India Should Consider Repealing It’s Highly Controversial Farm Laws

Livemint     23rd February 2021     Save    
QEP Pocket Notes

Context: Wider choice for farmers does sound good, but a close look at the enactments would show why their fear of exploitation is real.

Arguments Against the Farm Laws

  • Suspicion over dismantling Minimum Support Price (MSP): 
    • Policymakers have dismantled it by already setting low prices and lack of accessible product collection centres.
    • No reforms in MSP will lead to millions of farmers will be forced to sell their products to four or five big agribusiness corporations.
    • On the other hand, farmers world over receive government subsidies like
      • China, European Union, United States and India spent an estimated $185.9 billion ($101.3 billion, ($48.9 billion and ($11 billion).
  • Prohibits redressal mechanism: for farmers if a corporation violates a contract.
  • Benefits big agribusiness corporations: new laws do not provide a level playing field to farmers.
  • Removes restrictions on stockpiling food grain by corporations that were put in place to discourage firms from artificially raising prices.
  • Providing more choice always is not desirable: it results in sorites paradox – e.g. 
    • China gives workers the option of working in export-processing zones in exchange for basic labour rights.
    • Each individual decision to give up basic rights in exchange for a job may enhance that person’s welfare. But when lots of people do it, all workers may be worse off.
    • Similarly, the US’s law on ‘freedom’ to opt for slavery is often described as “warranteeism”.

                  Way Forward

                  • India does not need market fundamentalism but a market that functions freely, within broad parameters of well-crafted laws.
                  • Need for antitrust enforcement to level the playing field for farmers and regulate monopsonies ( need of which is expressed by even supposed free-market bastion of US).

                  QEP Pocket Notes