On Recent Farmers’ Protest Demands – Farm reforms remain a challenge yet to be met

Source: This post on Recent Farmer’s Protest Demands has been created based on the article “Farm reforms remain a challenge yet to be met” published in “Live Mint” on 14^th February 2024.

UPSC Syllabus Topic: GS Paper 3 Agriculture – Issues related to direct and indirect farm subsidies and minimum support prices.

News: The article discusses the demands of the recent farmers’ protest. It also highlights the issues with the government buying farm produce and the steps that should be taken in this regard.

Background:

Farmer groups from Punjab have recently clashed with police and threatened to storm Delhi just before the national polls. On Recent Farmers Protest Demands

What are the demands of the farmers?

1) India’s withdrawal from the World Trade Organization and freezing all free-trade pacts.

2) Reinstating of the Land Acquisition Act of 2013.

3) Pension of ₹10,000 a month for every farmer aged above 60.

4) The limit on rural job-guarantee work-days to be doubled to 200 and its daily wage upped to ₹700.

5) Dropping of all cases against last time’s protestors.

6) Law to back minimum support price (MSP) for all commodities as a government assurance.

What are the issues with government buying farm produce?

The government is a bulk buyer of foodgrain and other farm produce to offer free or cheap food to the masses. However, this leads to:

1) Distortion of cropping patterns.

2) Incentivizing the overproduction of carbohydrate-heavy crops like wheat and rice.

3) It ignores the changing food habits of people. For instance, people may want protein-rich edibles and vegetables cheapened by better acreage and cold chains (for perishables).

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What should be the way forward?

1) Aligning Farm Incentives with Market Forces: For evolving dietary demands of the people to be satisfied more efficiently, farm incentives must be aligned better with market forces. For this, old restrictions must be eased, and markets should have multiple buyers.

2) Focusing on Reforms Instead of Legalising MSP: MSPs for mandatory state procurement should not be legalised, since markets cannot function properly with price floors and caps. Farms reforms are the way forward.

3) Governments should not Control Agri Exports: Another sign of the Centre’s comfort with state-controlled farming is the recent export bans imposed on non-basmati rice and onions. These moves deprive farmers of a chance to maximize earnings.

Question for practice:

What are the issues with government buying farm produce? Suggest steps that should be taken to tackle these issues.