A momentous rollback

The rollback of the three farm laws that were recently passed by both Houses of Parliament was announced by Prime Minister Narendra Modi, who said that the decision was taken in national interest. There must be compelling reasons why such a reversal of policy took place, although the secrecy that is particularly associated with the functioning of this government

has prevented these from being made public. As happens in an information vacuum, various theories have emerged about why this rollback took place, that too by a Prime Minister known for pressing ahead with what he has in mind despite adverse circumstances. The most prevalent is that the move was motivated by the Assembly elections in Punjab and Uttar Pradesh that are due in a few months’ time. There has been a torrent of misinformation about the farm laws, the most widely circulated being that the intent of the laws was to favour two business groups. This is far-fetched, but appears to have gained considerable traction during the course of the year. Getting involved in fields such as food grain is always a risky proposition for a private company in a country such as India, where food availability is a highly charged subject. In a sense, the rollback has been a blessing for these business groups, as otherwise any rise in price, any problem in availability of the items traded in the future would have been laid at their door by an aroused public. Looking at it from a broader perspective, it is difficult to see why such a withdrawal of the three farm laws would be a plus for the country, except in the short run, for reasons that remain unspecified. Farmers in one northern state in particular are depleting the groundwater there in an alarming fashion. This is because the Minimum Support Price (MSP) system provided ample financial incentive to grow rice, a crop that requires large quantities of water. It has been decades since the median diet in India was almost wholly composed of wheat or rice. With the higher prosperity that accompanied the 1990 reforms undertaken by Narasimha Rao and continued under Narendra Modi, diets now include not just more protein, but fruits and vegetables as well. Coarse grains have a huge potential market among the health conscious across the world, and the passage of the laws would have allowed their trading and export to the benefit of the farmers growing them. Who can forget the favourite meal of then PM, H.D. Deve Gowda, the nutritious ragi ball that he loved? Small wonder that he is still going strong, despite the advance of age. Should MSP be extended to several other crops as well, that would not only add to the Rs 600,000 crore being spent on such a policy but would lock farmers into producing crops that may no longer have a market. A substantial proportion of the grain that has been bought by the Central authorities as a consequence of the MSP, rots in the open air or in godowns, as there is no consumer offtake for such quantities. Such waste would multiply were the demand for an expansion of the MSP system and its locking into a high price mode be agreed upon.
The momentous rollback of the three farm laws by the government has not resulted in an end to the agitation that has been going on for about a year, mainly in the National Capital Region, where high-voltage publicity is assured. This should come as no surprise, as several of the prominent champions of the agitation have no interest in farmers, but are solely concentrating on weakening and finally bringing down the government led by Prime Minister Narendra Modi by 2024, if not earlier. In the environment created by the policy reversal, a defeat of the BJP at the hands of the opposition in UP would be the trigger for a rolling series of protests that may be expected to get concentrated in and around the NCR. Indications of such a rash of protests has been given in the rising demand for the withdrawal of the withdrawal of Article 370 in Kashmir, the rollback of the CAA and much more. It is unlikely that any such concession will be given by the government, but in the unlikely event that this takes place, more demands will erupt that follow the trend line of cancelling the verdicts of the 2014 and 2019 Lok Sabha elections, which saw the ascent of Narendra Modi to the Prime Ministership. Spokespersons of the BJP have termed the rollback a masterstroke. Should the party succeed in winning the UP Assembly elections in 2022, that would be the trigger for the claim that this triumph by the ruling party was because of the rollback of farm laws, just as the earlier victory in UP was ascribed by some to the 2016 demonetisation. Steps as fraught with consequences as rollback of laws essential to modern agriculture, or shock therapy to bring down the share of the informal economy in India are not taken on grounds relating to Assembly elections, no matter how consequential these states are in the Lok Sabha calculus. Their impact extends over the entire country and over a generation. There must be strong cause behind the move by the Prime Minister to go ahead with such a rollback without even at first securing the agreement from the other side that this would result in the agitation being withdrawn. What is clear is that the path to needed reforms have been made more problematic, and the possibility of more such agitations has grown as a consequence. The country needs growth, it needs stability, and not just the government but citizens must work to ensure this. MDN