New Farm Laws In India Has Potential To Raise Income of Farmers, says IMF

India’s recently-enacted agri laws have the potential to increase farmers’ income, but there is a need to provide a social safety net to the vulnerable cultivators, IMF's Chief Economist Gita Gopinath has said. Indian agriculture is in need of reforms, she said.

There are multiple areas where the reforms are needed, including infrastructure, the Chief Economist of the Washington-based global financial institution said on Tuesday.

The three farm laws were introduced in September last year, have been projected by the Indian government as major reforms in the agriculture sector that will remove middlemen and allow farmers to sell their produce anywhere in the country.

Replying to a question on the new laws, Gopinath said, "These particular farm laws were in the area of marketing. It was widening the market for farmers. Being able to sell to multiple outlets besides the Mandis without having to pay tax. And this had the potential to raise, in our view, farmers' incomes".

“That said, every time a reform is put in place, there are transition costs. One has to make sure and pay close attention that it's not harming vulnerable farmers, to make sure that the social safety net is provided. Clearly there is a discussion right now and we'll see what comes out if it,” she said.

Thousands of farmers in India, mostly from Punjab, Haryana and western Uttar Pradesh, are protesting at several Delhi border points since November 26 last year, demanding a repeal of the farm laws and a legal guarantee on Minimum Support Price (MSP) for their crops.

So far, 11 rounds of talks have taken place between the government and farmer leaders but talks failed to end the deadlock between farmers and government on three farm laws.

In the last round of talks, the government offered to suspend the laws for 1-1.5 years and form a joint committee to find solutions, in return for protesting farmers going back to their respective homes from Delhi borders. But farmers are not ready to accept anything except repeal of the three farm laws.

The farmer leaders also refused to present before the committee formed by Supreme Court Of India to resolve this issue. According to the farmers’ the members of the committee are pro-government and earlier they were in support of the these three farm laws.

Whereas, the tractor rally which was supposed to be taken out in Delhi in a peaceful manner on the occasion of 72nd Republic Day turned violent as the protesting farmers deviated from the planned routes and clashed with the police personnel in a bid to move towards central Delhi.

The Kisan Morcha has disassociated itself from those who indulged in violence during the tractor parade and alleged that some "antisocial elements" infiltrated their otherwise peaceful movement.

(With PTI inputs)