inconsistent policies on agriculture-Avoid sending out mixed signals on farm reforms

Source: The post inconsistent policies on agriculture, has been created on the article “Avoid sending out mixed signals on farm reforms” published in “Live mints” on 19th December 2023.

UPSC Syllabus Topic: GS paper 3- Economy- changes in industrial policy and their effects on industrial growth.

News: The article discusses the Indian government’s inconsistent policies on agriculture, like changing rules for sugarcane ethanol and banning exports. It suggests the need for more market freedom in farming, less government control, and better planning and consultation for farm reforms.

What are the concerns related to government inconsistency in agriculture policy?

Create uncertainty: The government’s rapid changes, like the ban and subsequent lifting of the ban on sugarcane for ethanol production, create uncertainty in the agricultural sector.

Impact on Farmers and Industry: Sugar and distillery businesses faced potential losses due to the sudden ban, given their investments in cane-derived ethanol, aligned with India’s biofuel goals.

Market Disruption: These policy changes interfere with natural market forces of demand and supply, potentially leading to unforeseen economic consequences.

Political Influence on Decisions: With national elections approaching, policies seem driven more by political considerations, like controlling inflation, rather than sustainable agricultural practices.

Contradiction with Reform Goals: The government’s actions contradict its earlier attempts to liberalize the farm sector, as seen in the 2020 farm laws aimed at reducing state control.

What should be done?

Stakeholder Consultation: Engage with farmers and industry players before implementing policies, learning from the backlash against the 2020 farm laws.

Market Freedom Emphasis: Shift towards market-driven agriculture, allowing farms to respond to real demand and supply, as opposed to heavy state control.

Balanced Approach to Inflation: While controlling inflation is important, it shouldn’t lead to abrupt policy shifts that disrupt the market, as seen with export bans and import duty changes.

Parliamentary Discussion and Transparency: Encourage open discussions in Parliament on agricultural reforms for informed decision-making and consensus building.

Question for practice:

Discuss the potential impact of the Indian government’s inconsistent agricultural policies on the country’s overall economic.