Currently, three Union ministers are meeting with leaders of 40 agricultural organizations for the fourth round of make or sea talks in Vigyan Bhawan, in the capital, as thousands of farmers protest against a set of agricultural laws for the seventh day in a row.
The Minister of Agriculture, Narendra Tomar, the Minister of Railways, Food and Consumer Affairs, Piyush Goyal, and the Minister of State for Commerce, Som Prakash, are leading the government, while representatives of some of the more farmers’ unions The country’s greats, mainly from Punjab, speak on behalf of the farmers. .
While farmers want the three farm laws passed by Parliament in September repealed, the government has relied on its new reform agenda to improve crop prices and increase investment in the agricultural sector.
Opposition to the reforms has sparked some of the biggest farmer protests in decades, posing a political challenge to the Narendra Modi government.
“It is possible that the government offers some kind of commitment or guarantee that the reforms will not affect the minimum support prices (MSP), although the reforms are not intended to have any impact on MSP,” said an official, requesting anonymity .
Farmers also want an ordinance invoked by the government in October to crack down on pollution in New Delhi, the main cause of which is the burning of crop residues. The ordinance has angered farmers because it sets heavy penalties for those who pollute, including farmers who burn crop stubble, with a 1-year jail term and fines of up to Rs1 crore.
“Higher subsidies that will allow farmers to adopt environmentally friendly technologies as an alternative to burning crop residues is another option before the government,” said a second official.
Recent reforms in the antiquated agricultural sector allow companies to freely trade agricultural products outside of the so-called government-controlled mandi system, allow private traders to store large quantities of commodities for future sales, and establish new rules for contract farming. .
In the latest round of talks on December 1, which was inconclusive, the government had asked the farm unions to identify specific provisions in the three farm laws they opposed. All three ministers had ensured adequate responses to their objections at today’s meeting.
“The problem is not about one particular clause, but about the direction in which the Center is pushing agriculture in India,” Avik Saha, secretary of the Kisan Sangharsh Coordination Committee for All India, stated in a letter to the Minister of Agriculture before Thursday. talks.
Farmers fear that the reforms could pave the way for the government to stop buying commodities at the MSP set by the federal government, erode their bargaining power and leave them at the mercy of private buyers.
The government has insisted that it will continue to buy staple foods at MSP, but farmers have demanded a law that guarantees that the sale of agricultural products below MSP will not be allowed.
Indian farmers receive lower prices than international farmers for their products due to rising costs of cultivation, inadequate markets and the government’s obsession with keeping food prices low. This has worsened the terms of trade for agriculture, measured as a ratio between the prices of agricultural products and the prices of manufactured goods. The crisis, therefore, is not one of low production, but one of low prices.
Economists say that an MSP mechanism that ignores dynamics, such as global demand and prices, creates distortions in the market. If it is not profitable for traders to buy at MSP set by the federal government, when demand is low, then the private sector will simply leave the markets. In such a scenario, the government simply cannot be a monopoly buyer of all products, said Pravesh Sharma, a member of the Indian Research Council on International Economic Relations in New Delhi.
The assumption behind the new reforms is that free competition in agricultural markets will result in an offsetting market price, in which quantity supplied equals quantity demanded, resulting in equilibrium.
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