets, or Mandis regulated by APMCS. Besides, the bill proposes an electronic trading platform for all transactions. The legislation will create a system where farmers can sell directly to sellers. Similarly, they could engage with agri-business companies, retailers, exporters to fetch better prices. 

Farmers’ Fears 

Several farmers and experts claim that small farmers may find it challenging to sell away from markets owing to constraints on travel and storage. Also, regarding MSP, farmers assert that the government will not be able to monitor every transaction individually. This will create a problem as prices will be settled outside the markets. Besides, private players could also force them to sell at lower prices.

In all, protests are mainly taking place in the north-western region until now. However, it will spread across the country if state procurement remains limited. 

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