The State and the Farm Laws

This is in response to the article “Farm Laws: Conflating Deregulation with Modernisation” by M S Sriram (EPW, 13 March 2021). It aims to bring out the issues emerging out of deregulation while identifying it as an inherent process of modernisation. The author has explored in detail the dialectical relationship between the aspects of modernising agriculture and its nuances with that of market forces. In the due process, a critical analysis of the farm laws, and their implications for the farmers’ welfare have been dealt in a systematic manner. In the context of farm laws, the article finds that “the government should look at making significant and positive investments in agriculture, rather than talking about enabling laws that do not change the economics of agriculture in any way” (p 42). This is a critical observation and summarises the ramifications of the union government’s rhetoric of improving the farmers’ income through better remunerative prices.

Here, an attempt is made to highlight certain dimensions of the farm laws that are unattended by the author, yet are crucial to understand the political economy of farm laws from the neo-institutional perspective with emphasis on market entity. The economic assumptions underlying the farm acts are that the market entities boost the competitiveness among the buyers/sponsors; this, in turn, increases the demand for the agricultural produce, thereby enhancing the bargaining power of the farmers to negotiate better remunerative prices with the market and private players. The author has argued that all this can happen even without “the withdrawal of the state” (p 39) and goes a step ahead to say that “there are many ways in which the state can work the markets, and passing these three badly drafted laws is a blunt way of intervening” (p 42). The author on a word of caution has noted “blunt instruments do not cut well, but cause disproportionate harm” (p 42).