Context: Farm groups have ended the protests against the three agricultural laws. In this article we discuss how Setback for reforms in agriculture hinder the overall status of marginal and small farmers.
Key Points

• The decision to repeal Farm laws announced by Prime Minister & subsequent repeal of the farm laws in the winter session of the Parliament, is indeed a sad news from the point of view of the 86% small & marginal farmers in the country, who are at the receiving end in the present system of APMCs, or what are popularly called Mandis.
• Obviously, it was the political compulsion which possibly forced the Central Government to shelve the much-touted reforms in agriculture, which had the potential to transform the rural economy, besides giving boost to the incomes of small& marginal farmers, who had been neglected so far, by the successive governments.

Key Reason behind shrinking incomes of small& marginal farmers

• The Green Revolution policies have benefitted only those who grow wheat, rice, and sugar and in limited regions. These policies offered heavily subsidised inputs and an assured market and price for their products.
• For the majority of the farmers growing other crops and dependent on the monopolistic licensed marketing system, it has been a case of diminishing returns. For instance, according to the data released by the statistics office, farm income growth for (2013-2019), the all-India average earning per household stood at Rs 8,000 to Rs 10,000.
• By repealing the laws, the government has missed a big opportunity to introduce meaningful reform in Indian agriculture to increase farm incomes.

Why repealing farm laws is a setback for reforms?

• Price support schemes were introduced as a solution to increase farm incomes. However, this proved of limited value and have imposed heavy burdens on government finances.
• Now, several states have started recognising that farmers urgently need marketing freedom to obtain better prices for their products and amended their marketing laws.
• Had the farm laws been passed, it would have enabled this process on an all-India scale. However, such reforms will now have to wait.

Road Ahead

• First, the government should engage with farmers from across the country to find feasible ways to increase farm incomes.
• Second, increasing the ambit of MSP could permanently damage the prospects of reform in the agriculture sector and must be avoided.