DMPQ- “Farm reforms must be oriented towards minimising risk and increasing returns for farmers.” Elaborate.

At the height of the farm protests, the ideologically charged rhetoric that the new farm laws would result in a corporate takeover of Indian farms led to the toppling of Reliance cell towers in Punjab. Soon afterward, Reliance issued an official statement that the company had no interest in entering the farm sector.

The result has been a suffocating mix of arbitrary and conflicting policy interventions by both the central and state government agencies. This, combined with poor and varying levels of provision of basic public goods, including irrigation, has meant that some 50 years after the Green Revolution, we all find ourselves trapped in an all-India agricultural landscape characterised by relatively low productivity levels that co-exist with high levels of variation in crop yields across our farming districts. Ironically, we have bought “food security” at the cost of an agricultural sector that ensnares all of us — farmers, households, consumers, traders, firms, and the state — with lower levels of individual welfare and higher levels of overall risk.

Without fundamental reforms that allow for greater mobility of farmers and agricultural resources across the country, our farm households remain trapped, each subject to the failings of their own farming districts and states. Within a true decentralised polity, a farmer in Assam ought to benefit as much from the “Punjab model” as do farmers in Punjab, and vice-versa.

The three farm laws are only a part of the far wider set of economic reforms that will be needed to stabilise Indian agriculture. The guiding principle for these reforms must be to create conditions that allow farm households to maximise their income while minimising the overall level of risk in Indian agriculture. Farmers must be made free to determine the best mix of resources, land, inputs, technology, and organisational forms for their farms. The state has too long subjected our farm households to top-down production, marketing, and distribution schemes while trapping them in an agricultural landscape fraught with risk. Farmers, just as entrepreneurs in the non-farm sector, must be allowed to enter and exit agriculture, on their own terms and contract with whomever they wish.

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